PERTH (miningweekly.com) – ASX-listed Arafura Resources on Friday announced plans to raise A$41.5-million to progress the development of its Nolans rare earths project, in the Northern Territory.
The company has received firm commitments from institutional and professional investors, and will issue 156.7-million shares at a price of 26.5c each. The placement price represents a discount of 17.2% to Arafura’s last closing price.
The company will also issue one free attaching option for every two new shares subscribed for, with 78.4-million options to be issued, at an exercise price of 34c each and an expiry date of 18 months from issue.
Arafura told shareholders that the placement was strongly supported by new and existing investors from around the globe and reflected significant interest in the company’s tier 1 asset and vertically integrated corporate strategy, as well as the company’s potential to deliver a secure and sustainable supply of potential neodymium praseodymium (NdPr) oxide into the global market for electric vehicles and renewables use.
Funds raised in the placement will be used to accelerate the development of the Nolans project through the completion of front-end engineering and the start of detailed design, and the start of tender activities for the main construction contracts.
Funds raised will also be used for general working capital purposes, including ongoing marketing and sales negotiations in the US, Asia and Europe and financing activities.
“The Nolans project is the only NdPr project in Australia that plans to mine and process ore to oxide at a single site. It is pleasing that Arafura continues to receive significant interest from new and existing institutional investors, which along with our advanced discussions with a number of major global companies seeking to secure access to NdPr oxide, clearly demonstrates the importance of Nolans to the global supply chain for critical raw materials,” Arafura MD Gavin Lockyer said.
An updated feasibility study estimated that over a mine life of 38 years, the A$90.8-million project would produce 4 440 t/y of NdPr oxide and 474 t/y of heavy rare earth oxide, as well as 144 393 t/y of phosphoric acid.
