PERTH (miningweekly.com) - Rare earths developer Arafura Rare Earths is looking to raise A$121-million through a share placement and share purchase plan (SPP) to accelerate the development timeline of its Nolans neodymium-praseodymium (NdPr) project, in the Northern Territory.
The company on Monday announced that it would undertake a two tranche share placement, priced at 37c a share, to raise A$121-million. The first tranche will consist of more than 259.11-million shares, raising an initial A$95.8-million under the company’s existing placement capacity.
A second tranche of more than 67.9-million shares, raising a further A$25.1-million, will be subject to shareholder approval.
Gina Rinehart’s Hancock Prospecting has acted as a cornerstone investor in the placement, and has committed to subscribe for A$60-million worth of shares across the two tranches, giving the company a near 10% interest in Arafura.
“We are extremely pleased with the number of new and significant Australian and offshore institutional investors joining our register including Hancock Prospecting, a company well experienced in large project developments,” said Arafura MD Gavin Lockyer.
“The widespread interest in this placement reflects the increasing global awareness of the importance of our NdPr oxide product within the supply chains essential to energy transition. The Nolans project is well positioned to become a ground-breaking strategic development for Australia with its single site ore to oxide business model.”
In addition to the share placement, Arafura will also undertake an SPP targeted at raising a further A$12-million. Eligible shareholders will be able to subscribe for up to A$30 000 of additional shares in the company, also at a price of 37c each.
The SPP will open on December 15 and close on December 30.
Funds raised in the share placement and SPP will be used to accelerate the development of the Nolans project, including completing early contractor involvement, placing long-lead item orders, early works and ongoing marketing and sales negotiations in the US, Asia and Europe, as well as financing activities.
“Nolans is important to all countries that are seeking diversified and robust critical material supply chains as they strive to achieve their net-zero emissions targets,” said Lockyer.
“There is growing momentum behind the Nolans project following the signing of our binding offtake with Hyundai and Kia and increasing confidence in our strong project economics as we transition into the construction phase. This funding will enable us to accelerate our development activities allowing commitment to long lead equipment and commencing on country earth works in preparation for our planned construction program in 2023.”
Arafura recently confirmed the economics of the Nolans project, with capital costs estimated at A$1.39-billion pre-production, and a A$196-million contingency, with the project expected to produce 4 440/t of NdPr oxide over a mine life of 38 years.
Operating costs have been estimated at A$61.60/kg of NdPr.