The company is expected to utilise the funding to begin engineering and design works for the rare earths project
FID on the rare earths project is expected to be reached in H2 2022. (Credit: Gerd Altmann from Pixabay.)
Australian mineral exploration company Arafura Resources is reportedly set to raise A$40m ($30m) funding for the development of its Nolans rare earths project in central Australia.
The capital raising is planned to take place in two tranches, in exchange for the shares priced at A$0.12 each, Reuters reported, citing a a term sheet obtained by it.
Arafura’s majority shareholder ECE Nolas Investment is not expected participate in the placement, which is being conducted by Petra Capital.
Arafura intends to use the funding to begin engineering and design works, along with general working capital requirements for the Nolans project.
The company is expected to reach a final investment decision for the rare earths project in the second half of next year, with first production expected in 2024.
Arafura is advancing discussions with nine potential customers for supply of 120% of the planned production from the Nolans project, said the Reuters report.
The project is supported by Australia’s Northern Australian Infrastructure Fund with potential senior debt funding of up to AUD100m ($75.6m) and Export Finance Australia with an additional AUD200m ($151.2m).
The company has signed a memorandum of understanding (MoU) with JingCi Material Science for the supply of Neodymium-Praseodymium (NdPr) oxide from the Nolans project, in October 2018.
Located at the Nolans site, 135km north of Alice Springs in Australia’s Northern Territory, the project will include construction of a mine, process plant and related infrastructure.
The Nolans Bore rare earths-phosphate-uranium-thorium (REE-P-U-Th) deposit is the main asset of the project.
In May, Arafura announced the completion of the feasibility study update for its 100%-owned Nolans project. The study confirmed Nolans’ ultra-low operating costs of $24.76/kg NdPr oxide.