🕐17.02.10 - 01:54 Uhr
Arafura announces A$17.5M Placement and A$17.8M Rights Issue to advance Nolans Project
ASX: ARU
ASX ANNOUNCEMENT
17 February 2010
Arafura announces A$17.5M Placement and A$17.8M Rights Issue to advance
Nolans Project to meet world Rare Earths demand
The Directors of Arafura Resources Limited (ASX: ARU) ("Arafura" or "the
Company") are pleased to announce a capital raising comprising:
- a Placement to accredited institutional investors and sophisticated
investors who have committed to subscribe for 28.2 million shares at A$0.62
per share to raise A$17.5 million before issue costs.
This placement was
approved by Shareholders at the Companys AGM in November 2009; and
- a 1 for 10 pro-rata renounceable Rights Issue ("Rights Issue") to
eligible Shareholders at A$0.62 per share to raise up to A$17.8 million
before issue costs The Rights Issue will not be underwritten.
Major Shareholder East China Exploration & Development Bureau ("ECE") has
been invited to maintain its pro-rata shareholding (24.86%) at the
Placement price.
Any investment by ECE will require Australian and Chinese
regulatory approvals.
In the event that timing of regulatory approvals
prevents ECE from participating in the Rights Issue, additional shares will
be made available to enable it to maintain current pro-rata shareholding if
it elects to do so, and subject to regulatory approval.
If ECE elects and
is able to maintain its current pro-rata shareholding and it is by way of
Placement, only a further A$11.7m would be raised.
If ECE achieves its
pro-rata shareholding in full or part by way of the Rights Issue then the
amount of additional capital raised will be less.
The funds raised, together with Arafuras existing cash reserves, will be
used for:
- ongoing drilling and exploration activity with the aim to define the full
extent of the Nolans resource;
- progressing activities of the Nolans Projects Bankable Feasibility Study
and the Environmental Study; and
- corporate and offer costs as well as working capital requirements.
Arafura Managing Director, Dr Steve Ward said "The capital raising has been
structured to both attract new institutional Shareholders and, importantly,
to encourage maximum participation by our existing Shareholders."
"The Boards decision to include a pro-rata Rights Issue to existing
Shareholders is in recognition of their long-term support of Arafura
throughout the development of its key asset, the wholly-owned Nolans Rare
Earth Project, and provides further opportunity to participate in the
Companys future growth," Dr Ward said.
"The new funds will enable Arafura to move forward at full pace with the
Nolans Project and with other related work programs."
Nolans Project Strategic Importance
Demand for rare earths continues to grow underpinned by new technology and
clean energy applications.
Industry commentators all note that suppliers
will struggle to keep pace with future demand, with shortfalls likely.
Historically, China has supplied approximately 95% of the global rare earth
needs.
In the past few months, China has indicated its intention to reduce
and regulate exports to meet its increasing domestic needs.
This will
further tighten global rare earth markets..
Dr Ward said Arafuras 100%-owned Nolans Project contains a world-class
rare earths deposit capable of supporting a 20-year mine life and the
Company is targeting production of 20,000 tonnes of Rare Earth Oxide (REO)
per annum from 2013.
"The fact that Arafura is one of the few near-term rare earths producers
outside China capable of supplying customers in markets throughout the
world makes the Company attractive to all global rare earth users."
To download the full ASX Announcement click here:
For more information contact:
http://esp.gewru.com/download/files/12414/1084018/20100217%20-%20Arafura%20announces%20Placement%20and%20Rights%20Issue%20to%20raise.pdf
Steve Ward
Managing Director
Arafura Resources Limited
T: +61 (8) 6210 7666
Gavin Lockyer
Chief Financial Officer
Arafura Resources Limited
T: +61 (8) 6210 7666
Felicity Nuttall
Professional Public Relations
T: +61 (8) 9388 0944
M: +61 (0)430 184 599
Ends
For more information contact:
Alistair Stephens
Managing Director
Arafura Resources Limited
T: 0421 612 573
Gavin Lockyer
Chief Financial Officer
Arafura Resources Limited
T: 0419 914 072
Felicity Nuttall
Professional Public Relations
T: 08 9388 0944
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