Arafura Rare Earths Limited (ASX: ARU) has received firm commitments from Australian and international institutional, sophisticated and professional investors to raise approximately A$121 million.
The placement of fully paid ordinary shares will be staged over two tranches at an issue price of A$0.37 per share.
The company is also offering Shares under a share purchase plan (SPP) to existing eligible shareholders to raise a further approximately A$12 million at the same price.
Hancock Prospecting Pty Ltd acted as cornerstone investor in the Placement, committing to invest $60m across two tranches, which will result in a post-completion interest of ~10% in Arafura.
Funds raised are intended to be used for the following activities with a view to accelerate the Nolans Project development schedule:
▪ completion of an early contractor involvement (ECI) phase to optimise the Nolans Project and agree a contract for the construction of the hydrometallurgical plant;
▪ placement of orders for long lead or near critical path items;
▪ commencement of fabrication in readiness for main plant construction;
▪ commencement of early works construction, including for the accommodation village, project water supply, earthworks and other associated items;
▪ continuation of detailed design and tender activities to advance the design and procurement of the Nolans Project across all areas; and
▪ ongoing marketing and sales negotiations in the US, Asia and Europe and financing activities.
Funds raised will also be used for general working capital purposes.
“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,” Managing Director, Gavin Lockyer, 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. The Nolans Project is well positioned to become a ground-breaking strategic development for Australia with its single site ore to oxide business model.
“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.
“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.
For further information please visit: https://www.arultd.com/
