Arafura Rare Earths (ASX:ARU) has secured conditional approval for up to US$300 million ($452.67 million) in debt financing for its Nolans Project from Export Development Canada (EDC).
The Nolans Project is considered to be a shovel-ready neodymium-praseodymium asset expected to supply 4% of the world’s neodymium-praseodymium oxide demand.
The debt facility will have a 12-year term and brings Arafura, which has a market capitalisation of $450.5 million, closer towards a final investment decision on the project.
Managing Director Darryl Cuzzubbo says the financing from EDC highlights the geostrategic importance of Nolans and the need for global diversity in the neodymium-praseodymium supply chain.
“EDC has responded strongly to Nolans as a strategic opportunity that will underpin the electrification economy,” he says.
“We are thrilled to be working with EDC and remain impressed with their innovative thinking and commitment to accelerating a lower carbon future.”
Arafura’s alignment with the energy transition and supply chain diversification has facilitated the support of several export credit agencies (ECA) and government agencies for Nolan’s financing.
The company says the proposed debt facilities of US$775 million comprise direct loans with ECAs and government agencies and a commercial bank tranche supported by ECA debt guarantees.
To date, Arufura has achieved conditional approvals for 68% of the targeted US$775 millions senior debt funding for the project.
Further, Arafura has completed an extensive legal, technical, and financial due diligence program with financiers and offtake discussions with potential counterparties are well advanced.
The company anticipates to provide further details of these arrangements as and when binding agreements are entered into.
The Nolans Project will include a mine, process plant, and related infrastructure to be constructed at the site, which lies 135km north of Alice Springs in the Northern Territory.
Write to Aaliyah Rogan at Mining.com.au
Images: Arafura Rare Earths
