The All Ordinaries Index (ASX: XAO) just edged back into the green in afternoon trade, but Arafura Rare Earths Ltd (ASX: ARU) shares aren't going anywhere today.
Shares in the ASX rare earths miner closed yesterday trading for 19 cents apiece. And that's where they'll stay today after the company entered a trading halt pending an announcement regarding a capital raising.
Arafura shares will remain suspended from trading until the company announces the completion of the placement component of that capital raising or the start of trading on Friday.
Here's what's going on.
What's happening with Arafura shares?
Arafura shares received plenty of attention yesterday after the company announced it had achieved a series of milestones related to the final investment decision (FID) for its Nolans Project.
The company aims for Nolans to be among Australia's first ore-to-oxide rare earths processing facilities. Situated in the Northern Territory, the project would be a key source of rare earths outside of China.
Yesterday, the ASX rare earths miner said the debt funding required for the project had been completed. Arafura secured the remaining conditional approvals from commercial lenders for US$775 million of senior debt facilities and a US$80 million Cost Overrun Facility (COF).
The debt package totals more than US$1 billion (AU$1.5 billion).
Quarterly update
Arafura shares garnered additional interest yesterday following the release of the miner's quarterly update, covering the three months to 30 June.
Arafura has largely been focused on securing the funds so it can proceed with its final investment decision (FID). Management advised it would continue to advance Arafura's offtake and equity strategies towards the FID by the end of 2024.
It noted that project activities over the quarter remained limited to those necessary to support finance, critical path activities, compliance, and progressing improvement ideas that reduce capital, schedule and risk.
Nolans is shovel-ready, and the company said it would commence construction activities immediately upon reaching FID.
What did management say?
Commenting on the funding progress that could offer long-term growth potential for Arafura shares, managing director Darryl Cuzzubbo said, "Finalising our debt funding strategy is a phenomenal achievement."
Cuzzubbo added:
The level support we have received from export credit agencies and commercial lenders signifies that the Nolans Project is indeed a global opportunity to secure a diversified NdPr [neodymium and praseodymium] supply chain.
And Cuzzubbo gave a nod to the capital raise that sees Arafura shares frozen today.
"While we now shift our focus to executing the equity strategy, the project team continues to prepare for commencement of construction," he said.
