Australian mining company Iluka announces it has entered into an agreement with Northern Minerals Limited for the supply of rare earths concentrate. The agreement is for the supply of all available concentrate from Northern’s Browns Range project, until the delivery of contained rare earth oxide (REO) has reached 30.5kt.
Subject to Northern developing Browns Range, Northern’s concentrate will be a valuable additional source of feedstock for Iluka’s Eneabba rare earths refinery in Western Australia and will be a significant contributor to establishing the Eneabba refinery as a long term producer of highly valued heavy, as well as light, permanent magnet REOs.
To support Northern’s development of Browns Range, Iluka will make an initial investment of $20 million in Northern via a convertible note ($15 million) and share placement ($5 million). This will provide Northern the funding required to complete a definitive feasibility study (DFS), promoting delivery of a final investment decision (FID) on Browns Range over the next year.
In addition to the initial investment:
• Iluka has committed to provide additional equity funding towards Browns Range post FIDthrough a further placement, subject to certain conditions; and
• subject to shareholder approval, Iluka and Northern have agreed to the grant of put and call options over additional Northern shares.
This provides Iluka with a pathway up to an ultimate 19.9% shareholding in Northern.
Northern and Browns Range Northern is an ASX listed company focussed on developing its Browns Range rare earths project in the eastern Kimberley region of Western Australia. Browns Range consists of seven deposits, with a total Mineral Resource of 10.8Mt.
Northern has the potential to produce an attractive source of direct feed for Iluka’s Eneabba refinery. The rare earth bearing mineral at Browns Range is xenotime, which is characterised by high dysprosium (Dy) and terbium (Tb) assemblage of 10.0% in REO at Wolverine. Dy and Tb are the valuable ‘heavy’ permanent magnet rare earths.