Northern Minerals garners further $1m from placement – Stock rallies by 10.64%

Northern Minerals Limited (ASX: NTU) operates as a mineral exploration company. The company focuses on the development of heavy rare earth projects like the element dysprosium, in Western Australia and the Northern Territory.

On 7 March 2019, the company has disclosed to the market, that Conglin Yu, ACIIG and Yanchun Wang’s substantial interests, in the form of voting powers, have changed from the 18.50% to 14.43% effective 6 March 2019.

Also, it was notified today that, Liu Xiaohua’s voting powers in the company has increased, from the earlier held 5.16% to 6.54% effective 6 March 2019.

The company had recently, stated that it had discovered a High-Grade First Ever Mineral Resource at their dazzler deposit.

The company, on 7 March 2019, also disclosed that it has received a further $1 million concerning the subscription agreement with Liu Xiaohua, as announced on 1 March 2019. The remaining $1 million is due shortly.

The full placement is for 60,000,000 fully paid ordinary shares in the Company at an issue price of A$0.05 per share, to raise A$3 Mn.

The shares will be issued to Liu Xiaohua, out of the shareholder approval, from the General Meeting held on 26 February in resolution 11. These funds derived from the issue of the shares, would be deployed for ongoing working capital purposes.

The company registered a net loss of $18.5 million, in its Annual Report ended 30 June 2018. This loss was posted, due to the significant increase in activities for the period, concerning the development of the pilot plant at Browns Range, and the conclusion of the mining campaign.

Mining expenditure came in at $6.9 million. Mining expenditure was incurred to have an inventory of ore, for future processing, over the three-year pilot plant project. There was a further,$0.6 million in exploration costs in the period. This also included costs incurred in the commissioning phase, of the project towards the end of the financial year. A higher Research and Development rebate impacted revenue in the year, due to the increased expenditure on eligible research, and development activity.

Cash used for investing activities rose due to the pilot plant development costs incurred in the year – primarily payments concerning the construction of the beneficiation and hydrometallurgical plant. Cash flows from financing activities were $26.9 million from share issues and placements net of transaction costs incurred. There was another $1.4 million advanced as part of the, Lind Financing facility during the year net of repayments made. The $17.9 million was drawdown from the R & D Loan facility, with Innovated Structured Finance LLC (ISF). The Company’s cash reserves at the end of 2018, totalled $10.4 million compared to $8.4 million as of 30 June 2017.

For the FY 2018, the plant and equipment costs increased by $47.2million due to the development of the pilot plant. The $31.6 million of these costs related to the design work, fabrication, installation and the EPC management of the beneficiation and hydrometallurgical plant. A further, $1.7 million related to bulk earthworks including the ROM pad and site drainage. The amount of $4.0 million was spent on plant infrastructure. The main components of the infrastructure costs were, the purchases of power stations and its installations.

On the price-performance front, the stock has posted the YTD return of -14.55%. The company has posted returns of -43.37%, -26.56% & -4.08% over the past six months, three & one-month period respectively. The stock of the company closed at a price of $0.052, up 10.638% during the day’s trade, with a market capitalisation of ~$ 62.78 Mn.

The stock opened the day at A$0.050, reached the day’s high of A$0.053 and touched the day’s low of $ 0.049, with an average daily volume of ~ 7,472,687. It had a 52-weeks high price of A$0.120 and a 52-weeks low price of A$0.040, with an average volume of 1,468,057 approximately.


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