Australian heavy rare earths-focused company Northern Minerals Limited (ASX: NTU) (Northern Minerals or Company) is pleased to announce the outcomes of a Definitive Feasibility Study (DFS) for the Company's 100%-owned Browns Range Heavy Rare Earths Project (Browns Range or Project), located in the East Kimberley region of Western Australia.
Commenting on the Browns Range Definitive Feasibility Study, Northern Minerals Managing Director and CEO Shane Hartwig said: 'The completion of this Definitive Feasibility Study is a major milestone for Northern Minerals and reaffirms the strategic potential of Browns Range as a globally significant, near-term source of critical heavy rare earths.' 'The DFS outlines a commercially viable, technically robust project with significant upside potential, conditional on ongoing work programs and the strong forecast HREE prices being realised. With the Iluka offtake deal, supportive governments in Australia and overseas and key approvals received, we are well positioned to move with confidence to the next stage of Browns Range's development. ' 'Rare earth pricing structures remain opaque given the dominance of Chinese supply and until recently have yet to factor in the strategic imperative recognised and articulated by governments in the US and Europe for rare earth supply chains based outside of China. Whilst certain reported index prices for heavy rare earths like Dysprosium and Terbium remain subdued, leading industry experts are forecasting a significant supply deficit to emerge by 2028. Browns Range is one of the most advanced HREE project in the world, ideally positioning Northern Minerals to capitalise on this forecast supply deficit.' 'The current Browns Range project shape contained within the DFS is based only on the Wolverine Mineral Resource Estimate. The Company will continue to undertake ongoing exploration across the broader significant Project tenure to expand the development profile of the Project.' 'The global push to decarbonise is undeniable and irreversible, reinforcing the strategic value of projects like Browns Range to supply the raw materials that will enable the energy transition.' 'This DFS lays the foundation for bringing Browns Range into production, with our focus now shifting to securing the right funding solution to enable construction commencement in line with our schedule as Northern Minerals sets about delivering long-term, sustained value for our shareholders.'
Cautionary Statement
The Definitive Feasibility Study referred to in this announcement has been undertaken to determine the viability of Northern Minerals' Browns Range Heavy Rare Earth Project based solely on the development of the Wolverine deposit via open pit and underground mining methods (the Project). The DFS is a technical and economic assessment of the potential viability of the Project. It is based on detailed technical, economic and geopolitical assessments to a level that the Company believes is sufficient to support estimation of Ore Reserves. Northern Minerals has previously commissioned and released the 2015 Feasibility Study (Previous Study).
While geological and metallurgical observations and data from the Previous Study have been leveraged to inform the outcomes of the DFS, Northern Minerals considers the Previous Study to be superseded by the DFS. Cost, pricing and other financial assumptions applied to derive economic outcomes under the Previous Study are historical and do not apply in the current markets for commodities, or more-specifically, rare earth products. These assumptions have been revised as reported in the DFS, and Northern Minerals directs investors to rely solely on these updated assumptions with respect to any investment decision concerning the Company. The DFS is based on existing Mineral Resources and the presently reported Probable Ore Reserves defined within the Project. The Mineral Resources and Ore Reserves underpinning the estimated life of mine production under the DFS (Production Target) have been prepared by a competent person or persons and reported in accordance with the JORC 2012 Code. The Production Target comprises Measured (2%), Indicated (84%) and Inferred Mineral Resources (14%). Investors are cautioned that there is a low level of geological confidence in Inferred Mineral Resources and there is no certainty that further drilling will result in the determination of Measured or Indicated Mineral Resources, or that the Production Target will be realised. Of the Mineral Resources scheduled for extraction in this Production Target, approximately 85% is classified as Probable Ore Reserves. The proportion of Inferred Mineral Resources is not a determining factor for viability of the Project. The DFS outcomes are based on the range of material assumptions regarding modifying factors outlined in this announcement. Among these material assumptions are the Company's prospects of securing further debt and equity funding of at least A$592M. Investors should note that there is no certainty Northern Minerals will be able to raise the required amount of funding when needed and that access to such funding may be subject to conditions that may or may not be within Northern Minerals' control. It is also possible that said funding may only be available on terms that may be dilutive to or otherwise effect the value of Northern Minerals' shares. It is also possible that Northern Minerals could pursue other value realisation strategies such as a sale, partial sale or joint venture of the Project. This could materially reduce Northern Minerals' proportionate ownership of the Project. While Northern Minerals considers all the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the outcomes indicated by the DFS will be achieved. The DFS further assumes the Iluka Supply Agreement remains on foot to supply up to and beyond the total contracted quantity of 30,500 t contained TREO.
The Iluka Supply Agreement is subject to conditions precedent required to be satisfied by certain dates, some of which have passed as at the date of this Announcement, which may entitle the parties to terminate the Iluka Supply Agreement. Northern Minerals and Iluka are in discussions to facilitate satisfaction of the conditions outstanding or agree suitable extensions when appropriate to the relevant satisfaction dates. Northern Minerals has concluded it has a reasonable basis for providing the forward-looking statements included in this announcement and for holding the expectation that it will be able to complete the development of the Project.
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