Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Investor Presentation (December 2023)
38 slides from Arafura Rare Earths's investor presentation, Dec 13, 2023
Slide 1: Arafura Rare Earths Equity Raising Presentation
Not for release to US wire services or distribution in the United States. ASX: ARU 13 DECEMBER 2023 Arafura Rare Earths Equity Raising Presentation
Slide 2: Disclaimer
Disclaimer This presentation is dated 13 December 2023 and has been prepared the investment objectives, financial situation or particular needs of any consequential or contingent loss or damage arising from this by Arafura Rare Earths Limited (“Arafura”, “Arafura Rare Earths” or particular investor
Slide 3: Corporate Snapshot
Corporate Snapshot Share Price Performance Dec 2022 to Dec 2023 $120 $0.80 Price (AUD) Volume NdPr price Arafura’s Vision $0.70 $100 $0.60 To be the trusted, leading rare earths $80 A$ per share partner of customers in high impact Price (US$) $0.50 technologies and enduringly lift the $60 $0.40 sust
Slide 4: Executive Summary
Executive Summary SITE UPDATES MARKET & OFFTAKE PROJECT FUNDING • Enabling works commenced March 2023 • Significant opportunity for Arafura to deliver • Continued advancement of debt facility terms including: stable NdPr supply into an independent, sheet and engagement with lenders to seek to o Site
Slide 5: Project Update
Project Update 19 December 23 5
Slide 6: The Nolans Project
The Nolans Project While the Nolans Project contains all the rare earth elements, it is particularly Australian based, NdPr focused and enriched in the ‘magnet feed’ rare earths neodymium and praseodymium (NdPr) aligned with the global energy 60 59 transition Nd Pr NEODYMIUM PRASEODYMIUM The dominan
Slide 7: Nolans Overview
Nolans Overview TECHNICAL INFRASTRUCTURE & LANDMARKS ACCESS Large high-grade resource Located 135km north of Alice Springs. underpinning 4,440tpa NdPr oxide production and minimum 38-year Personnel access to site via major airport at life of mine. Alice Springs and sealed highway. Extensive ore to o
Slide 8: Recent Project Milestones
Recent Project Milestones ENABLING WORKS INITIAL EARTHWORKS WATER SITE CONSTRUCTION INFRASTRUCTURE INFRASTRUCTURE • Preliminary power station • Installation of 48-person fly-camp. • Improvement of site access road • Completion of monitoring bores engineering with preferred • Commissioning of stages
Slide 9: Capital Cost Trending
Capital Cost Trending Capital cost trending indicates that CAPITAL COST CAPITAL COST the capital cost to first production TRENDING INCLUDES TRENDING EXCLUDES at Nolans is likely to be • Trending adjustments to cost • Actual and forecast expenditure that approximately A$1,680 million. estimates provi
Slide 10: Indicative Project Schedule
Indicative Project Schedule ENABLING LLI PROCUREMENT CONSTRUCTION COMPLETION MAIN CONSTRUCTION OPERATIONS WORKS EARLY WORKS CONSTRUCTION AND COMMISSIONING WORKS ACTIVITY 2023 2024 2025 2026 2027 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M Con
Slide 11: NdPr Market & Offtake
NdPr Market & Offtake 19 December 23 11
Slide 12: Strategic Importance of Producing NdPr Oxide
Strategic Importance of Producing NdPr Oxide 1. Mine 3. RE Separation 5. NdPr Metal 6. NdFeB Alloy/ 7. End User/ Manufacturer 2. RE Extraction 4. NdPr Oxide (conversion) Magnet Maker NdFeB Magnet Value Chain Arafura Opportunity DOMESTIC DOMESTIC, China Value PRODUCTION IMPORT & TOLL Chain & IMPORT P
Slide 13: Short term catalysts
Short term catalysts China export controls on germanium, gallium and now "This bold and unexpected move by China in graphite has taken us by surprise, arriving graphite far sooner than anyone could have predicted." Alkemy Capital Investments Chief Commercial Officer Kien Huynh China said on 20 Octob
Slide 14: Arafura target market led by energy transition
Arafura target market led by energy transition Electric vehicles and wind turbines to GS Global ‘bull case’ demand forecasts for nearly double NdPr demand by 2030 electric vehicles and wind turbines NdPr demand by source (kt NdPr) EV forecasts in million vehicles, wind forecast in gigawatt capacity
Slide 15: Favourable Long Term Supply/Demand Profile
Favourable Long Term Supply/Demand Profile DEMAND SUPPLY NdPr Supply & Demand Based on end-use demand from magnets Automotive sector is forecast to Forecast supply gap represents MATERIAL be the primary consumer of ~ 88% of global supply today – INVESTMENT IN NdFeB magnet supply. more than 12 Nolans
Slide 16: Offtake
Offtake Arafura is targeting 85% of planned OFFTAKE DISCUSSION GROUP LOCATION NDPR OXIDE (TPA)2 % OF BINDING OFFTAKE TARGET production1 as binding offtake (Binding SECURED OFFTAKE (BINDING AGREEMENT) Offtake Target). Hyundai & Kia Korea 1,500 40% Offtake strategy aligned with NdFeB Siemens Gamesa RE
Slide 17: Project Funding
Project Funding 19 December 23 17
Slide 18: Funding Structure
Funding Structure Project Offtake drives participation of untied ECA Funding MMI GRANT funding and creates debt liquidity. Requirement MLA financing will have a covered (supported by ECA guarantee) and uncovered portion. Potential strategic investment being negotiated in conjunction with final offta
Slide 19: Indicative Debt Funding
Indicative Debt Funding NAIF and EFA letters of support A$350m of debt AGENCY AMOUNT DESCRIPTION STATUS subject to further DD and credit approval. DEBT FACILITIES Export Development Canada Letter of Interest for US$300m. Export Finance Australia (EFA) A$200m Debt financing Letter of support received
Slide 20: Sources and use of funds
Sources and use of funds Sources of Funds A$m Arafura recently completed early (+) Gross proceeds from the equity raising 20 works construction and is now (+) Cash and cash equivalents (as at 30 November 2023, unaudited) 51 transitioning to a period of lower spend ahead of closing out the (+) Expect
Slide 21: Equity Raising Overview and Timetable
Equity Raising Overview and Timetable Equity raising overview Timetable • Fully underwritten Placement to raise approximately A$20 million via the issue of Event Date approximately 125 million new fully paid ordinary shares (“New Shares”) at A$0.16 per New Share (“Placement Price”). Trading halt and
Slide 22: Sustainability
Sustainability 19 December 23 22
Slide 23: Sustainability activities and initiatives
Sustainability activities and initiatives “ Arafura’s ESG commitment is to be GHG Emissions and Water Management Commitment to Net Zero Annual Update of Sustainability Report Signatory of the UN Global Compact Pending IRMA Member Completed the IRMA Ready assessment and awaiting feedback a trusted gl
Slide 24: Investment Highlights
Investment Highlights EARLY CONSTRUCTION WORKS COMPLETE ✓ Early construction activities completed October 2023 including Raw water storage dam (commissioned), 25km arterial water pipeline (commissioned) between bore field and process plant, site access intersection with Stuart Highway and installati
Slide 25: Appendices
Appendices 19 December 23 25
Slide 26: APPENDIX A: Material Business Risks
APPENDIX A: Material Business Risks Company Specific Risks Communicable disease outbreaks timeframe) on favourable terms or at all. Exploration is a speculative endeavour with an associated risk of discovering or finding NdPr and other products in economic quantities The outbreak of communicable dis
Slide 27: APPENDIX A: Material Business Risks
APPENDIX A: Material Business Risks Company Specific Risks Cont. Volatility of the price of rare earth elements • the representative nature of the samples used for the metallurgical of operations. Damages occurring to third parties as a result of such risks may testwork of the ore that is mined for
Slide 28: APPENDIX A: Material Business Risks
APPENDIX A: Material Business Risks Company Specific Risks Cont. Reserves and resource estimates “Nolans Mineral Leases granted by NT Government” dated 22 July 2020 and processing of Normally Occurring Radioactive Materials (NORM) and the “Mineral Leases granted by NT Government secures Borefield” d
Slide 29: APPENDIX A: Material Business Risks
APPENDIX A: Material Business Risks Company Specific Risks Cont. Title (cont.) authorisations, agreements or licences will be provided to the Group by Such an incident may also have an adverse effect on the Group’s business government bodies, or if they are, that they will be renewed or not revoked
Slide 30: APPENDIX A: Material Business Risks
APPENDIX A: Material Business Risks Company Specific Risks Cont. Climate change risk • Foreign exchange/currency risk: The Group operates internationally and is exposed to foreign exchange risk arising from currency Climate change is a risk the Group has considered, particularly related to exposures
Slide 31: APPENDIX A: Material Business Risks
APPENDIX A: Material Business Risks General Risks General market and economic factors Russia-Ukraine and Israel-Palestine conflict Options Risk The operating and financial performance of the Group is influenced by a number of general economic and business conditions. The ongoing Russian-Ukraine and
Slide 32: APPENDIX B: Offer Jurisdictions
APPENDIX B: Offer Jurisdictions International Offer Restrictions This document does not constitute an offer of new ordinary shares (“New Shares”) and New Options (“New Options”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to a
Slide 33: APPENDIX B: Offer Jurisdictions
APPENDIX B: Offer Jurisdictions Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong
Slide 34: APPENDIX B: Offer Jurisdictions
APPENDIX B: Offer Jurisdictions Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in con
Slide 35: APPENDIX B: Offer Jurisdictions
APPENDIX B: Offer Jurisdictions United Kingdoms Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 20
Slide 36: APPENDIX C: Summary of Underwriting Agreement
APPENDIX C: Summary of Underwriting Agreement The Company has entered into a placement agreement with the Joint Lead of the consolidated assets or earnings of the group becomes insolvent n) any Government Agency holds, or gives notice of intention to hold, a Managers in respect of the management and
Slide 37: APPENDIX C: Summary of Underwriting Agreement
APPENDIX C: Summary of Underwriting Agreement s) the listed "PrND Oxide Pr6O11 25%, Nd 75% EXW China RMB/mt" as Certain termination events noted above (marked with an *) will only entitle a quoted by Asian Metals (www.asianmetal.com) falls to a level that is Joint Lead Manager to exercise its rights
Slide 38: Contact
ASX: ARU Contact Level 6, 432 Murray St Perth WA 6000 PO Box 5773 St Georges Terrace Perth WA 6831 T: +61 8 6370 2800 E: arafura@arultd.com (All corporate and general enquiries) E: nolansproject@arultd.com (Nolans Project enquiries only)
Arafura Rare Earths — Investor Presentation (December 2023) on 6ix