Arafura secure support for Nolan’s

30 March 2023 12:30

International interest in Arafura Rare Earths’ flagship Nolan’s Bore Project continues to grow, with the Company receiving a non-binding letter of in-principle support from German export credit agency Euler Hermes Aktiengesellschaft for an untied loan guarantee of up to US$600 million to support the rare earth element Project.

Nolans has quickly emerged as a major player in Australia’s growing critical metals industry, being the country’s first vertically integrated rare earth project, with a mine and processing facility on a single site and holding a JORC resource estimate of 56 million tonnes of rare earth oxides at an average grade of 2.6 per cent.

The guarantee is conditional on Arafura entering offtake agreements with German-based companies to supply neodymium praseodymium products from Nolans to be processed into permanent magnets or powertrains, with a final guarantee amount being based on offtake volume processed in Germany, final offtake structures and NdPr market conditions at the time.

On top of being another feather in Nolan’s cap, the investment also indicates continued international interest in Australian rare earths, with companies and countries around the globe scrambling to secure supply for the elements pivotal to their zero-emission ambitions, with market research giant Prescient indicating the rare earth market is set to hit over 15 billion dollars US by 2030.

In this sense, Nolan’s and Arafura have become guiding lights for smaller players in Australia’s rare earth industry, with this investment and a previous offtake supply deal with automotive giants Kia and Hyundai demonstrating that there is an international opportunity for REE explorers without Lynas and Iluka’s multibillion-dollar market caps.

The investment must be particularly exciting for First Development Resources, who set up shop just 70 kilometres away with its Selta Project an intended anagram of the electric vehicle front-runner looking to secure direct supply. Early exploration at Selta has shown that underlying geology could be comparable with Nolan’s mineralisation that is hosted within the types of granite prevalent across Selta.

This continued interest has also seen new entrants to the REE market, with Castillo Copper stepping up to the table with its Broken Hill Project returning grades up to up to 2410ppm TREO after a “Game Changing” discovery at the project’s Iron Blow prospect.

And interest isn’t just coming from international investors, with some international explorers staking claims and looking to unearth the lucky country’s rare earth bounty.

London-listed Cobra Resources have been turning heads with a unique Gold/REE double resource at its Suidinna Project, with the Company adding a massive 20.9 Mt at 658 ppm TREO maiden MRE for clay-hosted REEs to the South Australian project 211-thousand-ounce gold resource estimate in January.

The Company said alongside the international investment, it also had the in-principle support project finance tranche from the Northern Australia Infrastructure Facility increased from A$100 million to A$150.

“The Nolans Project closely aligns with global customers’ critical raw material diversification plans and their ESG priorities. Support from Australian and international export credit agencies is a direct reflection of the value this represents,” Arafura’s Managing Director Gavin Lockyer said.

“We look forward to close ongoing relationships with Euler Hermes, EFA and NAIF as we continue to progress off-take negotiations and the Project moves through its next critical phases toward full funding, construction and first production,”

ARU’s Australian Stock Exchange-listed share price has risen 6.06 per cent today, currently selling at 52.5c (11:45 am UTC+ 8 hours).

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