Northern Minerals (ASX:NTU) has entered an underwriting agreement with a Hong Kong-based fund to raise $10 million via a share placement at $0.135 per share.
Interestingly, the placement is at a 4% premium to Friday’s (17 March 2017) closing price of $0.13.
The new capital will support Northern Minerals as it approaches the final investment decision for a pilot plant at its Browns Range project spread across Western Australia and the Northern Territory.
Through the development of Browns Range, Northern Minerals aims to be the first significant world producer of dysprosium outside of China.
The project has a number of deposits and prospects containing high value dysprosium and other heavy rare earths, hosted in xenotime mineralisation.
Northern Minerals is proposing to develop a pilot plant at Browns Range as stage 1 of a three-stage process to fully commercialise the project.
The proposed pilot plant is expected to operate at 10% of the full-scale plant for a period of three years.
Dysprosium is an essential ingredient in the production of DyNdFeB (dysprosium neodymium iron-boron) magnets used in clean energy and high technology solutions.
Northern Minerals’ share price has doubled over the past one year, last trading at $0.125.