Arafura to raise A$375m and settle equity component for Nolans build
Following a positive final investment decision to proceed with the $1.6-billion Nolans rare earth project in Australia, ASX-listed Arafura Rare Earths has launched a A$350-million institutional placement at A$0.26 apiece.
The placement will be undertaken in two tranches, with the first aimed at raising A$175-milion and the second the balance.
Arafura’s largest shareholder, Hancock Prospecting, which is chaired by Australia’s richest individual Gina Rinehart, has committed to subscribe for A$85-million in the placement.
This will increase Hancock’s shareholding to 17.5% upon completion of the placement.
Arafura confirms that the proceeds of the placement, combined with A$430-million to be received in equity commitments from the German Raw Materials Fund, Export Finance Australia and Australia’s National Reconstruction Fund Corporation, and A$481-million of equity having been raised in the fourth quarter last year, ensure the company is fully funded in respect of the equity component for developing the Nolans project.
Arafura also plans to undertake a share purchase plan for eligible existing shareholders to raise up to A$25-million at the same price as the placement. Arafura expects to have a cash balance of A$911-million at the end of its fundraising activity.
The group has also secured binding offtake agreements for 93% of Nolans’ production. Nolans is poised to be Australia’s first fully integrated ore-to-oxide rare earths operation.
