Chinese engineering firm Sinosteel MECC have agreed to defer $12m of the $60m needed to build Northern Minerals rare earths pilot plant until after the mine starts producing. Taking the money from future cashflow rather than borrowing it, dramatically changes the deal metrics and sets the company up to be Australia's first heavy rare earths producer in 2017.
In the public company world it's often said that it's easier to get a promise of a cheque from the Chinese than the actual cheque itself, which sometimes never arrives. No such problem however for the George Bauk led Northern Minerals who now look set to create the first significant heavy rare earths mine outside of China after their Chinese shareholder showed them the colour of their money.
The Browns Range heavy rare earths project got a shot in the arm this week courtesy of a $1.76m federal Government R&D cheque with a $9m cheque from Chinese investors just days away. Investors are also starting to give the company credit for its trailblazing resources play, with the share price nearly tripling in recent months.
The FIRB has cleared a $30m Chinese investment in Northern Minerals, clearing the way for the rapid development of the company's heavy rare earths project at Browns Range in WA. Northern Minerals have already banked $3m and will bank another $9m from Huatai Mining next week with two more $9m payments to follow.
Northern Minerals has won a key approval from the W.A state Government for the development of Australia's first heavy rare earths mine at Browns Range in the far north. The DMP cleared the project management plan for a Dysprosium pilot plant after Chinese interests recently committed $30 million in equity funding for Northern Minerals to help progress the project.
When it rains it pours or so it seems for Rare Earths player Northern Minerals who banked $2.8m from Chinese interests a few weeks ago with another $27m to come. This week the George Bauk led company banked another $1.25m from the sale of their Northern Territory gold leases to Northern Star Resources with another $1.5m potentially still to come.
