Name of the Project
Nolans neodymium/praseodymium rare earths project.

Location
Northern Territory, Australia.

Project Owner/s
Arafura Resources.

Project Description
A definitive feasibility study has confirmed Nolans as a globally significant and strategic neodymium/praseodymium project that, once developed, will become a major supplier of these critical raw materials to the high-performance, permanent-magnet market.

The project has ore reserves of 19.2-million tonnes at 3% total rare-earth oxides (TREO) and 13% phosphorous pentoxide.

The project will encompass a mine, a process plant and related infrastructure to be built and located at the Nolans site.

Mining will be conducted using typical drill-and-blast operations, hydraulic excavators and rear dump trucks. The strategic mining schedule is based on an average mining rate for the first seven years of 3.2-million tonnes a year, with average production for the duration of mining estimated at 7.6-million tonnes a year at a maximum rate of 11.2-million tonnes a year. Ore from the run-of-mine pad will be trucked 8.5 km to the process plant.

The beneficiation plant and associated equipment are designed to process a maximum of one-million tonnes a year of ore to cater for a variation in ore grade over the life-of-mine (LoM).

The process plant is designed for 300 000 t/y of concentrate, which relates to a nominal 13 343 t/y of TREO equivalent products, with a potential maximum of

14 100 t/y, depending on the mining schedule.

The project is expected to deliver 293 000 t/y of concentrate, producing 4 357 t/y of neodymium/praseodymium oxide,135 808 t/y of phosphorous acid and 13 343 t/y TREO over a 23-year LoM.

Potential Job Creation
The peak construction workforce is estimated at 650, with a steady-state operations workforce of 280 people.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 10% discount rate, of A$729-million and an internal rate of return of 17.43%, with an after-tax payback of five years.

Capital Expenditure
Preproduction costs have been estimated at A$1-billion.

Planned Start/End Date
Project design and construction will take 30 months to complete, with commissioning targeted for early to mid-2022.

Latest Developments
Arafura Resources is reviewing the project schedule for its Nolans project after deciding to modify the project’s execution strategy to a traditional front-end engineering design (FEED) model.

The integrated project management team has continued to work across several fronts in preparation for project delivery, including reviewing the execution strategy to incorporate feedback from potential contracting and financing partners.

This consultation, combined with the increasingly positive outlook for neodymium/praseodymium pricing and the traction being gained in offtake discussions, has given the company the confidence to modify the execution strategy, Arafura has said.

The FEED process will split the engineering and construction contracts to bring in additional contractors for both packages, resulting in a more competitive tendering process, and will reduce the risk for the construction contractors, thereby reducing contingency and risk premiums.

The advanced design, procurement and tendering at the final investment decision will also deliver a high level of cost certainty for the project, which, in turn, will improve the confidence of project financiers.

The change in contracting strategy will result in an additional six months before the final investment decision is taken and an extension of the construction schedule by two months.

Arafura has also decided to delay the production of cerium from the Nolans project, based on the current spot price and flowsheet, saying that cerium production will deliver limited value to the project.

Cerium production will start only once commissioning of the Nolans processing plant is complete and production has ramped up to full capacity.

Deferring cerium production will enable Arafura to focus on the production of on-specification neodymium/praseodymium oxide, which is a higher-value product and represents about 95% of rare earth revenue.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Arafura Resources, tel +61 8 6210 7666 or email arafura@arultd.com.