Hancock Prospecting will take up a 10 per cent stake in Arafura Rare Earths via the ASX lister’s latest capital raising and another show of diversity for the Rinehart investment wheelhouse.
Hancock Prospecting will take up a 10 per cent stake in Arafura Rare Earths via the ASX lister’s latest capital raising and another show of diversity for the Rinehart investment wheelhouse.
Arafura tapped institutional, sophisticated and professional investors for $121 million in the Bell Potter, Canaccord Genuity-led placement, which had shares on offer at 37 cents each.
The offer price represented a 15.9 per cent discount on Arafura’s last close.
Hancock Prospecting was a cornerstone investor in the raising, subscribing for $60 million worth of shares in the placement and buying the company a 10 per cent interest in Arafura.
The new capital will bankroll a suite of activities at the project, including pinning down a design for a hydrometallurgical plant, early construction works, orders for long lead items and ongoing marketing and sales negotiations.
A further $12 million is expected via a share purchase plan, taking the potential total raised to $133 million.
Managing director Gavin Lockyer said there had been widespread interest in the placement.
“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,” he said.
“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.”
Hancock’s investment comes as the company fronts a bidding war to claim a stake in the Perth Basin via the attempted takeover of Warrego Energy.
Today’s investment also ties in with the group’s $500 million portfolio dedicated to ‘future metals’ per its latest financials.
The capital raising comes just over a month after Arafura released a new study for the Nolans project which revealed higher costs but increased revenue for the project.
Upfront capital costs for the operation grew from $1.05 billion to $1.59 billion, set to comprise a rare earths-phosphate-uranium-thorium mine, and a beneficiation, extraction and separation plant.
Arafura raised $41 million for the project back in August and secured a $U510 million debt raise with Societe Generale and NAB back in April.
Arafura has already received a pledge of $200 million from Export Finance Australia and $100 million from the Northern Australia Infrastructure Facility.
A further $30 million was chipped in by the federal government through its Modern Manufacturing Initiative.