Highlights

• Arafura Rare Earths raises A$525M (A$475M placement + A$50M SPP) at A$0.28/share to fully fund its Nolans Project, with Hancock Prospecting contributing A$125M to reach 15.7% ownership.
• The company secures US$775M in senior debt facilities and gains priority status under the US-Australia Critical Minerals Framework, with US$300M LOI from US EXIM Bank pending.
• Nolans Project targets 4,440 tpa NdPr oxide production as Australia's first vertically integrated rare earth facility, with 66% offtake secured and FID targeted for Q1 2026.

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A massive capital infusion positions Arafura Rare Earths Ltd (opens in a new tab) (ASX: ARU) for construction takeoff.

Arafura has executed a landmark A$475 million institutional placement and A$50 million share purchase plan, marking the final equity push toward fully funding its Nolans Rare Earth Project in the Northern Territory. This two-tranche raise—priced at A$0.28 per share, a 25% discount to the prior close—comes on the heels of Australia’s newly formalized U.S.–Australia Critical Minerals Framework, which identified Arafura as one of only two priority projects under the bilateral pact.

Major backer Hancock Prospecting (opens in a new tab) reinforced its position, subscribing for A$125 million, which will lift its ownership to approximately 15.7% post-transaction. With Barrenjoey Markets and Canaccord Genuity underwriting the raise, Arafura’s pro forma cash position jumps to roughly A$584 million—a crucial war chest ahead of the Final Investment Decision (FID) now targeted for Q1 2026.

Funding Milestone Cements Geopolitical Relevance

The scale of institutional and government support underscores Arafura’s transformation from a development-stage explorer into a strategic linchpin in Western rare earth independence. The placement coincides with multiple sovereign financial commitments, including:

• US$775 million in senior debt facilities from Australian, Canadian, and Korean export credit agencies.
• US$100 million in conditional equity from Export Finance Australia.
• A non-binding US$300 million LOI from the U.S. EXIM Bank under the Critical Minerals Framework

Nolans—expected to produce 4,440 tpa of NdPr oxide—is positioned as Australia’s first vertically integrated ore-to-oxide facility, serving global EV and wind turbine supply chains disrupted by China’s latest rare earth export restrictions.

Investor Context: A Bold Step, but Execution Risks Remain

From a market perspective, ARU’s heavily discounted offer price signals both ambition and urgency. The placement will dilute existing holders but, in exchange, derisks one of the most geopolitically strategic resource projects outside China. Technically, ARU’s share price—down from A$0.37 to A$0.28—now sits near long-term support, suggesting short-term consolidation before potential re-rating upon FID confirmation.

Yet, investors should remain alert: Arafura’s success now hinges on execution at scale—containing capex escalation, finalizing offtakes (currently 66% secured with Hyundai, Kia, Siemens Gamesa, and Traxys), and sustaining strong government alignment amid shifting global trade policies.

Summary

Arafura Rare Earths’ A$475M raise completes the financial runway to FID for its Nolans Project, positioning it as a cornerstone in Australia’s and America’s shared rare earth security strategy. While equity dilution and cost control present challenges, this raise effectively transforms Arafura into a fully funded construction-ready developer—potentially the first new Western NdPr producer in nearly two decades.

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