Northern Minerals confirms investor commitment to Browns Range
Northern Minerals (ASX: NTU) has received confirmation from the parent company of two enterprises that had committed to a subscription agreement to Browns Range equating to a $30 million staged equity investment that the second and third tranches totalling $18 million will be met, albeit later than expected.
To date the subscribers (Huatai Mining and Taizhong Energy Australia) have made payments totalling $12 million to NTU and they were due to complete a further capital injection on November 28, 2016.
In a statement made by parent company, Shandong Taizhong Energy the group confirmed that its subsidiaries remained committed to the subscription agreement and the investment in NTU, and to this end will continue to use their best endeavours to complete the second and final tranche subscriptions as soon as funding is available.
Letter of guarantee being provided by Shandong Taizhong Energy
In consideration of a letter of guarantee being provided by Shandong Taizhong Energy, NTU has agreed to the requested extension which specifies that the total payment of $18 million is due for completion on or before December 28, 2016.
Confirmation that these arrangements will be completed by year-end provides certainty for NTU as it prepares to embark on the development of the Browns Range project, with a view to becoming the first significant world producer of dysprosium outside of China.
The increased certainty surrounding funding appears to have been well received by investors with the company’s shares up 4.3% in morning trading.
However it should be remembered that this is an early stage play and share trading patterns should not be used as the basis for an investment. Those considering this stock should seek independent financial advice.