ASX BRIEFS

NORTHERN MINERALS LTD (NTU) - CEO & MD Shane Hartwig Discusses the Rare Earth Revolution in Western Australia

• Andrew Musgrave

Share episode

Send us a text

Shane Hartwig, Managing Director and CEO of Northern Minerals, reveals how the company is positioning itself at the forefront of Australia's heavy rare earth sector through its flagship Browns Range project. Located in the remote Kimberley region of Western Australia, this strategic asset represents a significant opportunity to develop an Australian-based rare earths supply chain.

The conversation navigates through Northern Minerals' evolution from uranium explorer to rare earth developer, showcasing how the company plans to produce heavy rare earth-rich concentrate for partner Iluka Resources. This strategic partnership creates a powerful alternative to Chinese-dominated supply chains, with Iluka set to process Northern Minerals' concentrate into separated rare earth oxides essential for permanent magnets used in electric vehicles, wind turbines, defense applications, and even emerging humanoid robotics.

Shane details the company's methodical approach to project development, highlighting recent exploration programs at deposits like Dazzler and Gambit while explaining how their systematic review has identified a strong pipeline of prospects to potentially expand their mineral resources. The discussion provides valuable insights into their optimization efforts around CAPEX and OPEX for the feasibility study expected to be completed by the second quarter's end – a critical milestone that will drive funding discussions with government agencies like NAIF and EFA.

Andrew Musgrave Host

00:03

Welcome to another episode of ASX Briefs, and joining me today is Shane Hartwig, the Managing Director and CEO of Northern Minerals Limited, a company that's at the forefront of Australia's heavy rare earth sector. With its flagship Browns Range project, poised become a key supplier of critical minerals for clean energy technologies, electric vehicles and defence applications. Shane, thanks for joining me today and welcome to the ASX Briefs podcast. 

Shane Hartwig Guest

00:29

Excellent Thanks, Andrew, and thanks for having us and thanks for the opportunity to be able to provide an update on Northern Minerals. 

Andrew Musgrave Host

00:34

Okay, now, just for listeners that may be unfamiliar with Northern Minerals, can you just provide a brief overview of the company? 

Shane Hartwig Guest

00:40

Certainly so. The company's been around for about 16 years. ASX listed obviously started life as looking for uranium and in the proceeds of doing so, discovered its rare earth deposit. And so, if we jump forward now, we're primarily focused on developing our Brown's Range Heavy Rare Earth Project, which is located in the Kimberley region of Western Australia. So, think about Broome, come east to Halls Creek and then just about on the Northern Territory border is where our process is and really what we're looking to do, our main strategy is we propose to build a mine and processing facilities to enable us to produce a heavy rare earth-rich concentrate which we propose to sell to our partner, ASX listed Iluka Resources for further processing by them into separated rare earth oxides. And we'll go into what those rare earth oxides specifically are. Our arrangements for the Iluka include an offtake agreement for the sale of those rare earth concentrate as well as the potential for Iluka to invest further into our business as we look to raise funding to build the project. The actual products themselves are those, ultimately those rare earth oxides that we produce the concentrate for that Iluka will then separate into these individual oxides. They're used in the ongoing electrification and decarbonisation megatrend that we're currently underway. So going into those permanent magnets that are used in things like EVs, wind turbines, defence applications and in a growing field of all things of humanoid robotics. So that's broadly the area we're playing in. 

Where we're currently at is that we're completing a feasibility study and that's going to outline the technical and commercial aspects of the project. And once we've finished that feasibility study, we'll continue our ongoing process of seeking effectively our project funding, hopefully to build and commission the proposed mine and operating facilities. Look, in addition to what we're wanting to do in relation to the actual Browns Range project itself, we have an extensive tenure position, and we have developed a robust pipeline of prospects to support ongoing resource development. So, exploration is another part of our key focus and to that end we've commenced an exploration program just recently, including having recently drilled some diamond holes at our dazzler deposit. We're awaiting for some results on that, and just over the weekend just gone we've actually kicked off another drill program at our Gambit deposit, which is nearby our existing Wolverine deposit. So that sort of gives a brief overview of the company. 

Andrew Musgrave Host

03:20

Now there's been encouraging results from your John Galt copper prospect. Could this open up diversification opportunities for Northern Minerals beyond rare earths? 

Shane Hartwig Guest

03:31

Yeah, look, I think in terms of so we're certainly we're very focused on our rare earths and that's our main strategy in terms of developing our rare earth projects. Certainly, obviously, with having a large exploration tenure, we will go out and explore that, primarily focused on our rare earths. But as we do come across and if we do come across other interesting minerals and of course you know we'll look to see the best way of furthering those and developing those, and John Galt's an example in terms of we've got some interesting results from that and so we'll look to further develop that, but certainly our focus is really on our rare earths. 

Andrew Musgrave Host

04:08

Okay, and just touching on the Dazzler project and the original target generation programs across the Browns range tenement portfolios, they're obviously gaining momentum. So, what are some of the most promising targets? 

Shane Hartwig Guest

04:20

Yeah, look in terms of as I said, we've got an extensive tenure both in WA and Northern Territory and under our head, geologist Dale Richards, we've implemented a systematic review of our portfolio and certainly that's identified a strong pipeline of prospects to support potential mineral resource expansion, which is really what we're after. So that program, in terms of the systematic review, looked at our portfolio, our existing deposits, other areas within the tenure, ran a whole lot of geophysics, new geophysics took existing geophysics, knitting a lot of that together to identify those potential targets. And when you're looking to develop a resource base, clearly a lot of the times it's those deposits that are close and proximal to where you potentially are going to mine other deposits which are the ones that we should be going after, and that's certainly what we've done there. So, as I mentioned, we've drilled our Dazzler deposit for that very reason. 

It's got a small existing resource on it, proximal to where Wolverine, which is our foundation deposit, which the one that will be the first cab off the rank, if you like, in relation to that'll be in commencement of mining once we do get into production, and certainly Gambit is another one of those. So, the team has really identified Gambit as a potential for a Wolverine sort of lookalike. It's a structural trend that hosts defined mineralisation, again analogous to the type and style of our foundation at Wolverine. The primary mineralisation at Gambit is complex, requires resolution. So, we're going in and we're undertaking this drill program and the review of the existing drilling data identified opportunities to test the extension to that mineralisation at Gambit and basically increase the understanding of that structure. So, as I said, we kicked off that exploration over the weekend and we look forward to reporting the results of these once the drilling is completed, assays are submitted, and we've got those results back and we understand what they are. 

Andrew Musgrave Host

06:22

Okay, and what are the expected CAPEX and OPEX implications for the updated contracting strategy and feasibility work? 

Shane Hartwig Guest

06:27

Okay, Look, we've been going through all CAPEX and OPEX in terms of, and we've had a real process of looking to optimise those. Everything from contracting strategy in terms of who we're using, going out and getting updated market pricing from the market to make sure that for our feasibility study we do have up-to-date pricing, we get a real understanding of what that looks like, and there has been some improvements obviously across the board, we think, in terms of some of that optimisation work, and clearly other things have also moved on from a cost inflation perspective as well, and so really we'll finalise that work, put that together in our CapEx and OpEx section of our feasibility study and expect to release some of that. 

As an example, though, some of the work that we have looked to do is on an Earthworks package, for instance looked at the size and the scale of the Earthworks package as originally designed and, as part of the optimisation, reviewed that and to better understand do we need that size and scale? Is there optimisation opportunities there? That's an example of an optimisation that we may do, or we have done as a result of putting this feasibility study together. 

Andrew Musgrave Host

07:40

And from a strategic position, with the growing demand for rare earths in electric vehicles and renewable energy, how does Northern Minerals position itself as a non-Chinese supplier of heavy rare earths? 

Shane Hartwig Guest

07:51

Yeah, well, look, the market may or may not know. I think most of the market realises now that certainly China dominates the rare earth market. It's got around 60% to 70% of the resource development and then up to sort of upwards of 90% in the downstream processing of those, ultimately those permanent magnets that go into EVs et cetera. So, it's a supply chain dominated by China and certainly we, along with Iluka, are looking to become an integral part of that supply of that heavy rare earth elements and outside of that existing dominated supply that is, as I say, currently controlled by China. So how will we do that? Well, we're subject to funding and subject to getting our project up and running. We'll look to. 

We've entered into our long-term supply agreement with Iluka and under this we provide them the concentrate. They then separate our concentrate, crack and separate our concentrate into those oxides and look to make those oxides available into the domestic and international market and particularly those, from our perspective, those heavy rare earth oxides. And that's all being processed at the Eneabba refinery, which obviously helps to provide an alternate supply chain outside of that current dominating Chinese supply chain. And we feed into that. And I must say, Andrew, that in terms of the mix of our rare earth oxides, our heavies, and combined with a Ilukas lights, will be in the right proportions to feed into the process for the making of these high-performance permanent magnets, again feeding into the ongoing electrification that's going on around the world at the moment. So really looking to be part of that non-China supply chain. 

Andrew Musgrave Host

09:34

And just touching on the financials, you've successfully had a capital raise recently, so how will these funds be allocated to advance Brown's range? 

Shane Hartwig Guest

09:41

Yeah, so look in terms of look. First of all, we were very pleased to get that capital raising away in a difficult capital market for, you know, for small cap exploration and development companies and also particularly given the challenges facing the current pricing environment for rare earths. The funds themselves were being applied to finishing this feasibility study. So, there's costs involved in that, both internal and external, from consultants and expert engineers and other costs associated with that. Clearly, we're undertaking exploration programs which we're looking for resource development, so part of the funds will be applied to those exploration programs to hopefully develop that resource base. 

We've got existing operations, and we have ongoing obligations in relation to keeping our assets in good standing. The company built a large-scale pilot plant up at site, whilst it's in care and maintenance. That does have ongoing care and maintenance costs associated with it. We've got a camp, we've got infrastructure. All of those things cost money and so part of those funds will be applied towards that, and other costs will be also applied to other consultancy costs associated with seeking project funding. So really, feasibility study, look to get further project funding and keep assets in good standing. 

Andrew Musgrave Host

10:58

Okay, and just to wrap things up, what are some of the key milestones and catalysts that investors should keep an eye out for over the next 12 to 18 months? 

Shane Hartwig Guest

11:06

Look, certainly in the next 12 months it's the completion of that feasibility study. We're expected to have that completed by the end of the second quarter of the financial year. So that'll be a key milestone for the company and we will look to then take that feasibility study and continue the funding journey in relation to seek funding for the project itself. That'll involve both a component of debt and equity. We're in discussions with government agencies, including NAIF and EFA, about potentially providing that debt. Again, the next milestone for engagement with those agencies particularly is provision of that feasibility study itself. 

We've done a lot in relation to getting ready for diligence, for instance from a technical perspective. We've engaged the services of SRK Engineering to undertake an independent technical, technical review of the project and that review really is for the purposes of prospective providers of funding. So, finalise the feasibility study, then go into the next stage discussions in relation to project funding, getting through diligence, and that's both from a debt and equity perspective. Other milestones clearly will be relating to our exploration itself. Again, we've got some results coming from Dazzler so they're sitting in the assay labs at the moment. So, we're waiting for those to come back and clearly exploration's kicked off at Gambit and as we do, more exploration, clearly that will obviously be further milestones for the company as well. 

Andrew Musgrave Host

12:40

Okay, Shane. Well, there's plenty going on, which is great to see, and we look forward to further updates in the upcoming months. 

Shane Hartwig Guest

12:46

Excellent and thanks again for your time and thanks for the interest in Northern Minerals. 

Andrew Musgrave Host

12:51

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.