Article by Daniell Newell courtesy of the West Australian.
Gina Rinehart’s money-making machine Hancock Prospecting is again splashing the cash, this time taking a cornerstone stake in Arafura Rare Earths’ $121 million capital raising.
Hancock has emerged with a 10 per cent stake in Arafura, which is advancing its $1.6 billion Nolans Creek project in the North Territory, after tipping $60m into the discounted placement offering.
The placement was pitched at 37¢ a share, a 15.9 per cent discount to Arafura’s closing price of 44¢ before it entered a trading halt on Friday.
Nolans Creek, north of Alice Springs, is one of the world’s largest undeveloped rare earths projects with an existing JORC compliant resource of 56 million tonnes at 2.6 per cent total rare earth oxides with 26.4 per cent neodymium-praseodymium enrichment.
Arafura is aiming for a final investment decision on the project in March, having last month sealed a cornerstone offtake deal with two global carmakers.
Managing director Gavin Lockyer said the local and international interest in the raising reflected the increasing awareness of the importance of its neodymium-praseodymiumoxide product within the supply chains essential to the global energy transition.
“The Nolans Project is well positioned to become a ground-breaking strategic development for Australia with its single-site ore to oxide business model,” Mr Lockyer said.
“Nolans is important to all countries that are seeking diversified and robust critical material supply chains as they strive to achieve their net-zero emissions targets.”
Arafura also raised an additional $12m through a share purchase, also priced at 37¢ a share.
The company already has agreements in place to supply South Korea’s Kia and parent company Hyundai with neodymium and praseodymium over an initial seven years, representing nearly half of the 85 per cent of annual production available to be secured under long term sale arrangements.
A busy week for profit reports last week showed Mrs Rinehart had amassed a near $6 billion profit for Hancock Prospecting.
Hancock encompasses not only Mrs Rinehart’s lucrative iron ore mining interests in the Pilbara, including her half share of the Rio Tinto partnership over the Hope Downs mines, but her investments across coal, beef and agriculture.
She is also rumoured to have taken a stake in the initial public offering of rare earths hopeful VHM.
