Northern Minerals Ltd (ASX:NTU) made strong progress during FY21 and is well-funded to drive exploration and feasibility studies towards a full-scale commercial operation at its Browns Range Pilot Plant Project in Western Australia.
The pilot plant project is a three-year research and development project which forms part of a broader ongoing economic and technical feasibility study to be the only significant dysprosium producer outside of China.
In parallel to the feasibility study on the beneficiation plant, Northern Minerals has continued its commitment to invest in exploration across its Browns Range tenement package.
Pilot plant operations
Brown Range Pilot Plant.
After resuming from a COVID imposed break, a second hydrometallurgical plant test campaign on Wolverine xenotime concentrate began in December 2020 but was cut short due to the early onset of the wet season.
This campaign was completed in early 2021, although production through the Browns Range Pilot Plant continued and a shipment of 40,406 kilograms of rare earth carbonate (REC), containing 1,835 kilograms of dysprosium oxide and 233 kilograms of terbium oxide, is ready for sale through NTU offtake partner ThyssenKrupp Materials Trading GmbH.
Importantly, Northern Minerals completed the installation and commissioning of the ore sorting system in the June 2021 quarter.
NTU also continued to evaluate downstream separation processing options for Browns Range ore during the year.
Furthermore, the company also commenced studies into traditional solvent extraction separation and variants thereof, for separating the mixed heavy rare earth material produced at Browns Range into individual rare earth products.
Ongoing exploration
In parallel to the feasibility study on the beneficiation plant, Northern Minerals continued its commitment to invest in exploration across its Browns Range tenement package.
During the December 2020 quarter, a total of 8,500 metres of reverse circulation drilling were completed focusing mainly on Dazzler, Gambit West, Wolverine and a new prospect named Toad.
The second phase of the exploration program including an additional 12,000 metres of reverse circulation drilling, aimed at expanding the inventory of near-surface resources in the Browns Range Dome commenced in July 2021 with a 12-week campaign.
This will include a combination of follow-up holes at Banshee West and Toad prospects, drill investigation in the vicinity of the Gambit and Gambit West deposits and at the Rogue prospect, and drill testing at greenfield targets including the Ripcord, Pulse and Quicksilver prospects.
Notably, the combined results from the 2020-21 RC drilling campaigns will support the scope of the feasibility work for the commercial-scale beneficiation plant.
Project pathway to production.
Capital raising
On February 16, 2021, Northern entered into subscription agreements with various sophisticated and institutional investors in Australia, the US and Europe to raise A$20 million (before costs) in a private placement.
The company issued 408,163,267 fully paid ordinary shares to subscribers, along with 153,061,226 free attaching unlisted options with an exercise price of A$0.074 and an expiry date of three years from the date of issue as part of Tranche 1.
Tranche 2 was completed on July 27, 2021, when a further 51,020,408 unlisted options with an exercise price of A$0.074 and an expiry date of July 27, 2024, were issued.
In November 2020, the company received A$8.7 million for its 2020 financial year refundable Research and Development tax offset for its eligible R & D work as well as a further A$300,000 in relation to prior years.
Debt settlement
Following the receipt of the ATO refunds, Northern immediately reduced its debt with the early repayment of an outstanding convertible note.
The company was also able to settle all outstanding payments due to Sinosteel (A$4.5 million) for the construction of the Browns Range Pilot Plant under the EPC Contract.
In July 2020, the company issued 50 million fully paid ordinary shares to a nominee of Lind Global Macro Fund, LP as a result of A$800,000 of the face value of the replacement convertible security being converted into shares.
Following this conversion, no amounts were outstanding under the replacement convertible security.
Lind also elected to reduce the collateral shareholding number of fully paid ordinary shares of 60 million shares to zero, by paying the company A$1.08 million in cash concerning the above funding arrangement.
As a result, Northern continues to be debt-free with cash reserves moving into the 2022 financial year enabling the company to undertake the planned exploration as well as completing the required test-work.