Arafura to seek more funding for Nolans BFS
Rare earths hopeful Arafura Resources was looking to raise more cash to fund the bankable feasibility study (BFS) of its Nolans project, in the Northern Territory.
In an interview with Open Briefing, CEO Chris Tonkin said on Friday the company was reviewing its capital raising options, and had been approached by a number of brokers and individual investors.
The company was also considering doing a share placement.
“However, before we consider any of this, we’ve been concentrating on advancing the Nolans project feasibility study so that we can provide a decent information package to shareholders and other parties who might invest when we push the button to raise short-term funds.”
Arafura has pushed back the completion date of its BFS until at least the third quarter of 2013, reducing the work rate on the project until additional capital could be secured.
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 rare-earth oxide separation of cerium and lanthanum.
Tonkin said that, while the company had recently raised some A$8.2-million through a share purchase plan, and had A$27.96-million in cash at the end of the March quarter, these funds would not be sufficient to progress the BFS to completion.
“We’ve effectively wound down all but critical activities. We’re optimising our existing flow sheet and undertaking related test work, but as investors are aware, we haven’t yet run our sulphation demonstration plant.
“While this certainly contributes to a delay, if we can use this time to further develop other parts of the bankable feasibility study, we hope to be able to catch up on the lost time fairly quickly once we’ve procured the necessary funding.”
Tonkin noted that while the company’s recent memorandum of understanding with a Korean multinational would assist in raising short-term funding, the Korean party would not be the source of that 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.
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