Rare earths miner Arafura Resources on Friday warned shareholders that the completion of the bankable feasibility study (BFS) on its Nolans project could be delayed until at least the third quarter of 2013.

Earlier this month, Arafura announced that it had reduced the rate of work on its Nolans project until additional funding has been secured. The reduced work would enable careful management of funds, while continuing to make positive progress in the challenging financial markets, the miner said at the time.

A full assessment of all potential value-creating opportunities would also be carried out, including those arising from the new Nolans resources statement, which was slated for the end of February.

However, Arafura said on Friday that while good progress had been made at the Nolans project in recent months, including significant intercepts of new mineralisation, it was taking longer than expected to complete some of the critical activities.

“Successful completion of this work is essential for the Nolans project to progress to the next step,” the company said.

It added that the full impact of the delay on the company’s schedule to deliver the Nolans BFS would remain uncertain until the availability of sufficient funding was known.

However, subject to the availability of adequate funding from March 2012, it was currently estimated that the BFS would not be completed prior to the third quarter of 2013.

“Further delay may be experienced if the company does not secure additional funding within a reasonable time frame,” the miner warned.

Subject to the availability of funding, Arafura still had to complete a number of critical work streams, including the delivery of an updated resource mode, beneficiation test work, a rare earths demonstration plant, laboratory work for the simplification of the phosphate circuit and the production of a solid phosphate project, as well as a rare-earth oxide separation of cerium and lanthanum.

Arafura currently had some A$26.9-million in cash to meet its immediate commitments, and was exploring various possible sources of funding.

The Nolans project hosts an estimated 850 000 t of rare-earth oxides, 3.9-million tons of phosphate pentoxide and a further 13.3-million pounds of uranium. It was initially slated to start production in 2013, however, this was delayed as the company completed an expanded BFS.