Northern Minerals Share Price Remains Steady after ATO Incentive

After positive news from the Australian Taxation Office, shares of Northern Minerals Ltd [ASX:NTU] managed to trade 0.3 cents higher upon the opening of today’s market.

At time of writing, the company’s shares have reverted back to yesterday’s price of 4.6 cents.

The ATO has agreed to issue 50% of NTU’s claim for research and development between the 2017/18 tax year, in its partial release today.

This will give Northern Minerals a refundable tax offset of $10.78 million to help with its finances. Shareholders will have to wait for the rest of the review for more information.

Earlier in the month, NTU also received $3 million in funds as part of its subscription of agreement with Liu Xiaohua, which was announced on 1 February.

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Northern Minerals share price and the prospects for HRE sources outside of China

NTU is an exploration company involved in the development of rare earth metals, with a focus on becoming the first significant producer of dysprosium outside of China.

Dysprosium is the chemical element found in various minerals such as xenotime. It’s also a key ingredient in making NdDyFeB (neodymium dysprosium iron-boron) magnets, which are used in clean energy as well as technology solutions.

Northern Minerals has three projects: the Browns Range and John Galt projects in Western Australia and the Boulder Ridge project in the Northern Territory.

NTU’s Browns Range project is set to become an important source of high value dysprosium. The company also has a strategy to extend the project’s resource life through HRE pathway prospects, by developing mineral resources.

China currently makes up approximately 99% of the world’s HRE production.

Northern Minerals’ 2019 outlook

As production and demand of HRE is continuing to increase, Northern Minerals is receiving positive signs from the market, as well as from possible offtake partners.

HRE’s offtake agreement with the Sumitomo Corporation of Japan was secured in 2012, but they are still seeking further offtake partners after the revision of its new business strategy for its pilot plant stage.

Northern Minerals looms as an intriguing investment, given the growing adoption of electric vehicles. As production ramps up, it is possible that the outlook for the company could improve.


Ryan Clarkson-Ledward,
For Markets & Money

PS: Ten Aussie Mining Stocks You Should Buy First Thing Tomorrow

Ryan Clarkson-Ledward is an Editor at Money Morning.

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