Northern Minerals finds funding as Baogang deal slips

According to Mining News Pro - Northern Minerals on Monday said that the Australian government would be prohibiting a A$20-million share placement to China’s Baogang Group Investments, which would have given the State-owned entity a 13% share in Northern Minerals.

The August agreement would have resulted in Northern Minerals issuing Baogang more than 322.5-million shares.

No reason was given for the government’s decision to prohibit the share placement.

Meanwhile, Northern Minerals on Monday said that the new share placement would be undertaken over four tranches, with the first raising A$9-million, the second A$4.2-million, the third A$3.4-million and the fourth A$5.4-million.

The first tranche placement, consisting of 450-million shares, would be done under the company’s existing placement capacity, while the remaining tranches will be subject to shareholder approval.

The shares will be placed at a price of 2c each.

Northern Minerals noted that some 375-million of the shares issued would be in repayment to amounts owing for convertible notes issued in June of last year, with an aggregate face value of A$7.5-million, while the balance of the shares would be issued to raise cash for the continued development of the company’s projects and for working capital.

In addition, Northern Minerals would also undertake a share purchase plan, targeted at raising some A$5-million before costs.

Eligible shareholders can subscribe for up to A$30 000 worth of new shares in Northern Minerals, priced at 2c a share.