Arafura signs MOU with Canadian entity

Arafura Rare Earths has signed a memorandum of understanding with the Canada-based Saskatchewan Research Council, as it aims to add further value to its shovel-ready Nolans project in the Northern Territory.

Gina Rinehart-backed Arafura, which has a market cap of $383.84 million, told the market on Monday its MOU with the SRC – the second largest research and tech firm of its kind in Canada – would give the rare earth elements developer an opportunity to formulate both a framework and timetable of terms relating to toll processing between Nolans and the SRC’s rare earth processing facility, located in Saskatoon, Canada.

Arafura’s samarium-europium-gadolinium and heavy rare earths will be processed into dysprosium and terbium oxide.

Last month, the Darryl Cuzzubo-led company said it plans to produce 573 tonnes of SEG and HRE each year at Nolans, of which 25 and 8 tonnes of dysprosium and terbium will be contained respectively.

While Arafura said it remains committed to neodymium-praseodymium-based offtake agreements, it believes the alliance with SRC would allow it to bring a greater range of rare earth products into the market.

“Heavy rare earths are vital for high-performance rare-earth magnets, and by collaborating, we will be geared to stay ahead of the global demand curve as the world transitions to a lower-carbon future,” Mr Cuzzubo said.

Arafura, which has been diligently pushing towards a final investment decision at Nolans later this year, announced a $20 million fully-underwritten placement on July 24 – along with a $7 million share purchase plan, which allowed for an additional $3 million in oversubscriptions.

A day earlier, the company confirmed it had received conditional approval from all commercial lenders in relation to the project’s senior debt and cost overrun facilities.

Arafura closed trade flat at 16 cents.