Proactiveinvestors United Kingdom Arafura Resources Ltd Proactiveinvestors United Kingdom Arafura Resources Ltd RSS feed en Sun, 26 May 2019 12:53:47 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) <![CDATA[News - Arafura Resources Ltd lowers rare earth costs at Nolans ]]> Arafura Resources Ltd (ASX:ARU) has been able to effect a reduction in projected operating costs in an independent engineering analysis of the Nolans Rare Earth Project in the Northern Territory.

Operating costs have been reduced to A$12.36 per kilogram of total rare earth oxides from the previous A$14.51 per kilogram.

The savings were identified from work in three key areas:
- Resizing of equipment identified in capital review studies;
- Process efficiencies resulting in less reagents; and
- Lower required work force.

These reduced operating costs help the project remain entrenched in the lowest quartile of the cost curve.

Further cost improvements will assist the company to advance and finance the project.

The Nolans project contains the elements neodymium and praseodymium, which have been resilient to recent price falls in rare earths due to their use in magnets.

These magnets are driving further efficiencies in hybrid and electric vehicles, wind turbines and electronic devices.

Arafura recorded a strong cash balance of $13.5 million at the end of March.

The company expects to lodge its Environmental Impact Statement with the Northern Territory Environment Protection Authority during the June quarter.


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Thu, 19 May 2016 12:00:00 +0100
<![CDATA[News - Arafura Resources receives $3.4M tax rebate ]]> Arafura Resources (ASX:ARU) has received a tax rebate of A$3.4 million under the Federal Government’s Research and Development Tax Incentive Scheme.

This was in relation to development of its 100%-owned Nolans Rare Earths Project in the Northern Territory.

Earlier this month, it reduced operating costs at the project to US$11.22 per kilogram of rare earth oxides making its magnet-feed rare earths production cost among world’s lowest.

Capital costs are estimated at A$1,437 million inclusive of a 15% contingency.

The capital and operating cost estimates are based on a production target of 20,000 tonnes per annum of REO equivalent from Measured and Indicated Mineral Resources at Nolans Bore.

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Tue, 09 Jun 2015 14:00:00 +0100
<![CDATA[News - Arafura Resources banks $4.1M ]]> Arafura Resources (ASX: ARU) has received a $4.1 million tax refund for eligible research and development expenditure in relation to its Nolans Rare Earths Project in the Northern Territory.

The company has reduced operating costs by $4.88 per kilogram of rare earth oxides to $15.67/kg and capital costs by $504 million to $1,408 million.

This was based on a study completed by Lycopodium Minerals from data from the rare earth separation testwork completed at ANSTO in 2012.

Rare Earth Separation Plant capital and operating cost estimates have been completed while flowsheet optimisation programs are underway.


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Thu, 22 May 2014 14:30:00 +0100
<![CDATA[News - Arafura Resources teams with China’s Shenghe Resources to develop NT rare earths project ]]> Arafura Resources (ASX: ARU) has executed a key Memorandum of Understanding with Chinese rare earths producer Shenghe Resources Holding (SHA: 600392) to jointly develop the Nolans Rare Earths Project in the Northern Territory.

Securing Shanghai Stock Exchange-listed Shenghe, a 8.25 billion yuan (A$1.46 billion) industry leader in rare earths production and technology development, as a partner is a coup for Arafura, giving it a leg up towards financing and commercialising the project.

The deal with Shenghe will also provide momentum towards reducing capital and operating costs at the project.

Shenghe operates a rare earths processing plant in Leshan City and markets specialty products to international and Chinese based customers.

Under the agreement, the two companies will work together to achieve the following objectives:   
-    Shenghe to conduct scheduled reviews of the Nolans Project Definitive Feasibility Study which is being prepared by Arafura;
-    Upon successful completion of the definitive feasibility by Arafura, Shenghe will be provided with the opportunity to co‐fund the development of the Nolans Project;
-    Arafura and Shenghe to examine opportunities for the sale and distribution of rare earth products to Shenghe’s existing customers;
-    Arafura and Shenghe to continue to look for opportunities and initiatives to add to and build the strategic partnership to develop an international rare earths business; and
-    Negotiate a Framework Agreement to formalise the arrangements for the establishment of a long term strategic partnership.

Nolans has an Ore Reserve of 24 million tonnes at 2.8% rare earth oxides, 12% P2O5 and 0.02% uranium, enough to support a 22 year mine life.


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Tue, 10 Sep 2013 10:40:00 +0100
<![CDATA[News - Arafura Resources drilling Northern Territory rare earths target ]]> Arafura Resources (ASX: ARU) has started drilling of an extensive rare earths target that trends for at least 1.8 kilometres in a northerly direction about 500 metres northeast of its Nolans Bore deposit in the Northern Territory.

The 24 hole reverse circulation drilling program totalling 1,500 metres is designed to test for shallow mineralisation on EL 28473, close to where wide intervals of rare earths mineralisation were identified in reverse circulation drilling during 2011.

Notable results then included 28 metres at 2.6% rare earth oxides, 2.6% P2O5 and 0.36 pounds per tonne U3O8 from 92 metres and 23 metres at 1.8T REO, 2.7% P2O5 and 0.19 pounds per tonne U3O8 from 39 metres.

Field work has demonstrated that these drill intercepts occur at the southern end of an extensive coincident airborne geophysical-biogeochemical anomaly, which trends for at least 1.8 kilometres in a northerly direction.

The current drilling program is expected to be completed within the next three weeks.

Arafura's Nolans rare earth project is located in the Northern Territory of Australia, and recently announced that it is targeting capital cost reductions of between A$500 million and A$1 billion at the project - which could have the potential to help the company attract suitable finance.

The Technical Review and Optimisation Program with Chinese rare earths experts is also well underway. Initial beneficiation tests and results have been encouraging.


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Mon, 26 Aug 2013 15:00:00 +0100
<![CDATA[News - Arafura Resources appoints new managing director ]]> Rare earth company Arafura Resources (ASX: ARU) has made a change at the top with Gavin Lockyer the new chief executive officer and managing director, replacing Chris Tonkin.

Lockyer joined Arafura in June 2006 as its company secretary and chief financial officer, and brings a finance and operational resources background - along with a sound understanding of the rare earths industry and its participants.

Lockyer played a key role in establishing the company’s longstanding relationship with its major shareholder and strategic partner, East China Mineral Exploration and Development Bureau (ECE).

Arafura's Nolans rare earth project is located in the Northern Territory of Australia, and recently announced that it is targeting capital cost reductions of between A$500 million and A$1 billion at the project - which could have the potential to help the company attract suitable finance.

The company had $36.3 million in cash at the end of March 2013.


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Thu, 18 Jul 2013 08:20:00 +0100
<![CDATA[News - Arafura Resources terminates purchase agreement for Whyalla site in South Australia ]]> Arafura Resources (ASX: ARU) has terminated its land purchase agreement for the Whyalla site in South Australia after comprehensive investigative work confirmed it is no longer required.

This is part of the company’s goal of achieving $400 million in capital savings by relocating intermediate chemical processing for its the Nolans Rare Earths Project closer to the mine site in the Northern Territory.

Arafura added that this may also potentially include locating rare earths separation alongside established infrastructure at a suitable chemical precinct.

It is examining a number of potential sites for rare earths separation as part of a global site assessment study.

Nolans Bore has an Ore Reserve of 24 million tonnes at 2.8% rare earths oxide, enough to support a 22 year mine life.

In addition, an Inferred Resource of 21Mt is available for potential future conversion to Ore Reserves.

This is amendable to open cut mining and milling while requiring just standard beneficiation techniques.


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Fri, 21 Jun 2013 13:20:00 +0100
<![CDATA[News - Arafura Resources adds Lanthanum oxide to its rare earths oxide product portfolio ]]> Arafura Resources (ASX:ARU) has added to its rare earths product portfolio by successfully producing a separated Lanthanum oxide, which now takes its rare earths oxide offering to five.

The products are from the Nolans Bore resource in 2012 and include ceium oxide, Nd/Pr oxide, didymium oxide, SEG Oxide such as "mids" rare earth oxide (Sm, Eh, Gd) and heavy rare earths oxide including Tb, Dy, Ho, Er, Tm and Yb.

All products have been produced at pilot scale and demonstrate a further stage of Arafura's development within the Nolans project.

Arafura has been producing separated rare earth oxide products to key customers for evaluation and such testing have been done by Japan, Korea and Europe.

Rare earths are essential to products with significant growth potential in the electronics and clean technology industries. They are fundamental to products such as turbine generators, efficient lighting, automotive catalytic convertor and strategic components in defense equipment.

Arafura's Lanthanum product is targeting the nickel metal hydride batteries market which powers electric and hybrid vehicles and fluid cracking catalysts used for processing crude oil.


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Thu, 24 Jan 2013 17:00:00 +0000
<![CDATA[News - Arafura Resources defines 24 million tonne rare earth Reserve at Nolans ]]> Arafura Resources (ASX: ARU) has released a maiden Ore Reserve of 24 million tonnes at 2.8% REO for 672,000 tonnes of contained REO at its wholly-owned Nolans Rare Earths Project.

The Northern Territory project also holds just under 3 million tonnes of phosphorus (P2O5) and 4,900 tonnes of U3O8.

The Ore Reserve represents that part of the Nolans Bore Mineral Resource that can be economically mined by open pit methods.

Based on a maximum beneficiation throughput of 1.1 million tonnes per annum, this supports a mine life of 22 years.

The Ore Reserve is based on Measured and Indicated Mineral Resources estimated for the Nolans Bore deposit by AMC Consultants earlier this year.

With the Ore Reserve and the recent cash inflow of $32.5 million, Arafura is now well placed to bring the Nolans project to commercialisation.

Further upgrades to the Reserve could come from the 21 million tonnes of Inferred Resource that could be converted with further drilling to improve the confidence in these resources.

Large parts of the resource remain open at depth.

Arafura held cash of $44.5 million as of 30 November 2012.


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Tue, 11 Dec 2012 13:10:00 +0000
<![CDATA[News - Arafura Resources clarifies Nolans Rare Earth Project expenditure for 2012 ]]> Arafura Resources (ASX: ARU) has confirmed that it requires an additional $70 million in 2012 to complete the Bankable Feasibility Study (BFS) at the Nolans Rare Earth Project.

The company has issued a clarification with regard to funding in 2012 following an incorrect media report that stated $250 million would be spent during 2012.

In a Global Investor Update issued on Decmber 6, 2011, Arafura stated that upon completion of the Nolans BFS the company will have spent a total of $250 million on the project since work began in 2000.

The additional $70 million required in 2012 will, together with existing funds, be used to complete the BFS.

Results from Arafura’s 2011 drilling campaign and rare earths production demonstration program at Nolans are expected in the coming weeks.

The Nolans BFS is targeted for completion by the end of 2012, with construction due to begin in 2013/14.

Arafura’s Nolans project, located in the Northern Territory, is considered to be one of the world's largest undeveloped rare earths projects.

Fri, 13 Jan 2012 15:40:00 +0000
<![CDATA[News - Arafura Resources upbeat on Nolans rare earths 14% price spike to near $100 per kg ]]> Arafura Resources (ASX: ARU) has reported that one kilogram of Nolans rare earths mix has increased in value to US$98.86, representing a 14% increase since February 21.

The new prices for rare earths quoted by Metal Pages equate to about $2768 per tonne of in situ ore.

Prices continue to move higher on China's announcement on further reductions in rare earth export quotas in allocations for the first half of 2011.

Prices of all rare earths have increased in response to the new quotas, in particular cerium, neodymium and praseodymium oxides.

On February 14 Arafura said it will undertake a major drilling program at  Nolans to upgrade resources as part of the Nolans Bore Bankable Feasibility Study.

The company is well positioned for project financing later this year and will shortly be in talks with potential customers in Korea, Japan, Europe and North America.

Thu, 24 Feb 2011 10:45:00 +0000
<![CDATA[News - Arafura Resources benefits as Rare Earths prices rise - again ]]> Rare earth prices are on the rise again based on the Nolans Rare Earths mix average, benefitting Arafura Resources (ASX: ARU). 

The latest price is US$75.23/kg based on current Metal Pages China FOB prices for rare earths oxides.

This is up from $70.52 at the end of December 2010 due to the decrease in Chinese export quotas for first half 2011 and increased demand for cerium and lanthanum. 

Arafura's Nolans' project is one of the most advanced rare earths projects available to end users.  

The company would receive over US$1.5 billion each year from Rare Earths sales alone at current prices.

Rare Earth prices are already 50% greater than the upside case Arafura used in its business update modelling issued in October 2010 and supplies will remain tight even when new projects are factored in.

Arafura is looking to secure finance for the Nolans Project by the end of 2011, and commence production in the second half of 2013.

In early January, Arafura produced a commercial quality of separated cerium oxide and a commercial quality of neodymium/praseodymium oxide at Nolans.

Rare Earths are critical to high tech industries including electric vehicles, rechargeable batteries, energy efficient lights and iPods, and there are limited alternate sources.

China currently supplies approximately 95% of the world’s needs for these strategic metals.

As rare earths constitute only a small portion of the cost of finished products, the impact of higher prices on the final article is not significant.

However, more price rises are thought likely if China continues to restrict exports in the interests of preserving resources for domestic manufacturing.

Fri, 14 Jan 2011 16:06:00 +0000
<![CDATA[News - Arafura Resources set to benefit as rare earth prices continue to rise ]]> The Nolans Rare Earths mix average valuation is currently standing at US$70.12/kg, based on China FOB prices, proving a major boost for the Arafura Resources (ASX: ARU) Nolan's Project as the price represents a 412% increase over the past year.

Steve Ward, managing director and CEO, said "The era of low priced rare earths is behind us as their intrinsic value in end applications is better understood, their strategic importance is increasingly recognised and supplies remain tight well into the future."

As recently as October, Arafura published an update on Nolans which used US$51/kg as a basis for economic modelling, which the company said provided very positive results.

Ward added, "Already, prices have risen well above this upside case.

"This is very positive news for the company as we move quickly to first production in 2013."

The Nolans Project comprises operations at two sites within Australia, the Nolans Bore Mine in the Northern Territory and the Whyalla Rare Earths Complex in South Australia.

Annual production of 20,000 tonnes of rare earth oxides from the Whyalla Rare Earths Complex, equivalent to about 10% of the world’s supply, is on schedule to commence in 2013.


Fri, 03 Dec 2010 11:34:00 +0000
<![CDATA[News - Arafura Resources bullish about progress at its Nolans rare earths Project ]]> A progressing bankable feasibility study on the Nolans project has seen Arafura Resources (ASX: ARU) claim that, based on earlier assessments, it will have improved performances including rare earths recovery in the chemical process, greater phosphoric acid recovery, a decreased use of reagents, and improved product quality for fertiliser-grade phosphoric acid it would produce.

Arafura's managing director, Alistair Stephens, said rare earths recovery in the chemical process has now been defined at 86% (previously it was 80%) and phosphoric acid recovery would be 85% for a technical grade product (previously 80%).

He said rare earths recovery would reduce concentrate feed for an output of 20,000 tonnes per annum and this would result in lower operating costs.

Stephens said phosphoric acid from Nolans would be a high quality, low impurity, technical grade product that sells at a substantial premium to fertiliser grade phosphoric acid.

At completion of the pilot plant, optimised recoveries for rare earths and phosphoric acid from the bankable feasibility show recoveries would remain unchanged for the mine-site heavy media concentration stage.

These improved recoveries result in an average recovery from mine resources to saleable product of:

- Rare earth carbonate 77.5%;

- Phosphoric acid - technical grade 76.5%;

- Uranium (U3O8) 72%

Stephens said improved rare earths recovery and phosphoric acid recovery would result in increased volumes of high-quality product that would sell for more than $US1,000 per tonne compared to fertilizer-grade phosphoric acid at $US400/t.

Arafura has been operating in the Northern Territory for the past 20 years and listed on the ASX in 2003, with Nolans as its prime project.

The deposit has a current resource of 30.3 million tonnes, containing 848,000t of rare earth oxides, 3.9 million tonnes of phosphate, and 13.3 M lb of uranium - considered enough for a 30-year mine life.

Arafura developed a processing flow sheet, and has demonstrated the recovery of rare earths, phosphoric acid and uranium at a pre-production scale pilot plant located at ANSTO (Australian Nuclear Science and Technology Organisation) in Sydney.

Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment.

Tue, 25 Aug 2009 11:38:00 +0100
<![CDATA[News - Arafura Resources is well placed as China tightens rare earths global supplies ]]> Australian junior miner Arafura Resources (ASX:ARU), which is developing the Nolans phosphate hosted rare earths deposit in the country's Northern Territory, is making great play of a draft report submitted by China's Central Ministry of Industry and Information Technology calling for a significant tightening of China's rare earths export market.

Currently China dominates, producing about 95% (some put it at 98%) of global supply, and any tightening could have a dramatic effect on industries which use rare earth elements which are incorporated into many modern technological devices, including superconductors, high-flux magnets, electronic polishers, refining catalysts and hybrid car components.

With a huge increase in hybrid car production likely in the years ahead, control of the rare earths market may be vital to global advances in this type of technology.

Arafura says that the Chinese draft report, entitled Rare Earths Industry development Plan 2009‐2015, has been submitted to the China State Council for review and implementation in 2010, and outlines plans to restrict Chinese administration of rare earth quotas, totally banning the export of some rare earths and consolidating a large number of Chinese rare earth facilities.

Arafura's managing director, Alistair Stephens, believes the imposition of these dramatic controls is a reflection of the vital strategic nature of rare earths, a reflection of China's domination in the rare earths industry at present, and recognition that China's resource supply, while large, does not meet internal demand growth particularly in the medium term.

Rare earths are vital materials in energy efficiency and environmental pollutant reduction schemes. They are a key material for the hybrid car and electric vehicle industry and essential for energy efficient lights, plasma and LCD televisions, efficient wind turbines, and automobile catalytic converters, said Mr Stephens.

If China is to make inroads on its environmental standards and reduce pollution levels, then rare earths play a pivotal role. This is a signal that China's rare earths are for its own development, and that current recoverable reserves may not meet their own needs.  The centralisation and strict regulation on rare earths production and industry consolidation will also concentrate the market structure, placing more power on price structures with fewer agents, said Mr Stephens.

The report indicates that China's current 35,000 tonnes per annum export quota for rare earths (REO) will reduce over the next six years, though no quantification of the degree of reduction is provided.

The report outlines plans to impose a total ban on the export of some rare earths materials. These include Dysprosium (Dy), Terbium (Tb) and Yttrium (Yt). Dysprosium is a critical material used in the enhancement of magnets in the electric systems of hybrid and electric vehicles.

The report suggests China should shut down 80 rare earth separation and metal smelting facilities reducing the number of participants from 100 to just 20, to consolidate the industry and improve efficiency. Each of these 20 remaining separation and metal producers would have to produce at least 8,000 tonnes a year REO to maintain a license to operate.

There are relatively few major rare earths projects under way around the world which makes Arafura's Nolans project, which could be on stream by 2012, particularly well placed to take advantage of any tightening of Chinese supplies.

Arafura reckons Nolans is enriched in high value rare earths and has a 40% revenue advantage compared with Chinese hard‐rock resources. It is being designed to produce 20,000 tonnes per year of rare earth oxides at a recovery rate of at least 80% and an expected mine life of 30 years. The project will also produce 160,000 tonne per year of technical grade phosphoric acid and a small by‐product of uranium (150 tonnes), another competitive advantage to any other rare earths project.

Other major deposits include Mountain Pass in the U.S. which is being rehabilitated by Molycorp Minerals (effectively a new privately owned company formed by Resource Capital Funds, Pegasus Partners IV, LP, The Goldman Sachs Group, Inc., Traxys North America LLC and Carint Group LLC which acquired the property, and the Molycorp name, from Chevron Mining late last year.) 

Molycorp has begun preparations for renewed mining at Mountain Pass which is located about 50 miles from Las Vegas in California's Mojave Desert. The company, which is currently producing approximately four million pounds of Rare Earth products per year, announced earlier this year that it was restarting production at Mountain Pass with plans to ramp up annual production to 40 million pounds of Rare Earth products over a three-year period.

In Canada, Great Western Minerals Group (GWMG) - (TSXV:GMG) - has the big, high grade Hoidas Lake rare earths phosphate hosted deposit 50 miles north of Uranium City, as well as  a number of other Canadian rare earths plays and also the Steenkampskraal former rare earths mine in South Africa which is being rehabilitated.

Rare earth metals are also associated with some uranium ores and recently Japan's Sumitomo entered a deal with Kazatomprom, the Kazakh state uranium miner and nuclear company, to set up a refinery to extract rare earths.

China has been fighting hard to maintain its virtual rare earths global production monopoly, but its moves to cut back exports - also seen recently in a reduction in its quotas to supply Japanese consumers to an amount barely sufficient for demand from Toyota and Honda alone - is seeing a return to new, or rehabilitated, developments as seen above. 

But, with such supply dominance, China can also control the price and there are fears that to maintain its position China could always release sufficient to the markets at a low enough price to make some of these new developments economically unattractive.  Depending on which way China moves the rare earths sector, which is facing rapidly growing demand, could become one of the hottest ones in mining for an increasingly strategic commodity.

These new regulations mean that Arafura's 100%‐owned Nolans Project is placed perfectly to meet the increasing global demands of rare earths which are vital for new technology that help deliver energy efficient and pollution reduction schemes.

Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment.

Wed, 19 Aug 2009 13:07:00 +0100
<![CDATA[News - Arafura Resources: Developing a rare earths project in the Northern Territory ]]> News from Perth-based speciality metals explorer and developer Arafura Resources has been flowing thick and fast in recent months.

·    Last November the company announced a 63% increase in the resource at its flagship rare earths-phosphate-uranium project at Nolans Bore in the Northern Territory.

·    In February it signed a letter of intent with a Chinese partner, JEC, (Jiangsu Eastern China Non Ferrous Metals Investment Holding Co.Ltd) for the provision of technical and financial assistance in return for up to 25% of the equity in Arafura.  This investment, if all goes ahead, should be sufficient for Arafura to complete the Bankable Feasibility Study on Nolans later this year.

·    In March the company announced that it had developed a process at its pilot plant which will successfully produce a mixed rare earths carbonate, premium quality fertiliser grade phosphoric acid, and uranium. The carbonate meets all the statutory requirements to enable it to be transported and processed anywhere in the world so the company now has a marketable product.

·    In April Arafura signed a letter of intent with ECE (East China Exploration), the parent company of JEC, to further evaluate its Jervois iron-vanadium project in the Northern Territory, while at the end of May the company was able to announce that the Australian Foreign Investment Review Board had approved the Chinese investment.

Throughout it all the company has been able to ride the crest of a wave of information about the increasing importance of rare earths in new and green technologies and concerns about the Chinese dominance of supply.  Arafura’s share price has reacted positively to the newsflow, rising from a low of 22 cents last October to 67 cents today.


Arafura was originally formed as a greenfields exploration company.  At the time that it listed on the ASX in 2003 it had exploration rights to several gold, base metal and/or rare earths projects in the Northern Territory, with a combined area of 12,000 square kilometres. It now owns has interests in five projects in the Territory and its focus has shifted increasingly towards the rare earths. The company’s principal aims are now to develop the Nolans deposit by 2013, to identify additional resources there, and to discover and identify other rare earth projects.  It intends to develop its non-REE projects as joint ventures.

Nolans Bore

Nolans Bore was first discovered in 1994 by PNC Exploration, then rediscovered 5 years later by Arafura.  It lies some 135km north north west of Alice Springs just 10km from the Stuart Highway, 5km from a gas pipeline and 60km from the Darwin/Port Pirie/Adelaide railway.  The mineralisation is hosted over an area of about 150 hectares and is exposed at the surface.  The latest resource upgrade, dated November 2008, which was based on drilling to a depth of 130metres, shows a total resource which is open at depth of 30.3 million tonnes, at a grade of 2.8% rare earth oxide (REO), 12.9% phosphorus pentoxide  (P2O5) and 0.44 lbs/tonne of uranium oxide (U3O8). This is equivalent to a world-class in situ resource of 848,000 tonnes of rare earths, 3.9 million tonnes of phosphorus pentoxide and 13.3 million pounds of uranium oxide.

The rare earth oxides at Nolans are considered advantageous as although the 15 rare earth elements always occur together they do so in varying proportions.  A recent analysis by Arafura has shown that Nolans has a favourable mix with a relatively high proportion of the higher value metals especially europium, which is used in plasma screens and energy efficient lighting, and neodymium, used in high strength magnets.  The Nolans resource is suitable for an open pit with a mine life of at least 30 years and there is scope to build on the resource base as the deposit remains open at depth. 

Arafura completed a Pre-Feasibility Study (PFS) on Nolans towards the end of 2007 then commenced a demonstration pilot plant program in Sydney at the Australian Nuclear Science and Technology Organisation (ANSTO) facility, beginning with a bulk sample of 200 tonnes.  It has been successful in developing a process flow-sheet which will allow an on-site plant to use heavy media separation and flotation to increase the concentration of REO from 3.1% to 6%+ and decrease waste by 35%.  This can then be trucked and transported by rail to a process plant where phosphoric acid, uranium and a rare earth carbonate can be produced, each at an 80% recovery rate.  The plant has also been successful in reducing acid consumption cutting annual cost estimates by A$50m since the PFS.
The company have recently updated several financial analyses based on the updated resource and recent price assumptions. Capital costs for the project are estimated to be A$600m.

Meanwhile the NPV in Arafura’s ‘conservative’ case, which assumes February 2009 prices for all commodities and peak costs from 2008, is A$1.6bn after tax and capital payback at a 10% discount rate 

Under these price assumptions rare earths would account for about 60-65% of total revenue, phosphoric acid just under 20%, calcium chloride a further 13% and uranium 5%.

Arafura could have a significant competitive advantage over other rare earth projects, as in addition to the bias towards higher value rare earths it also benefits from significant by-products which are projected to generate revenues of over A$100m per year and will help to reduce Arafura’s exposure to rare earth price volatility.   Moreover the medium to long term prospects for each of the commodities in the Nolans may be favourable.

Demand for the rare earths has been growing rapidly in recent years as the number of uses for these metals seems to be increasing exponentially, particularly in new and green technologies such as hybrid cars, electronics, energy efficient lighting,  superalloys, cell phones, high strength magnets and plasma screens (see Arafura’s website for more details). Supply on the other hand has been constrained.  Although the rare earths are about as abundant as copper and zinc in the earth’s crust they are rarely found in viable concentrations so there are only a limited number of mines. China currently accounts for about 95% of global production and 60% of consumption.  Moreover China is tightening its grip, imposing more stringent export quotas.   Supply is likely to increase in future as new mines outside China come onstream, but with demand growth continuing apace prices are likely to remain robust.

Phosphates enjoyed strong price growth in Australia, at least until the middle of 2008, on the back of rising demand for fertilisers, domestic supply constraints and the lack of availability of imports.  While prices fell in line with many other commodities towards the end of the year they now show some signs of recovery and are expected to recover further long term as demand resumes.   At present Australia imports around 500,000 tonnes of phosphoric acid per year, so Nolans will have geographical advantage.

Meanwhile calcium chloride, which has the ability to draw in moisture, resist evaporation and release heat in a chemical reaction, is used in a number of industries and applications including road construction and maintenance (especially de-icing and dust control), oil field drilling and agriculture.  Demand from China is likely to grow as the road network increases.

Arafura has several options to market its uranium product.  Annual production should be enough to supply two small reactors so Arafura could either look to supply a utility directly or if could partner an established producer which would provide Arafura with direct access to an existing supply chain and the benefits of leveraging the partner’s reputation.

Other projects

In total Arafura now holds exploration rights over 4,800km2 of land in Northern Territory with another 550 km2 under application.  These interests include:

·    Aileron-Reynolds Range: Arafura’s cornerstone land package, which includes Nolans Bore, where the focus is on exploration for apatite-hosted rare earths, similar to Nolans.
·    Jervois: where Arafura recently signed a letter of intent with East China Exploration (ECE) whereby ECE will sole fund A$8m in exploration in return for 51% interest in the project.  Work to date by Arafura has focused on iron-vanadium, but there is potential for base metal discoveries.

·    Mt Porter: where Arafura obtained environmental approval for open-cut mining in 2007 from the Australian Government;

·    Hammer Hill: a nickel and copper exploration project in a JV with Mithril Resources and BHP Billiton in which Arafura’s partners can earn up to 70%.

·    Frances Creek: in a JV with Territory Resources where Arafura holds the gold rights.

Arafura’s Future Plans

Discussions with the region’s traditional owners at Nolans and the Central Land Council are continuing and Arafura believes that it is close to having an agreement that is amenable to both parties. Meanwhile design review work on the processing plant, currently being undertaken by Bateman should be complete by September.  After this Arafura will be able to finalise the optimal site selection for the plant and then complete the Bankable Feasibility Study in 2010 while working in parallel on marketing negotiations, further metallurgical work, the environmental studies and project financing.  Financing will be key, particularly in view of the current difficulties in access to debt and the size of capital requirement relative to Arafura’s current market capitalisation. 

However CEO Alistair Stephens believes that the financial climate should be easier by the time that Arafura needs to raise significant amounts of capital and that JEC are a very strategic partner.  Collaborative marketing arrangements will also be key in view of the unusual product mix with three primary products; rare earths, phosphates and uranium.  The product mix, which ultimately will be very beneficial for Arafura’s revenues, has meant that development may have taken longer than for a more standard mine.  Nonetheless, if all goes well with the BFS and other studies, then the eighteen month construction period is likely to begin in the latter half of 2011 so Arafura could be in production by early 2013.  

Meanwhile the company is also is discussions about divesting its gold projects to another group, it is seeking a final agreement with ECE about the Jervois project and it is actively looking for other rare earth projects.

Arafura held A$5.4m in cash at the end of March 2009.

Thu, 30 Jul 2009 16:25:00 +0100
<![CDATA[News - Arafura Resources to gain Chinese investment to progress Nolans Project, NT ]]> In a huge plus for Arafura Resources Ltd shareholders (ASX: ARU), Jiangsu Eastern China Non-Ferrous Metals Investment Holding Company Limited has received approval from the Australian Government to buy up to 25% of Arafura.  The price has still to be determined and is subject to ARU shareholder approval.

The deal is important as potentially Arafura looks to have gained a financial backer for development of the multi-commodity (rare earths, phosphate and uranium) Nolans Project in the Northern Territory which could yield strong returns.

JEC is an associated entity of the East China Exploration & Mineral Development Bureau (ECE) which is a major mineral exploration, development and mining group based in Nanjing in the Jiangsu Province of China.

ECE has discovered more than 160 ore deposits in China with a potential value in excess of $10 billion. Major discoveries include Meishan iron ore, Qixiashan lead-zinc, Fujian Meishan zinc-lead, Yunnan Boka gold-copper and Anhui Matou copper-molybdenum.

Alistair Stephens Arafura Managing Director said the capital injection will ensure Arafura has the funding to progress the engineering feasibility study for the Nolans project. The Nolans rare earths-phosphate-uranium project has a current resource of 30.3 million tonnes, containing 848,000 tonnes of rare earth oxides, 3.9 million tonnes of phosphate, and 13.3 million pounds of uranium. The Nolans deposit could have a mine life of over 20 years.

Arafura and JEC have also agreed to co-operate on joint ventures and in additional funding for exploration on all of Arafura Resources’ existing exploration licences.

Fri, 29 May 2009 08:05:00 +0100
<![CDATA[News - Arafura Resources snags A$24m funding deal with East China Exploration for rare earths project ]]> Arafura Resources (ASX:ARU) has this week confirmed that the Chinese company East China Exploration (ECE) will invest A$24 million to acquire a 25% interest in Arafura.

ECE is a major mineral exploration, development and mining group based in the Jiangsu Province of China.

ECE will acquire 60 million shares at prices up to 40 cents per share by way of two placements.

The details of ECE’s commitment were confirmed at ECE’s Headquarters in Nanjing, China this week in meetings with Arafura’s Chairman, Ian Laurance and Managing Director, Alistair Stephens.

The company met with senior ECE executives. and said that the ECE placements would be subject to approval by Arafura shareholders at an EGM that would be held as soon as possible. The ECE involvement would also require FIRB approval and both companies were proceeding with this application.

“ECE, with a history of 54 years, is a major mineral exploration, development and mining group based in the Jiangsu Province of China and they are interested in assisting Arafura to develop the Nolan’s rare earths-phosphate and uranium project in Northern Territory”, Mr. Laurance said.

“The ECE capital injection will ensure that Arafura has the cash to progress our feasibility work for the Nolans project this year. ECE will then assist us in project financing for mining and processing for the Nolans project.”

Mr. Laurance said that following the meetings in Nanjing this week, a delegation of senior ECE Executives will travel to Australia in April to visit the Nolan’s site in central Australia and to meet with the Northern Territory Minister for Mines, Hon Kon Vatskalis and the Federal Minister for Resources, Hon Martin Ferguson.

Managing Director Mr. Stephens said that in addition to assisting the funding of the Nolans project, ECE would enter into a series of relevant Joint Ventures to explore Arafura’s other tenements in the Northern Territory.

“ECE has had great success in exploration across China and in many other countries and they are keen to bring their expertise to assist Arafura in developing further opportunities.” Mr. Stephens said.

Arafura’s primary focus is the development of the Nolans rare earths-phosphate-uranium project. The deposit has a current resource of 30.3 million tonnes, containing 848,000 tonnes of rare earth oxides, 3.9 million tonnes of phosphate, and 13.3 million pounds of uranium (ASX: ARU 11/11/08). The Nolans deposit is capable of sustaining a mine life well in excess of 20 years.

Thu, 12 Mar 2009 11:32:00 +0000