PERTH (miningweekly.com) – Rare earths developer Arafura Resources has received firm commitments for a A$40-million share placement.

The ASX-listed company on Thursday reported that it would place more than 333.3-million shares, at a price of 12c each, in two tranches.

The first tranche of more than 175.6-million shares would be placed under Arafura’s existing placement capacity, while the second tranche of more than 157.7-million shares would be subject to shareholder approval in a meeting proposed to be held in early August.

The offer price of 12c a share represented a 29.4% discount to Arafura’s last closing price, and a 29.1% discount to the company’s five-day volume weighted average share price.

In addition to the share placement, Arafura would also undertake a share purchase plan (SPP), offering shareholders the opportunity to subscribe for up to A$30 000 worth of new shares in the company, to raise an additional A$5-million.

The SPP will open on July 5 and close in August 23.

Funds raised in the share placement and the SPP will be used to start front-end engineering design activities at the Nolans rare earth project, in the Northern Territory, and to fund general working capital.

“We are delighted with the support for the placement, and welcome a number of Australian and offshore institutional investors to the register,” said Arafura MD Gavin Lockyer.

“The Nolans project is the only new shovel-ready neodymium-praseodymium oxide project in Australia capable of delivering advanced materials into the critical minerals supply chain. The company welcomes the support of new and existing shareholders and looks forward to applying their funds towards advancing the Nolans project. Nolans has the potential to diversify rare earth supply chains while seeding new industry in Australia, one of the world’s most secure jurisdictions.”

The A$1-billion Nolans project is expected to deliver 293 000 t/y of concentrate, containing 4 357 t/y neodymium-praseodymium oxide, 135 808 t/y of phosphoric acid and 13 343 t/y total rare-earth oxide equivalent over a mine life of 33 years.