- Arafura Resources (ARU) shares are trading in the red after raising $40 million from institutional investors who were offered shares at close to a 30 per cent discount
- The company says it received strong support from international and domestic institutional investors
- Funds are set to go towards Front End Engineering and Design and its Nolans Project in the Northern Territory
- A final investment decision for the project is said to be on track for the second half of 2022
- Arafura Resources shares are down 20.6 per cent and trading at 13.5 cents
Arafura Resources (ARU) shares are trading in the red after raising $40 million from institutional investors who were offered shares at close to a 30 per cent discount.
The rare earths company said it had received “strong support” from international and domestic institutional investors through a share placement and associated share purchase plan.
Ararfura said proceeds from the fundraise would strengthen its cash position and commencement on Front End Engineering and Design (FEED) at the Nolans Project in the Northern Territory.
The company estimates the FEED will take approximately a year to complete, with a final investment decision said to be “on track” for the second half of 2022.
Shares were offered up at $0.12 under the placement, marking a 29.4 per cent discount on ARU’s last closing price.
A total of 333,333,334 Arafura shares are set to be issued across two tranches, settling around July 2 and August 13, respectively.
In addition, the company hopes to raise a further $5 million via a share purchase plan at $0.12 per new share, with proceeds also set to go towards Nolans and working capital.
Arafura’s Managing Director, Gavin Lockyer, said he was delighted with the support for the placement.
Arafura Resources shares were down 20.6 per cent to trade at 13.5 cents at 12:56 pm AEST.