Name of the Project
Nolans neodymium/praseodymium rare earths project.

Location
Northern Territory, Australia.

Project Owner/s
Arafura Resources.

Project Description
The Nolans project will encompass a mine, a process plant ­– comprising beneficiation, extraction and separation plants – and related infrastructure.

An updated feasibility study has optimised the production schedule and financial outcomes of the project. The pit optimisations, mine designs, ore reserves and mining inventory are unchanged from the updated mining study in March 2020.

The project has ore reserves of 29.5-million tonnes grading 2.9% total rare-earth oxides, 13% phosphorous pentoxide and neodymium/praseodymium enrichment of 26.4%.

The updated feasibility study has reported a minor increase in the concentrate processing capacity of the process plant – from 330 000 t/y to 340 000 t/y. The definitive feasibility study was based on 300 000 t/y.

The beneficiation capacity has increased from one-million tonnes a year to 1.5-million tonnes later in the life-of-mine to accommodate lower run-of-mine head grades.

Minor changes to the hydrometallurgical recovery of rare earths and phosphorous pentoxide, resulting from the changes to the processing plant design, have also been reported.

The project is expected to produce 4 440 t/y of neodymium/praseodymium oxide over its 38-year mine life. Production of middle and heavy rare-earth oxides is estimated at 474 t/y and phosphoric acid at 144 393 t/y.

Potential Job Creation
The project will create 650 jobs at the peak of construction and new high-value export opportunities.   

Net Present Value/Internal Rate of Return
In the base case, the project has a net present value, at an 8% discount rate, of A$2.4-billion and an internal rate of return of 19.3%.

Capital Expenditure
Preproduction capital is estimated at A$1.39-billion plus A$196-million in contingency.

Planned Start/End Date
First ore-processing is expected in October 2024, with first ore-production expected towards the end of 2024. These dates are contingent on securing funding for the activities required.

Latest Developments
Arafura Rare Earths has appointed specialist financier KfW IPEX-Bank as an additional mandated lead arranger (MLA) and bookrunner to arrange debt financing for the project.

KfW will work in conjunction with Société Générale and National Australia Bank, which were appointed as initial MLAs to arrange the debt financing facility for the project.

The mandate with KfW includes an indicative commitment to provide up to $75-million of commercial debt financing for the Nolans project, in addition to the funding being sought with the initial MLAs. The limited recourse debt financing package is intended to comprise commercial bank facilities provided by the MLAs, Export Credit Agency- (ECA-) covered finance and, to the extent required, further financing through additional MLA banks or through a syndication process.

In addition to the finance being arranged by the MLAs, Arafura has received letters of support from Export Finance Australia and the Northern Australia Infrastructure Facility for A$200-million and A$100-million in senior debt facilities respectively.  

Arafura has also been awarded A$30-million in grant funding under the federal government’s Modern Manufacturing Initiatives, and has accepted commitments to raise A$121-million under a share placement priced at 37c a share

Further, planning is on track for long-lead procurement and construction in early 2023, while a final investment decision is scheduled for March 2023.

Key Contracts, Suppliers and Consultants
KBR, Wave International and Arafura’s geological, metallurgical and project personnel (updated definitive feasibility study); Mining Plus (mine planning, design and scheduling, along with mining cost estimation); Simulus (process simulation); and Infinity Corporate Finance (financial modelling).

Contact Details for Project Information
Arafura Resources, tel +61 8 6210 7666 or email arafura@arultd.com.