Heavy rare earths (HRE) developer Northern Minerals Ltd (ASX:NTU) has initiated discussions with commercial and Commonwealth Government financiers to explore debt financing options for the Browns Range HRE Project.
Browns Range in Western Australia has the potential to contribute significantly to the rare earths market, given the increasing global demand for these critical minerals.
Moving towards FID
Through ongoing discussions with commercial and government financiers, the company hopes to identify and implement an optimal financing structure to advance the project and move closer to a final investment decision.
It is making good progress on this front with the completion of a strategic assessment of the project by the Commonwealth Government's Northern Australia Infrastructure Facility (NAIF).
The next step following strategic assessment is the detailed due diligence phase of NAIF's assessment process.
Northern Minerals will work closely with NAIF during this phase to develop an investment proposal for consideration by the NAIF Board, though it should be noted that NAIF has not yet made a decision, and there is no guarantee that an agreement will be reached between the parties.
In addition to engaging with NAIF, Northern Minerals is also in dialogue with Export Finance Australia regarding the potential involvement of debt funding for the project's development.
The company aims to progress the formulation of an optimal financing structure for the Browns Range HRE Project alongside the completion of the definitive feasibility study (DFS).
The ultimate goal for Northern Minerals is to secure credit approvals for a preferred debt financing option, paving the way for a final investment decision (FID) in the first quarter of 2024.
Proactive approach
The company's proactive approach to exploring debt financing options demonstrates its commitment to advancing the Browns Range HRE Project and unlocking the significant potential of heavy rare earths resources.
Executive chairman Nicholas Curtis said: “We consider the preliminary support of NAIF as a significant first milestone in our financing journey for our Brown’s Range Project.
“We believe this highlights the strong progress we have made across the key elements necessary for a bankable project, being our HRE resources, our proven processing ability, and our long-term offtake arrangements, which we aim to demonstrate with the completion of our updated DFS.
“NAIF is an important supporter for the project with their proven ability to support critical minerals projects outside the mainstream commodities.”
About NAIF and Export Finance Australia
NAIF is a development financier set up by the Federal Government to support development across Northern Australia.
Since 2016 the fund has approved $4 billion of financing to infrastructure projects across the north ranging from large-scale critical minerals and energy developments to social infrastructure – including universities – to airport upgrades, agriculture, and aquaculture.
NAIF will earmark $500 million of funding to develop critical minerals projects as part of the Australian Government’s new Critical Minerals Strategy,
Export Finance Australia is Australia’s export credit agency. It supports Australia’s trade and infrastructure agenda by providing commercial finance for exporting businesses and Indo-Pacific infrastructure development.
It administers the Australian Government’s National Interest Account, which includes the Critical Minerals Facility, the Defence Export Facility and lending for the Australian Infrastructure Financing Facility for the Pacific.