Rinehart-backed Arafura launches cash call, two brokers on ticket
Rare earths hopeful Arafura, which secured backing from Gina Rinehart’s Hancock Prospecting exactly one year ago, is seeking $20 million in fresh funds.
Arafura managing director Gavin Lockyer. Trevor Collens
Street Talk understands the $410 million company, which has a binding off-take deal in place with carmakers Kia and Hyundai, has hired Canaccord Genuity and UBS to oversee the deal.
The raise was structured as an underwritten placement to raise $20 million from institutional investors and a share purchase plan to raise an additional $10 million. New shares are priced at 16¢ per share – a 20 per cent discount to the last traded price, according to a term sheet seen by Street Talk.
Potential investors were told they’d receive one free option for every two new shares subscribed for. Proceeds will be used for continued development of Arafura’s flagship rare earths project Nolans – project management team costs, site overheads and sourcing vendor data for equipment.
As of Wednesday evening, it was unclear if Rinehart planned to participate in the deal.
The miner last raised $120 million from investors last December to keep its Nolans project in the Northern Territory ticking along.
Arafura Rare Earths shares were placed in a trading halt on Wednesday. Final bids were called by 7 pm.
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