http://www.arafuraresources.com.au/investor-centre/asx-announcements/2012.html
ENNMAT I have noticed from your previous post that you are negative on this company however this is a 63 page update from Arafura with all the current information available to the market,tell me what you think.
ARAFURA RESOURCES LIMITED
ARAFURA DELIVERS
NOLANS PROJECT UPDATE
• Definitive Nolans Rare Earths Project Update released;
• Substantial progress achieved on one of the world’s most advanced
rare earth development projects;
• A Project Base Case has been established and Project economics
are robust:
- A$4.3 billion Net Present Value;
- 30% Internal Rate of Return;
- Capital payback within four years of operation; and
• Arafura is on track to become one of the world’s largest rare earth
producers.
Australian Rare Earths company Arafura Resources Limited (ASX: ARU) (“Arafura” or
the “Company”) is pleased to provide a definitive Project Update on its Nolans Rare
Earths Project (“Nolans” or the “Project”).
The Company has continued to progress Nolans – one of the most advanced rare earths
development projects in the world – despite the current difficult global financial
markets. The Project Update sets out the substantial progress achieved on Nolans to
date, including:
• Extensive testwork that has provided the Company with detailed knowledge of all
facets of the design chain, from demonstration of technology through to mine
design and process flowsheet optimisation;
• Practical application of the results of this testwork to the Project’s design, which is
fundamental to the successful development of a rare earths project and significantly
de-risks the Nolans Project;
• Customer qualification feedback that Rare Earth Oxide (“REO”) products from the
Nolans Bore resource meet product specifications;
• Well-advanced environmental studies with no significant issues emerging;
• Development of a Base Case for the Nolans Project that is expected to deliver
excellent returns to shareholders; and
• A clear path forward to complete the development of the Nolans Project.
Arafura’s Chief Executive Officer, Chris Tonkin, said, “We are very pleased to provide a
detailed Project Update to the market. We are striving for ongoing transparency to
ensure that all stakeholders are informed of the significant achievements that have been
made on the Project and the Company’s overall strategic objectives.
“Importantly, this update reinforces the strong commercial appeal of the Nolans Project
with robust returns expected on the basis of assumptions that we believe to be
conservative. The advanced stage of our Nolans Project is a key point of difference over
other rare earths projects and significantly de-risks our path to both production and
commercialisation,” he added.
“We look forward to providing regular updates to the market on progress at Nolans and
our funding plans as we move towards a final investment decision and look to raise
finance from mid-2013 to develop and construct the Nolans Project.”
Arafura is currently at an advanced stage of a feasibility study into Nolans, developed on
a Base Case that includes a mine and a concentrator at Nolans Bore in the Northern
Territory, and a chemical processing operation at Whyalla in South Australia.
As a result of advanced feasibility work, project risk and uncertainty have been reduced
significantly while project economics remain very robust. The Project’s Base Case
generates a net present value of A$4.3 billion, an internal rate of return of 30% and
capital payback within the fourth year of operations.
The core capital cost for the Base Case is estimated at A$1,395 million with Companyoperated
ancillary plants costed at an additional A$517 million. The increase in capital
expenditure over earlier expectations is in line with comparable global development
projects on a like-for-like basis.
The Company is progressing its Base Case towards the key milestone of raising finance
for the Project. This includes finalising:
• The land acquisition in Whyalla for the processing plant;
• Production of a separated Lanthanum Oxide product to 99% purity;
• Refinement of marketing samples and offtake negotiations;
• Sulphation demonstration-scale plant operation for materials handling analysis;
• Public submissions for the Environmental Impact Statement studies;
• Mine and Plant Design engineering to levels of +/- 25% accuracy;
• Transport, logistics and raw material costings to +/- 25% accuracy; and
• Information Memoranda for potential investors and financiers.
A key final step to validate the process flowsheet and mass balance, as well as the major
recycle circuits, is the successful operation of an Integrated Pilot Plant (“IPP”) that will
be constructed early next year. The IPP results will also be used to verify the final
engineering design.
The Company is also assessing a number of options for process improvements, and work
on this program is scheduled for completion by October 2012. The results may change
the Base Case if they deliver a benefit to Project economics and satisfy the Company’s
Mr Tonkin said, “Arafura remains on track to become one of the world’s largest rare
earths producers and the only new REO supplier globally with significant volumes
available for sale. The demand outlook for rare earths looks strong, with timing of first
production from Nolans expected to coincide with a forecast major global rare earths
supply shortage.”
Separately, shareholders will shortly receive a Notice of Extraordinary General Meeting
(“EGM”) to vote on a previously announced capital injection of approximately
A$9.9 million from ECE Nolans Investment Company (“ECE”), the Company’s long-term
and largest shareholder. ECE has been very supportive of Arafura over a difficult period
and its capital injection will be made by way of a share placement. The EGM will be held
in Perth in September 2012.
- ENDS -
For further information contact:
Chris Tonkin
Chief Executive Officer
T: +61 8 6210 7666
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- Ann: Capital Injection update
Ann: Capital Injection update , page-36
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