Rare earths company Arafura Resources (ASX: ARU) received firm commitments to raise $41.5m to accelerate the development of its globally significant Nolans Project in the Northern Territory.
“It is pleasing that Arafura continues to receive significant interest from new and existing institutional investors, which along with our advanced discussions with a number of major global companies seeking to secure access to NdPr Oxide,” commented Managing Director Gavin Lockyer.
The issue price of 26.5 cents per new share represents a 17.2% discount to the stock’s last closing price on Tuesday and around 7.5% of its market cap.
The placement will also issue investors with one free-attaching option for every two new shares subscribed for, with an exercise price of 34 cents and an expiry date 18 months from the date of issue.
Pre-raise, Arafura had a cash position of $24.7m at the end of the June quarter.
Unsurprisingly, Arafura shares opened -15.6% lower to 27 cents on Friday. The stock is currently trying to stabilise around the 26-28 cent level.
At 11:30 am AEST, around 30m shares had traded hands compared to a 20-day average of approximately 4m.
Arafura is targeting a final investment decision for the Nolans Project in December and hopes to kick off construction works around May next year.
The funds will be used to accelerate near-term milestones for Nolans including front-end engineering and detailed design, construction tendering and early works.
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