14/10/2008 - 08:54

Arafura secures $20m loan

14/10/2008 - 08:54

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Perth-based explorer Arafura Resources Ltd has accepted a $20 million loan from US-based investment fund YA Global Investments for the progression of the feasibility study into its Nolans rare earth-phosphate project.

Perth-based explorer Arafura Resources Ltd has accepted a $20 million loan from US-based investment fund YA Global Investments for the progression of the feasibility study into its Nolans rare earth-phosphate project.

 

Below is the announcement:

The Board of Arafura Resources Limited (Arafura Resources) has agreed to accept the offer of an A$20,000,000 facility with US-Based Investment Fund YA Global Investments, L.P. (YA Global).

Under the terms of the facility, Arafura Resources may, at its discretion, issue shares to YA Global at any time over the next 60 months, up to a total of A$20,000,000.

Subject to certain pricing parameters, shares issued to YA Global will be priced at the lowest daily volume weighted average price (VWAP) of Arafura Resources Limited shares traded on each of the 10 trading days which follow an advance notice by Arafura Resources. A commission of 5% is payable by Arafura Resources on each advance at the time the advance is made.

Managed by US-Based Yorkville Advisors LLC, YA Global Investments has a solid reputation in the US and UK financial markets and a rapidly growing reputation in Australia for structuring convertible loans and equity participation agreements. To date, the YA Global Group has made available in excess of over A$300,000,000 for over 20 ASX-listed companies.

The Chairman of Arafura Resources, Mr. Mick Muir, stated "The execution of this facility with YA Global ensures the continued progression of the Nolans Feasibility study and shows that even in these tough economic conditions, quality projects will attract investors."

"The Nolans Rare-Earth-Phosphate project is the company's flagship asset and must progress. It will become the world's premier Rare Earth supplier outside of China and an essential source of high quality phosphoric acid to the Australian fertilizer industry."

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