- Arafura Resources (ARU) appoints two mining finance institutions as lead arrangers of debt financing for its Nolans Project in the Northern Territory
- Societe Generale and National Australia Bank will jointly arrange the debt financing facility worth 60 per cent of the estimated total development cost of the project
- The financing is conditional on completion of a successful due diligence process and credit approval
- The appointment follows a grant of $30 million under the Federal Government’s modern manufacturing initiative, which will go towards construction of Arafura’s rare earth separation plant
- Arafura Resources is up 4.3 per cent, trading at 36.5 cents at 10:06 am AEST
Arafura Resources (ARU) has appointed two mining finance institutions as the lead arrangers of debt financing of its Nolans Project in the Northern Territory.
The company’s wholly-owned neodymium praseodymium rare earth project is located 135 kilometres north of Alice Springs, and has a 38-year mine life.
Societe Generale and National Australia Bank have been appointed as the initial mandated lead arrangers (MLA) and book-runners to arrange the debt financing facility for the development of the project.
“The appointment of the MLAs represents an important milestone in the company’s progress towards a final investment decision this year,” Managing Director, Gavin Lockyer said.
“The MLAs have significant international and domestic expertise in natural resources project financing and our ability to attract them reflects the quality of the underlying Nolans Project.”
The two initial MLAs have been engaged to arrange a finance facility targeting debt funding worth 60 per cent of the estimated total development cost of the project, including working capital and other credit facilities. The proposed funding package will also comprise a separate cost overrun facility.
The MLAs will also seek to arrange limited recourse debt finance of approximately US$510 million (approximately A$716 million).
The financing is conditional on completion of a successful due diligence process, agreement of terms and conditions, entry into binding facility agreements, and credit approval.
In addition to the targeted financing, the company received letters of support from Export Finance Australia and the Northern Australia infrastructure facility for senior debt facilities of up to $200 million and $100 million respectively, for a maximum 15-year facility term.
The company was also recently granted $30 million under the federal government’s modern manufacturing initiative, which will go towards funding the construction of its rare earth separation plant.
Arafura Resources was up 4.3 per cent, trading at 36.5 cents at 10:06 am AEST.