Australia's Arafura Rare Earths has raised about A$80-million through a two-tranche institutional placement, as the company moves closer to a final investment decision (FID) for its Nolans rare earths project in the Northern Territory.

The placement, priced at A$0.19 a share, will result in the issue of about 421.1-million new fully paid ordinary shares. In addition, Arafura will launch a share purchase plan (SPP) targeting A$5-million, also at A$0.19 a share. If fully subscribed, the two transactions are expected to bring in about A$85-million before costs.

MD Darryl Cuzzubbo said the capital raising represented a milestone in the company’s funding strategy. “This inbound-led placement partially de-risks the final equity raise while also enhancing the company’s negotiating leverage as we look to close out discussions with a range of potential strategic equity partners and deliver on the equity funding strategy,” he said.

“Arafura has taken the opportunity to expand its register ahead of an FID with strong demand from high-quality new and existing institutional investors. The interest is a testament to the high-quality nature of the Nolans rare earth project and the significant work undertaken by the company to advance and de-risk its development,” Cuzzubbo added.

The majority of proceeds will go towards accelerating main construction at Nolans once a positive FID is taken. “Whilst this placement strengthens our balance sheet, the majority of proceeds will be used to accelerate main construction at FID,” he said.

Cuzzubbo also pointed to favourable market dynamics. “In addition, the strong tailwinds for Western supply of rare earths, highlighted by MP Materials recent partnership with the US Department of Defense, gives Arafura confidence that it can finalise its equity funding package in a timely and attractive manner.”

The SPP, opening on August 27, will allow eligible existing shareholders to participate on the same terms as institutional investors. “We are also pleased to offer our existing eligible shareholders the opportunity to participate in this equity raising via the SPP, which is expected to open on Wednesday, 27 August 2025,” Cuzzubbo said.

Proceeds from the capital raising, together with existing cash, will provide an extended cash runway and support project development capital upon FID, alongside corporate, working capital and transaction costs.