Special Report: Arafura has increased both economic ore reserves and mine life for its wholly-owned Nolans neodymium-praseodymium (NdPr) project in the Northern Territory.
One would be forgiven for thinking that Arafura Resources (ASX:ARU) already has enough reasons to believe that it is on track towards becoming a globally significant rare earths producer.
After all, its Nolans project hosts a significant endowment of NdPr, which is in strong demand for the manufacture of permanent magnets that are essential for electric motors, has enjoyed recent significant drilling results and landed an in-principle agreement for native title approval.
The company, however, appears to be a strong believer in stacking the deck even further in its favour and has now upgraded the ore reserve estimate for Nolans by 54 per cent to 29.5 million tonnes grading 2.9 per cent total rare earth oxides (TREO).
NdPr continues to make up a sector-leading 26.4 per cent of the total rare earths content of the ore.
The increased ore reserve also supports a 10-year increase in mine life over the 23-year base case in the project’s definitive feasibility study (DFS).
To top it off, minor changes to the design of the process plant means that the mining inventory production schedule now supports the output of about 4,325 tonnes of NdPr oxide over 39 years at an operating cost of less than $US24 ($37) per kg of NdPr oxide.
This trims a little fat off the previous estimate of $US25.94 per kg, which already ranked Arafura one of the lowest among its peers.
“The reduction in operating costs cements Arafura as one of the lowest-cost NdPr producers in the world,” managing director Gavin Lockyer said.
“The increase in ore reserves and mining inventory attests to the long-term potential of the Nolans project and when read in conjunction with the recently announced deep drilling results, reinforces its standing as a world class NdPr development opportunity.”
Arafura is continuing project development, product offtake and financing activities for the Nolans project.
These include finalising execution readiness and pre-front-end engineering and design, tendering the hydrometallurgical plant design and construction contract and escalating its engagement with potential NdPr offtake partners in Japan, Europe, South Korea, the US and China.
Additionally, the company is in discussions with the Australian government’s Critical Minerals Facilitation Office, Northern Australia Infrastructure Facility and Export Finance Australia, and with export credit agencies in jurisdictions where it is targeting product offtake or capital equipment procurement opportunities.