Ann: Quarterly Activities Report and Appendix 5B, page-3

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RUSTYHEELA

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29/04/22

13:07

Post #: 61101109
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Originally posted by Birchcorp: ↑

I am happy to breakdown this first.

Fantastic announcement!!

Key review items copied from the announcement in bold;

Offtake discussions continue to incorporate engagement for strategic investment with key parties who recognise the
value of a de-risked NdPr value chain through long-term offtake and strategic investment in the upstream value chain.
Strategic investment in the Nolans project is viewed positively by ECAs and some lenders, and offtake partners are
aware of the need to show alignment between themselves and the project. Engagement with key groups for strategic
investment is lock-step with progress for offtake discussion. At this stage, the Company has no certainty as to the
timing and likelihood of securing strategic investment – these arrangements will be announced to the ASX if (and
when) formal agreements have been concluded.

Engagement with several significant institutional investors indicates strong equity capital market interest in quality
NdPr assets. Arafura’s goal of securing well-structured offtake to support debt participation, EFA and NAIF sovereign
support, ECA debt guarantees, high ESG standards and targeted strategic investment presents a business model that
is strongly aligned with institutional investor objectives.In my mind; This means we will see the offtaker partners investing in ARU as a requirement by ARU-we are in the box seat given that there is surplus parties looking for our supply, and an institutional capital raise that they know is already covered off (they better offer us this time!!). They cannot say with certainty as they expose the offtaker, and hence throughout the document they confirm their is no news to keep the ASX and the obligations to the ASX satisfied... a subtle message that is obvious.

The Company, at this stage, has no certainty as to the timing and
likelihood of successfully concluding binding agreements being entered into. Details of these arrangements will be
announced to ASX if (and when) formal agreements have been executed.These messages littered throughout the report, to keep the ASX at bay...that is obvious to me.

The Company made significant progress during the quarter and remains on track for ore commissioning towards the
end of 2024. The overall schedule for the Project has not changed materially since the Project Update in May 2021,
with the critical path prior to FID remaining the tendering of construction contracts from June 2022. All dates
presented are contingent on securing funding for activities as required. With FEED commencing on schedule in
August 2021 the next key dates are:
▪ Completion of FEED and tendering in May 2022 followed by FID in August 2022; and
▪ A 26-month construction period from FID with first ore processing in October 2024 and first production
towards the end of 2024

The above is a convincing timeline for when items will happen, that has not altered in a year.

Relaxing of COVID-19 travel restrictions during the quarter allowed for face-to-face meetings with prospective
European and Korean customers, advancing negotiations on the key terms of offtake agreementsThe Korean relationship/agreement signed several months ago, clearly was an indication they are one of the partners. Obviously ECA's will also play a part.

Notably; Costs have gone up but provides long term savings, but they have already factored this in...given HATCH and the like are in constant communication.

This is a significantly detailed annoucement that supersedes any other announement I have seen from other potential REO players. ARU has leapfrogged other competitors by several years (mind you there is room for many, but as I have posted previously, it is a decade of planning if you want to be successful in this industry).

Great day for shareholders!!

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Well analysed, well phrased, thanks from a LTH & believer.

ARU Price at posting: 39.5¢ Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

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