ARU
Arafura Rare Earths LTD
ASX
FY24 Sustainability Report
Sentiment:
Sustainability Report
2 December 2024 7:23 PM
Arafura Rare Earths Limited (ARU) announced over US$1 billion in debt funding for its Nolans Project, highlighting the geostrategic importance of its role in a diversified global supply chain for rare earths essential to green technologies.
Capital raise
A$20 million was received from sophisticated institutional investors.
An additional A$4.6 million was received from existing shareholders through a share purchase plan.
Summary
- Arafura Rare Earths Limited (ARU) released its FY24 Sustainability Report.
- The report covers the company's contributions to sustainable development between July 1, 2023, and June 30, 2024.
- The Nolans Project, a 100%-owned rare earths project in the Northern Territory, Australia, is expected to produce 4,440 tonnes per annum of NdPr over its 38-year mine life.
- A preliminary study considered expanding the Nolans processing facility by up to 150 percent.
- In July 2024, ARU announced over US$1 billion in debt funding from commercial banks and export credit agencies.
- An Environmental and Social Due Diligence (ESDD) was completed against three international standards.
- An Environmental and Social Action Plan (ESAP) was developed to address gaps identified in the ESDD.
- The company completed early site works in late 2023 and is preparing for construction.
- ARU achieved a 60:40 female to male gender diversity on its Executive Leadership Team.
- The company's workforce comprised 55 team members at the end of FY24, with 35% female representation and 3.5% identifying as Aboriginal and Torres Strait Islander.
- In FY24, ARU employees and contractors worked approximately 100,904 hours with no recordable injuries.
Sentiment
Score: 7
Explanation: The report showcases significant progress on funding and sustainability initiatives, but the reliance on future equity funding and potential risks associated with project development temper the overall positive sentiment.
Positives
- Over US$1 billion in debt funding secured for the Nolans Project.
- Successful completion of early site works.
- Positive ESDD results highlighting compliance with international standards.
- Board approval of the ESAP.
- Significant progress on sustainability initiatives.
- No recordable injuries during approximately 100,904 hours worked.
- Improved gender diversity on the Executive Leadership Team.
Negatives
- Arafura paid a penalty of $16,500 to the Federal Government due to a procedural error.
- Construction commencement is subject to final investment decision and equity funding.
Risks
- Uncertainty regarding securing sufficient equity funding for final investment decision and construction commencement.
- Potential for future delays in project timeline.
- Climate-related risks, including energy transition risks and physical risks.
- Potential for negative impacts on local communities and the environment.
Future Outlook
The next steps are to secure the equity required to complete the funding strategy, announce a final investment decision, and commence construction. Further reporting on climate-related risks and opportunities, and mitigation measures, is expected in the FY25 Sustainability Report. The company plans to apply for accreditation from the Office of the Federal Safety Commissioner (OFSC).
Management Comments
- Our dedication to responsible project development, minimising environmental impact and creating long-term value for our stakeholders has never been stronger.
- The quantum of the debt funding required completion of an Environmental and Social Due Diligence (ESDD) for the lender group and was completed against three internationally recognised standards. An impressive outcome for a company of Arafuras size and maturity.
- Our refreshed Board and Executive Leadership Team (ELT) has brought a step change in expertise and a renewed focus on delivering sustainability outcomes.
Industry Context
The announcement of significant debt funding for the Nolans Project positions Arafura favorably within the growing rare earths market, particularly given the increasing global demand for NdPr driven by the expansion of green technologies. The project's 'shovel-ready' status and focus on responsible sourcing also align with broader industry trends towards sustainable and ethically sourced materials.
Next Steps
- Secure equity funding to complete the funding strategy.
- Announce a final investment decision.
- Commence construction of the Nolans Project.
- Continue implementing the ESAP.
- Apply for OFSC accreditation.
- Develop and implement a climate-related risk and opportunity management framework.
- Continue to mature the ESMS.
Key Dates
- July 1, 2023: Start of the reporting period for Arafura's FY24 Sustainability Report.
- August 2022: Dewatering licence granted for the Nolans Project mine pit area.
- March 2023: Water supply licence granted for the Nolans Project production borefield.
- February 2024: Darryl Cuzzubbo commenced as Managing Director and CEO.
- April 8, 2024: Appointment of new non-executive directors to the Board.
- July 2024: Announcement of over US$1 billion in debt funding for the Nolans Project.
- August 2024: Penangke Cultural Consultants received the Best Blak Consultancy Business of the Year award.
- September 11, 2024: A$4.6 million received from existing shareholders through a share purchase plan.
- June 30, 2024: End of the reporting period for Arafura's FY24 Sustainability Report.
Keywords
Rare Earths, Nolans Project, NdPr, Sustainability, ESG, Debt Funding, Electric Vehicles, Green Technology, Australia, Mining
ARU
Arafura Rare Earths LTD
ASX
Sector: Materials
Filings with Classifications
Capital raise
20 May 2025 12:10 AM
Conference Presentation
- The company requires a new equity requirement of US$793m (including COF).
- Less NRFC US$133m (A$200m).
- Remaining new equity requirement of US$660m.
Delay expected
20 May 2025 12:10 AM
Conference Presentation
- The sources and uses of funds section includes an increase in ramp-up period from 2 years to 3 years and a 3-month delay in first production.
Delay expected
29 April 2025 6:47 PM
Quarterly Activities Report and Appendix 5B
- The final investment decision for Nolans has the potential to extend beyond the previously advised window of the first half of 2025 calendar year due to the assessment of a potential joint venture structure.
Capital raise
29 April 2025 6:47 PM
Quarterly Activities Report and Appendix 5B
- Arafura is assessing a potential joint venture (JV) structure which could significantly reduce the equity required to fund Arafura's remaining project interest.
- The company and its advisors regularly consider and assess options put forward by third parties (including potential corporate and project-level transactions) which could, if implemented, give rise to an alternative pathway to the funding and development of the Project for the benefit of shareholders.
Capital raise
4 March 2025 4:21 PM
Investor Presentation
- The company plans to raise equity through industry cornerstones, institutional investors, and an offer to new and existing shareholders.
- The equity raise is intended to fund the US$1.2 billion Nolans Project.
Better than expected
19 February 2025 12:53 AM
Interim Financial Report
- The net loss decreased compared to the previous year (A$18.85 million vs A$66.87 million).
Capital raise
19 February 2025 12:53 AM
Interim Financial Report
- Arafura signed a binding term sheet with the NRFC for a A$200 million investment through unsecured convertible notes.
- The company may seek additional equity to reduce the amount of funding being sought through public raising.
Delay expected
31 January 2025 12:53 AM
Update to Agreement
- The gas supply agreement deadline has been extended from February 4, 2025, to March 31, 2025.
Capital raise
29 January 2025 4:20 PM
Quarterly Activities Report
- The company is engaging with other potential cornerstone investors to secure the remaining equity required for the project.
- The A$200 million investment from the NRFC is expected to be a catalyst for attracting additional equity funding.
Delay expected
29 January 2025 4:20 PM
Quarterly Activities Report
- The gas supply agreement condition precedent date has been extended to 4 February 2025, with potential for further extension.
Capital raise
14 January 2025 4:23 PM
Funding Announcement
- The convertible notes will convert into shares at a 40% premium to the reference price, which will be determined by a future equity raising.
- The company expects to announce the equity financing around the time of the Final Investment Decision for the Nolans Project.
Delay expected
19 December 2024 5:36 PM
Project Update
- The condition precedent date for the gas supply agreement has been extended from December 31, 2024, to February 4, 2025.
Delay expected
19 December 2024 3:30 PM
Operational Update
- The condition precedent date for the gas supply agreement has been delayed from December 31, 2024, to February 4, 2025.
Delay expected
19 December 2024 3:53 AM
Operational Update
- The condition precedent date for the gas supply agreement has been extended from December 31, 2024 to February 4, 2025.
Capital raise
2 December 2024 7:23 PM
Sustainability Report
- A$20 million was received from sophisticated institutional investors.
- An additional A$4.6 million was received from existing shareholders through a share purchase plan.
Capital raise
21 October 2024 4:00 AM
Revised Presentation
- The company is seeking to raise the remaining equity funding through an offer to new and existing shareholders.
Capital raise
16 October 2024 9:27 PM
Annual Report Presentation
- The company is seeking to raise the remaining equity funding needed to commence construction.
Capital raise
16 October 2024 9:24 PM
Annual Report
- Arafura is actively seeking equity funding to reach a final investment decision on the Nolans Project.
Delay expected
16 October 2024 9:24 PM
Annual Report
- While the company is making progress, the timeline for reaching a final investment decision has been extended due to the complexities of securing funding in a challenging market environment.
Capital raise
16 September 2024 2:10 AM
Annual Report
- A $20 million institutional placement was completed.
- A share purchase plan is targeting an additional $7 million, with potential for up to $3 million in oversubscriptions.
Capital raise
16 September 2024 2:04 AM
Annual General Meeting Notice
- If all Placement Options are exercised, the Company will raise an additional $17,578,125 (before costs) to further progress the development of the Nolans Project and for general working capital purposes.
Capital raise
10 September 2024 6:18 PM
Share Purchase Plan Results
- The SPP raised $4.6 million (before costs).
- A previous placement raised $20 million.
Worse than expected
10 September 2024 6:18 PM
Share Purchase Plan Results
- The SPP raised $4.6 million, which is less than the targeted $7 million.
Capital raise
5 September 2024 6:18 PM
Capital Raising Announcement
- A$20 million placement completed in two tranches.
- A$7 million target for the share purchase plan (SPP), with a potential for A$3 million in oversubscriptions.
Capital raise
3 September 2024 11:29 PM
General Meeting Results
- Share issuance under Tranche 1 and Tranche 2 of a placement.
- Share issuance under the SPP (including shortfall offer).
- Share issuance to directors under the SPP.
Capital raise
2 August 2024 1:35 AM
Share Purchase Plan Announcement
- Arafura Rare Earths is conducting a Share Purchase Plan (SPP) to raise A$7 million before costs.
- The company may accept oversubscriptions up to A$3 million.
- The SPP offer price is A$0.16 per new share.
Capital raise
1 August 2024 6:19 PM
Prospectus
- The company may offer SPP Shortfall Shares to specific investors if the SPP does not reach its target of $7 million.
- The company has conditional approval for US$775 million in senior debt facilities, an additional US$80 million for a cost overrun facility (COF) and a further US$200 million in the form of a standby liquidity facility (SLF).
Delay expected
28 July 2024 7:28 PM
Gas Sales Agreement Announcement
- The condition precedent date of the Arafura GSA has been extended by five months to December 31, 2024.
- The start date of the Arafura GSA has been deferred by two years to January 1, 2028.
- The NGP is not expected to reopen until later this year.
Delay expected
28 July 2024 6:58 PM
Gas Sales Agreement Announcement
- The Arafura GSA supply start date has been deferred by two years to January 1, 2028.
- The Northern Gas Pipeline (NGP) is not expected to re-open until later this year.
Capital raise
28 July 2024 6:35 PM
Announcement and Media Release
- The company will require further gas contracting and funding arrangements by Central to progress appraisal wells at Mereenie and Palm Valley.
Delay expected
28 July 2024 6:35 PM
Announcement and Media Release
- The Arafura GSA has been amended, deferring the supply start date by two years to January 1, 2028.
Capital raise
23 July 2024 7:23 PM
Trading Halt Request
- Arafura Rare Earths is completing the placement component of a capital raising.
- The trading halt is pending an announcement regarding the completion of this placement.
Capital raise
22 July 2024 8:49 PM
Quarterly Activities Report
- The company intends to execute a capital raising to secure the equity required for the project.
- Barrenjoey has been appointed as a third joint lead manager alongside UBS AG and Canaccord Genuity to assist in raising the equity.
Capital raise
22 July 2024 6:12 PM
Investor Presentation
- The company is focused on securing equity, leveraging strategic nature of NdPr.
- The balance to be raised through offer to new and existing shareholders.
Delay expected
22 July 2024 6:12 PM
Investor Presentation
- The sources and uses of funds includes adjustments for a 3-month delay in first production.
Capital raise
22 July 2024 6:12 PM
Project Funding Update
- The company needs to raise new equity to meet the balance of the Projects funding requirement.
- The COF equity component of US$80 million is targeted to be raised at the same time as the new equity.
Delay expected
22 July 2024 6:12 PM
Project Funding Update
- The project includes an increase in ramp-up period (from 2 years to 3 years), and a 3-month delay in first production.
Capital raise
28 May 2024 9:00 PM
Conference Presentation
- The company is planning a potential build-up of equity capital.
- Customer/strategic commitment will drive participation of financial groups.
- The balance to be raised through offer to new and existing shareholders.
Capital raise
28 April 2024 6:26 PM
Quarterly Activities Report
- The company intends to execute a capital raising when debt financing with key credit approvals is in place.
- The company is targeting a substantial portion of the equity requirement via cornerstone investors ahead of launching a public equity raising with institutions and retail investors.
Capital raise
22 April 2024 3:09 AM
Conference Presentation
- The company is planning a potential build-up of equity capital.
- The company has appointed Joint Lead Managers.
- The company is seeking customer/strategic commitment to drive participation of financial groups.
- The company is planning to raise capital through an offer to new and existing shareholders.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.