Name of the Project
Nolans neodymium/praseodymium rare earths project.

Location
Northern Territory, Australia.

Project Owner/s
Australian mining company Arafura Resources.

Project Description
The Nolans project will encompass a mine, a process plant – comprising beneficiation, extraction and separation plants – and related infrastructure.

An updated feasibility study has optimised the production schedule and financial outcomes of the project. The pit optimisations, mine designs, ore reserves and mining inventory are unchanged from the updated mining study in March 2020.

The project has ore reserves of 29.5-million tonnes grading 2.9% total rare-earth oxides, 13% phosphorous pentoxide and neodymium/praseodymium (NdPr) enrichment of 26.4%.

The updated feasibility study has reported a minor increase in the concentrate processing capacity of the process plant – from 330 000 t/y to 340 000 t/y. The definitive feasibility study was based on 300 000 t/y.

The beneficiation capacity has increased from one-million tonnes a year to 1.5-million tonnes later in the life-of-mine to accommodate lower run-of-mine head grades.

Minor changes to the hydrometallurgical recovery of rare earths and phosphorous pentoxide, resulting from the changes to the processing plant design, have also been reported.

The project is expected to produce 4 440 t/y of NdPr oxide over its 38-year mine life. The production of middle and heavy rare-earth oxides is estimated at 474 t/y and phosphoric acid at 144 393 t/y.

Potential Job Creation
The project will create 650 jobs at the peak of construction and new high-value export opportunities.   

Net Present Value/Internal Rate of Return
In the base case, the project has a net present value, at an 8% discount rate, of A$2.4-billion and an internal rate of return of 19.3%.

Capital Expenditure
Preproduction capital is estimated at A$1.39-billion plus A$196-million in contingency.

Planned Start/End Date
Commercial production and ramp-up is expected to start by December 2028.

Latest Developments
Arafura Rare Earths has raised about A$80-million through a two-tranche institutional placement as the company advances towards a final investment decision (FID).

The placement, priced at A$0.19 a share, will result in the issue of about 421.1-million new fully paid ordinary shares. In addition, Arafura will launch a share purchase plan (SPP) targeting A$5-million, also at A$0.19 a share. If fully subscribed, the two transactions are expected to bring in about A$85-million before costs.

MD Darryl Cuzzubbo has said the capital raising represents a milestone in the company’s funding strategy. He has said that inbound-led placement partially derisks the final equity raise while enhancing the company’s negotiating leverage. Arafura is working towards closing out discussions with a range of potential strategic equity partners and delivering on the equity funding strategy.

“Arafura has taken the opportunity to expand its register ahead of an FID, with strong demand from high-quality new and existing institutional investors. The interest is . . .  testament to the high-quality nature of the Nolans rare earth project and the significant work undertaken by the company to advance and derisk its development.” 

The majority of proceeds will go towards accelerating main construction at Nolans once a positive FID is taken.
Cuzzubbo has also pointed to favourable market dynamics: “In addition, the strong tailwinds for Western supply of rare earths, highlighted by MP Materials’ recent partnership with the US Department of Defense, gives Arafura confidence that it can finalise its equity funding package in a timely and attractive manner.”

The SPP, opening on August 27, will allow for eligible existing shareholders to participate on the same terms as institutional investors.

Proceeds from the capital raising, together with existing cash, will provide an extended cash runway and support project development capital upon FID, alongside corporate, working capital and transaction costs.

Key Contracts, Suppliers and Consultants
KBR, Wave International and Arafura’s geological, metallurgical and project personnel (updated definitive feasibility study); Mining Plus (mine planning, design and scheduling, along with mining cost estimation); Simulus (process simulation); and Infinity Corporate Finance (financial modelling).

Contact Details for Project Information
Arafura Resources, tel +61 8 6210 7666 or email arafura@arultd.com.