Arafura Resources Ltd (ASX:ARU) has launched a share placement to raise A$41.5 million to accelerate the development of the Nolans Neodymium-Praseodymium (NdPr) Project in the Northern Territory, having received firm commitments from institutional and professional investors based both domestically and internationally.
The issue price of A$0.265 per share represents a 17.2% discount to the closing price of Arafura shares on August 2. About 156.7 million new shares will be issued by ARU during the placement.
The company believes the strong support garnered by the placement is a vote of confidence in Arafua’s tier one asset and vertically integrated corporate strategy, as well as the company’s potential to deliver a secure and sustainable supply of NdPr oxide into the global market for electric vehicles and renewables use.
Clear demonstration of Nolans’ importance
“The Nolans Project is the only NdPr project in Australia that plans to mine and process ore to oxide at a single site,” Arafira Resources managing director Gavin Lockyer said.
“It is pleasing that Arafura continues to receive significant interest from new and existing institutional investors, which along with our advanced discussions with a number of major global companies seeking to secure access to NdPr Oxide, clearly demonstrates the importance of Nolans to the global supply chain for critical raw materials.”
Arafura intends to use the funds to accelerate development at Nolans by:
- completing front-end engineering and commencement of detailed design; and
- beginning tendering activities for main construction contracts.
Funds raised will also be used for general working capital purposes, including ongoing marketing and sales negotiations in the US, Asia and Europe and financing activities.
Canaccord Genuity (TSX:CF, LSE:CF) (Australia) Limited and Bell Potter Securities Limited acted as joint lead managers and bookrunners to the placement.