Northern Minerals clears the decks to focus on Rare Earths

By Matt Birney

30/08/2016 - 15:57

Bulls N' Bears Announcements

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.

Rare Earths player Northern Minerals are aiming to be the only major producer of "Dysprosium" outside of China

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.

After inking a deal with Huatai Mining a few weeks ago worth $30m to progress their Browns Range Rare Earths project, Northern Minerals are clearing the decks of non rare earths specific ground which includes their virgin ground in the Tanami Region in the Northern Territory.

Under the deal, Northern Star will immediately pay $1.25m to Northern Minerals for the Tanami leases with another $1.5m payable by Northern Star if they discover a 1m ounce Jorc compliant inferred resource.

Importantly, Northern Minerals have retained the rare earth rights on all ground sold to Northern Star.

Northern Star also gains the gold exploration rights to Northern Minerals’ Boulder Ridge rare earth project and in a third leg of the deal, Northern Minerals have re-jigged the March 2016 acquisition of four tenements in the region from Toro Energy.

Northern Star will now acquire the tenements and carve out the rare earth rights in favour of Northern Minerals.

Northern Minerals Managing Director, George Bauk, said "Selling these tenements is a great outcome for Northern Minerals as it provides access to short-term working capital to continue the development and financing of the pilot plant, while also retaining the rare earths rights on this ground for future development."

"As a company we continue to focus on the development of our rare earth assets, in particular the dysprosium-rich Browns Range project. We are confident the rare earth market will continue to recover and grow as supplies decline and demand for technology that is cleaner, smaller and more efficient continues to increase."

Northern Minerals’ tenements covered more than 8,000 square kilometres in what has become a relatively hot exploration region. The deal to share exploration rights is a clever move that cashes in on demand by gold explorers, without detracting from Northern Minerals' rare earths objectives.

Northern Star made an aggressive move into the Tanami region last year under a joint venture with Tanami Gold. The discovery of one million ounces of inferred gold to trigger a further payment to Northern Minerals is certainly not beyond Northern Star’s capability or the potential of the Tanami region.

Northern Minerals will raise a further $27 million from share placements with Huatai before the end of the year with Huatai emerging as Northern Minerals largest shareholder at 31%.

The partners aim to establish Browns Range as the world’s first significant producer of Dysprosium outside of China, which currently accounts for more than 95% of world production.

Dysprosium is a heavy rare earth that is a critical ingredient in high-end permanent magnets used in electric vehicles, wind turbines, air conditioning compressors, fan drives and other industrial plant and equipment.