Northern Minerals completes first tranche in $22 million placement

Northern Minerals Ltd (ASX:NTU) has completed the first tranche of its $22 million placement, issuing 450 million fully paid ordinary shares with a total value of $9 million. The company has received a total of $6 million in cash from the issue of 300 million of these shares. Subscription funds of $3 million for the remaining 150 million shares were paid directly to Yuzhen Ma on behalf of the company by one of the investors. This was in partial repayment of the amounts owing on the convertible notes issued on June 26, 2019, with an aggregate face value of $7.5 million as part of a subscription agreement announced on April 23, 2019. The remaining amounts owing on the $7.5 million convertible notes will be paid through the issue of 225 million shares to Yuzhen Ma (or her nominee) under tranches two, three and four of the placement - subject to shareholder approval. The placement is comprised of four tranches: Funds raised Around 375 million of these shares will be issued to repay all amounts owing in respect of and redemption of the convertible notes issued on June 26, 2019, with an aggregate face value of $7.5 million. The remaining proceeds will be used for continuing development of the company’s projects and operation of its business; for expenditure relating to care and maintenance of the Browns Range Pilot Plant; and for general working capital purposes. The company’s indicative debt position as at April 20, 2020, excluding any accrued but unpaid interest and assuming the repayment and redemption of the $7.5 million convertible notes, is around $24.3 million. Share purchase plan The company recently launched a share purchase plan to raise up to $5 million from shareholders. The offer price for the new shares is 2 cents each - the same issue price as the placement.