A day after revealing it had secured a significant portion of the funding needed for its Nolans rare earth mine in the Northern Territory, Arafura (ASX:ARU) shares went into a trading halt as the company began a stock market-based raising.
Arafura Rare Earths asked the ASX on Wednesday to halt trading in its shares until Friday to allow it to complete a placement.
The halt came a day after the company achieved several milestones in the funding for its Nolans project, including a billion-dollar package.
The company stated it had received conditional credit approvals for its $US775 million ($A1.1 billion) senior debt facility from commercial lenders and export credit agencies, including the Commonwealth Bank, ING, Export Finance Australia, and their counterparts in South Korea and Germany.
The debt package totals more than $US1 billion ($A1.5 billion), including project completion support provided by an $US80 million ($A120 million) cost overrun facility and a subordinated standby liquidity facility of $US200 million ($A301 million).
“Today, I am proud to announce the completion of Arafura’s debt funding strategy,” Arafura managing director and chief executive officer Darryl Cuzzubbo said in Tuesday’s statement.
“Securing conditional approval for more than $US1 billion of debt funding and completion support is an incredible result and one that reinforces the value of Nolans in diversifying a global NdPr supply chain.”
He stated that the company will further investigate the potential to increase the processing capacity at Nolans by up to an additional 150%.
Once the equity funding is complete, the next step is a final investment decision for Nolans later this year.
Arafura shares were halted at 19 cents, which valued the company at nearly $439 million. As a result, the placement and equity raising could be highly dilutive for current shareholders if they do not take up any entitlements.
If approved, Nolans will join Lynas’ Mount Weld mine, Northern Minerals’ Browns Range operation in WA, and Iluka’s $1.5 billion processing operation at Eneabba. There are other prospects in NSW at Dubbo, in Victoria’s Mallee, and in the southwest of WA.
