Arafura Rare Earths Limited Launches AU$475 Million Capital Raise

Highlights:

• Arafura Rare Earths Limited (ASX: ARU) has launched a AU$475 million two-tranche institutional placement and a AU$50 million share purchase plan (SPP) to support funding for its Nolans Rare Earths Project.
• Hancock Prospecting committed AU$125 million to the placement, increasing its stake in Arafura to approximately 15.7% upon completion.
• At the time of writing, Arafura’s shares were trading near AU$0.28, and the company’s pro forma cash balance is expected to reach AU$584 million, significantly de-risking total project funding ahead of its Q1 2026 Final Investment Decision (FID).

Major Capital Raise to Strengthen Project Funding

Arafura Rare Earths Limited (ASX: ARU) has announced a two-tranche institutional placement worth approximately AU$475 million, alongside a AU$50 million share purchase plan (SPP) for eligible investors. This marks a significant milestone in securing funding for the company’s flagship Nolans Rare Earths Project in the Northern Territory.

Under the placement, new fully paid ordinary shares will be issued at AU$0.28 per share, with Tranche One expected to raise around AU$123.4 million and Tranche Two—subject to shareholder approval—raising an additional AU$351.6 million. At the time of writing, Arafura’s shares were trading near AU$0.28, reflecting the offer price.

Hancock Prospecting Commits AU$125 Million

Arafura’s largest shareholder, Hancock Prospecting Pty Ltd, has committed AU$125 million to the placement, acquiring roughly 446.4 million new shares. Following completion, Hancock’s stake in the company will rise to approximately 15.7%. Excluding Hancock’s commitment, the placement is fully underwritten, with Barrenjoey Markets Pty Ltd and Canaccord Genuity (Australia) Limited acting as joint lead managers and underwriters.

Strengthening Financial Position and Strategic Support

Upon completion, Arafura’s pro forma cash balance (as of September 30, 2025) is expected to reach approximately AU$584 million, bolstering its ability to advance the Nolans Project toward a Final Investment Decision (FID) targeted for the first quarter of 2026. The capital raise follows the recent US–Australia Framework for Securing Supply of Critical Minerals and Rare Earths, under which Export Finance Australia has provided conditional approval for an equity investment of up to US$100 million. This, combined with government-backed debt facilities and cornerstone equity commitments, positions Arafura to de-risk its total funding needs.

A Step Closer to a Western Rare Earths Supply Chain

Managing Director Darryl Cuzzubbo said the raise represents a “transformational milestone” for Arafura as it progresses toward construction. The funds will primarily be used for Nolans Project capital costs, financing, and working capital, reinforcing Arafura’s role in establishing a sustainable Western rare earths supply chain at a strategically important time for global energy transition markets.

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