Here’s one rare earths explorer that could be in for a strong 2019
Mining & Resources
Special Report: Rare earths company Arafura Resources has put itself in a strong position moving into 2019 after completing a capital raising that should see it through to a final investment decision on its Nolans neodymium-praseodymium (NdPr) project in the Northern Territory.
In mid-December, Arafura announced it had raised $3 million through an oversubscribed share purchase plan to existing shareholders plus an additional $1 million through a share placement to sophisticated and professional investors in Australia and the USA.
As a result, the company ended the year with approximately $9 million in the coffers.
Managing Director Gavin Lockyer says the company is in an ‘excellent position’ and that amount should be enough to fund the remaining work on the Nolans definitive feasibility study (DFS), to secure final mining approvals, and to allow a smooth transition into project execution.
Arafura (ASX:ARU) advised at the start of December that the DFS would be delayed as it undertook additional work to further optimise operating and capital expenditure estimates.
The DFS results are now scheduled for release in early February.
After successfully completing a comprehensive program of pilot testing– from beneficiation through to rare earth processing – during 2017 and 2018, Arafura has achieved large-scale validation of its process flowsheet to recover saleable NdPr and phosphoric acid products from the Nolans orebody.
One final phase of piloting – rare earth separation – remains.
However, this phase was completed as part of a previous pilot program in 2011-12 and the company believes it has sufficient process and engineering data to take forward into plant design.
As part of the DFS, Arafura had been contemplating locating its rare earth separation plant overseas, but in early November the company announced that all processing would take place at the Nolans site, 90 minutes’ drive north of Alice Springs.
Despite there being a higher cost associated with having its entire operation in Australia, Arafura sees the trade-off being regulatory and business certainty.
Arafura anticipates securing a mining lease for the Nolans project in the first half of 2019.
This will be valid for 25 years, providing a firm foundation for long-term planning.
By contrast, rare earth producer Lynas Corporation operates under shorter-term licences in Malaysia.
In December, the Malaysian government ordered Lynas to remove an estimated 450,000 tonnes of radioactive process waste from the country by September before it would renew the company’s operating licence.