Budding rare earths producer Arafura Resources has successfully tapped new and existing investors for $41.5 million for the Nolans project after shares were offered at a generous discount.
Budding rare earths producer Arafura Resources has lined up a further $41.5 million in funding for the Nolans project after shares were offered at a generous discount on its last close price.
Arafura successfully tapped new and existing investors for the funds, which were put on the table at 26.5 cents each, marking a 17.2 per cent discount on Tuesday's closing price.
Brokers Canaccord Genuity and Bell Potter were joint lead managers and bookrunners to the placement, which will add a further 156.7 million shares to the company’s register once settled.
Funds will be put towards finishing front-end engineering and the start of design work for Arafura’s flagship Nolans project 135 kilometres north of Alice Springs, as well as starting the tender process for main construction contracts.
The project is set to comprise a rare earths-phosphate-uranium-thorium mine, and a beneficiation, extraction and separation plant.
The fundraising comes as Arafura works to pin down an offtake deal with South Korea-based Hyundai, under which the automotive business would buy 1,000 to 1,500 tonnes per annum of neodymium and praseodymium from the project if and when it becomes operational.
“The Nolans Project is the only NdPr project in Australia that plans to mine and process ore to oxide at a single site,” Arafura managing director Gavin Lockyer said, while indicating the project had received further inbound interest.
“It is pleasing that Arafura continues to receive significant interest from new and existing institutional investors.
“Which along with our advanced discussions with a number of major global companies seeking to secure access to NdPr Oxide, clearly demonstrates the importance of Nolans to the global supply chain for critical raw materials.”
Arafura shares were down by around 11.9 per cent to trade at 28 cents.