Arafura Resources Limited (ASX:ARU) has reached several milestones needed to progress the development of its Nolans Neodymium-Praseodymium (NdPr) Project in the Northern Territory.
These include Major Project Status (MPS) renewal from the Australian Government, mineral leases granted from the NT Government, the signing of the Native Title Agreement plus the completion of a $7 million placement to fund project development.
The company is ready to commence project development once offtake and funding have been secured.
Major project status
The company recently secured MPS renewal from the Australian Government for another three years.
This acknowledges Nolans as a strategically significant Australian critical minerals and advanced materials development project and provides access to a range of Australian Government services and programs.
The MPS allows a single entry point for a range of Australian Government coordination services, including helping to map out the project’s commercial compliance obligations and assisting with identifying suitable government employment and training programs that supports Arafura’s efforts in delivering jobs and investment opportunities to Central Australia.
Supporting the NT economy
The Australian Government’s renewal of MPS coincides with the grant of Arafura’s cornerstone development tenure at Nolans and the company’s formal submission to the Territory Economic Reconstruction Commission which is tasked with developing strategies to accelerate the progress of investment-ready long-life critical minerals projects like Nolans as an engine for economic growth of the Northern Territory.
The project represents a unique opportunity for Australia to diversify the rare earths supply chain, increase advanced materials manufacturing and potentially seed new high technology downstream industries from one of the world’s safest and most secure jurisdictions.
Arafura is positioned to play a key role in addressing the fragile nature of or gaps in critical minerals supply chains that have been brought into greater focus by commercial disruptions caused by international trade tensions and COVID-19.
Mineral leases granted
Arafura also jumped the final regulatory hurdle for the project with the granting of mineral leases (MLs) by the NT Government.
This key milestone secures the Nolans Bore mineral resource for an initial period of 25 years.
The MLs, which will host the Nolans mine, process plant, waste storage facilities and accommodation village, were granted to Arafura’s wholly-owned subsidiary Arafura Rare Earths Pty Ltd (ARE) by Northern Territory Minister for Primary Industry and Resources Paul Kirby.
Nolans Project location
Native Title Agreement
This comes after the signing of the project’s Native Title Agreement (NTA) last month by Anmatyerr native title holders and Central Land Council (CLC) who, in so doing, gave their consent to the grant of all the MLs allowing for multiple renewals beyond the initial grant term.
The grant process provides Arafura with the exclusive right to mine and to occupy the primary mineral lease, ML 26659, ancillary mineral leases, MLs 30702 to 30704, 32411 to 32416 and related access authorities.
These mineral leases host the mine, process plant, tailings and process residues containment facilities, accommodation village, borefield and the infrastructure elements of the Nolans operation.
Under the terms of the Native Title Agreement:
- Arafura personnel who work at the operation will undergo cultural awareness induction and training;
- Arafura commits to provide employment and training as well as business opportunities for the native title holders and local Aboriginal people to win contract work from ARE;
- ARE acknowledges its environmental commitments and responsibilities and its duty to protect sacred sites and sacred objects; and
- ARE agrees to processes and information sharing to ensure its agreed commitments are met.
The Native Title Agreement also provides for compensation payments for the benefit of native title holders in recognition of the impacts of the project on their native title rights and interests.
The compensation arrangements include upfront and annual payments as well as a royalty.
$7 million placement
In June Arafura received firm commitments to raise $7 million through a share placement to institutional and professional investors of 112.9 million new shares at an issue price of 6.2 cents per share.
Funds will be spent on early engineering work at the Nolans Project, including pre-front end engineering and design (FEED), execution readiness activities as well as for general working capital purposes.
The company considered the strong support as an endorsement of the project which is expected to play a role in diversifying rare earth supply chains in Australia.
Step closer to final investment decision
These milestones bring the company closer to a final investment decision at a time when critical minerals like rare earths are in growing demand around the world and Arafura believes they will provide investors with a major confidence boost that the project is ready to proceed, subject to finance.
Additionally, the company is in the advanced stages of preparing a Mining Management Plan (MMP) for authorisation by the Northern Territory Department of Primary Industry and Resources (DPIR) which will allow site-based activities to progress.
The milestones are the catalyst to further advance engagement with governments as well as potential offtake, debt and project funding partners.