Arafura gets more government support for Nolans NdPr project
The ball is well and truly on for Arafura to secure senior debt to develop his Nolans rare earth project after receiving a letter of support from the NAIF.
The non-binding letter from the Northern Australia Infrastructure Facility sets out the terms of a potential senior credit facility of up to $ 100 million with a term of up to 15 years and the conditions for financing to be provided. .
Importantly, it follows Australian export credit agency Export Finance Australia’s proposal for a 15-year $ 200 million senior debt facility and highlights government support for minerals. essentials such as rare earths.
Taken together, the government’s two senior debt facilities could end up with a larger bank debt facility that will allow buyers to enter into binding agreements.
Arafura Resources (ASX: ARU) Managing Director Gavin Lockyer said the company is extremely happy to receive support from the NAIF and will work with the agency to meet the conditions necessary to move the process forward.
“The Australian government’s critical minerals strategy is focused on developing critical mineral projects and downstream processing capacities in Australia to strengthen sustainable supply chains,” he explained.
“This is also aligned with global customers’ critical commodity diversification plans and their ESG priorities.
“The support from the Australian government improves our position in finalizing the senior debt binding terms with the goal of a final investment decision in the second half of 2022.”
Arafura has also applied for a grant under the government’s $ 1.3 billion Modern Manufacturing Initiative for parts of its premier engineering and design program that are directly related to the establishment of downstream processing capacities.
Nolans project
Nolans is currently the only neodymium-praseodymium (NdPr) focused rare earth project ready to go in Australia with all environmental approvals in place.
The project – located about 135 km north of Alice Springs – has an ore reserve of 29.5 million tonnes grading 2.9% rare earth oxides in total, the LoPr representing 26.4% of the rare earth content.
It will process the high quality segregated rare earth oxides nationally, ensuring that all added value is done in northern Australia.
Arafura recently updated the feasibility study for Nolans which improved the Net Present Value (NPV) and Internal Rate of Return (IRR) – two measures of a project’s profitability – by $ 968 million and $ 17 , 97% to 1.4 billion and 18.1% respectively.
Operating costs are estimated at $ 24.76 ($ 31.59) per kilogram of NdPr oxide, while earnings before interest, taxes, depreciation and amortization were estimated at $ 354 million per year based on with a lifespan of 38 years.
This article was developed in conjunction with Arafura Resources, a Stockhead advertiser at the time of publication.
This article does not constitute advice on financial products. You should consider getting independent advice before making any financial decisions.
