Northern Minerals negotiates important EPC contract

By Trevor Hoey. Published at Dec 19, 2016, in Small Caps

Emerging heavy rare earths play, Northern Minerals (ASX:NTU) has followed up the Memorandum of Understanding announced on November 23 with the negotiation of an engineering, procurement and construction (EPC) contract with Sinosteel Equipment and Engineering (MECC) for the delivery of the Browns Range pilot plant.

NTU is an early stage exploration company and investors considering this stock should seek independent financial advice.

By way of background, NTU is focused on the delivery of heavy rare earth (HRE) element dysprosium as it moves to develop a large landholding in Western Australia and the Northern Territory that is highly prospective for this element.

Through the development of its Browns Range project, NTU is to be the first significant world producer of dysprosium outside of China. Dysprosium is an essential ingredient in the production of dysprosium neodymium iron-boron magnets used in clean energy and high technology solutions.

Contract terms provide financial flexibility

With regard to the contract negotiation, NTU’s Managing Director, George Bauk said, “The execution of the EPC contract is an important step with regards to securing financing for the Browns Range pilot plant and we are committed and focused towards the FID in mid-Q1 2017.

Under the contract, Sinosteel MECC has agreed to defer payments representing 20% of the contract value for a period of 24 months. Alternatively, Sinosteel MECC has the right within nine months of practical completion to convert the deferred payment amount into ordinary Northern Minerals shares at a conversion price of the lower of 15 cents per share or the 20 day value weighted average price prior to election.

Potential investors should note that the EPC contract is subject to finance and the final investment decision (FID) by the NTU Board which is expected in the first quarter of 2017.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Thanks for subscribing!