Following the launch of their Pilot Plant in July, making Northern Minerals the only heavy rare earth producer in Australia, the company has received an unsolicited offer to purchase 17.2% of the Company for $25 million.
The bid, from NRE Industrial Group Limited, equates to a premium of $0.104 cents per share, above the average 30-day close price average of $0.08 – a 30% premium, highlighting the significant value identified in Northern Minerals’ potential.
The $25 million subscription, to be completed by 31 December 2018 pending shareholder approval, will provide Northern Minerals with a cash boost to advance their Browns Range Project where new high grade discoveries from earlier in the year have identified an opportunity to expand the mine life beyond 20 years.
With the Pilot Plant now producing rare earth carbonates, Northern Minerals last week announced positive results from ore sorting studies with tests suggesting that implementation could double the Plant’s production output. Application of this technology, at an estimated capital cost of $4 million, is planned to be installed in Q2 2019.
Beyond the subscription bid from NRE, Northern Minerals also announced a $2 million subscription from a private sophisticated wholesale investor at $0.09 per share.
Within the group of heavy rare earths being targeted at Browns Range, is the element Dysprosium which is a key ingredient to the magnets used in electric vehicles, as well as within robotics and wind turbines.
Last month, Northern Minerals became the only non-Chinese producer of dysprosium which put the company on the radar of international operators. This unsolicited bid highlights the value of Northern Minerals on the global scale as the world gets closer to widespread electric vehicle adoption.
By 2025, up to 75 million electric vehicles are expected to be produced and each one is going to require 100g of dysprosium which is one of the reasons why big investors are circling Northern Minerals.
Northern Minerals trades under the ASX code: ‘NTU’.