PERTH (miningweekly.com) - ASX-listed Arafura Resources would look to shareholders to raise some A$12-million in order to fund its ongoing work programmes, including environmental studies, mine planning and process flow sheet refinements for the Nolans rare earths project, in the Northern Territory.
Eligible shareholders would be allowed to subscribe for up to A$15 000 worth of Arafura shares, capped at A$12-million. The offer price of the share purchase plan would be a 10% discount to the five-day volume-weighted average price of Arafura shares on March 9.
Following the share purchase plan, Arafura would offer its largest shareholder the opportunity to subscribe for shares at the same price as the share purchase plan to maintain its existing shareholding of 17.5%, subject to regulatory and shareholder approval.
Meanwhile, Arafura noted that it was continuing its work to obtain new funding to complete the development of the Nolans rare earths project, and in addition to the share purchase plan, the company was meeting with potential strategic investors over the coming weeks.
The miner has previously warned that the bankable feasibility study (BFS) on the Nolans project would be delayed until at least the third quarter of 2013, after the company reduced the work rate on the project, until additional capital could be secured.
Subject to the availability of funding, Arafura still had to complete a number of critical work streams, including the delivery of an updated resource mode, beneficiation test work, a rare earths demonstration plant, laboratory work for the simplification of the phosphate circuit and the production of a solid phosphate project, as well as a rare-earth oxide separation of cerium and lanthanum.
The Nolans project hosts an estimated 850 000 t of rare-earth oxides, 3.9-million tons of phosphate pentoxide and a further 13.3-million pounds of uranium. It was initially slated to start production in 2013, however, this was delayed as the company completed an expanded BFS.