Shares in Arafura Resources Limited (ASX: ARU) are soaring in early trade today after the company unveiled its Nolans Project's feasibility study.
The Arafura share price is up 11.1% at the time of writing, trading at 20 cents apiece.
Nolans is a neodymium-praseodymium (NdPr) project, located in the Northern Territory. It's 100% owned by Arafura.
Let's take a look at the project's feasibility.
Nolans Project
The Nolans Project will include a mine and processing plant, as well as other related infrastructure. It will mine NdPr and produce NdPr oxide on-site.
The feasibility study found Nolans has a mine life of 38 years and the ability to produce 4,440 tonnes of NdPr oxide each year.
It expects the project's earnings before interest, tax, depreciation, and amortisation (EBITDA) to be $354 million a year.
According to Arafura, Nolans operating costs could be ultra-low – costing US$24.76 per kilogram of NdPr oxide.
Nolans has been assessed by both the Northern Territory Environment Protection Authority and the Australian Government Department of the Environment and Energy. It's now the only NdPr-focused project in Australia with environmental permits for mining, beneficiation, extraction, and separation of rare earths.
Arafura expects the feasibility study will be the basis for securing finance, with the company targeting a final investment decision in August 2022.
Front-end engineering and design (FEED) activities are expected to start at the Nolans Project next quarter.
Commentary from management
Arafura managing director Gavin Lockyer commented on the feasibility study, saying:
The size of the Nolans deposit will provide our customers security of supply for their critical raw materials and our 'ore to oxide' at a single site provides provenance that their product is being derived from processes aligned with their ESG priorities.
With the forecast demand growth for NdFeB magnets to support the manufacture of electric vehicles amongst other applications, the rising imperative for nations to shore up sustainable supply chains and the lack of alternative NdPr sources outside of China, Arafura is moving ahead with greater confidence than ever before.
Arafura Resources share price snapshot
The Arafura Resources share price has performed well on the ASX lately.
Currently, the Arafura share price is up 38% year to date. It's also gained 157% over the last 12 months.
The company has a market capitalisation of around $210 million, with approximately 1.1 billion shares outstanding.
