A Chinese company will take a 17 per cent stake in Northern Minerals as part of a $27 million capital raising to develop its Browns Range rare earth project in the eastern Kimberley.
Specialist rare earth separation company Northern Rare Earth SYL High-tech has subscribed for $25 million shares under a deal struck with Northern Minerals.
The miner also said a private sophisticated investor had subscribed for $2 million shares.
It said the funds would be used to progress development of the heavy rare earth pilot plant, accelerate “enhancement initiatives”, exploration at Browns Range and working capital.
“With Browns Range now in the commissioning phase and commencing the production of mixed rare earth carbonates, we are investigating ways of enhancing the project to deliver better outcomes for our shareholders,” Northern Minerals managing director George Bauk said.
Mr Bauk said the NRE would help Northern Minerals to penetrate the Chinese market through its extensive knowledge and network.
The $25 million subscription is comprised of four tranches, with the final payment on December 31. The largest tranches are priced at 10¢ and 11¢ a share.
The Browns Range project is the world’s first producer of dysprosium outside China, an essential ingredient in the growing electric vehicle sector.
Northern Minerals’ shares closed up 0.6¢, or 7.7 per cent, to 8.4¢.