Arafura shares soar on fresh Nolans offtake deal
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The news: Shares in Arafura Rare Earths rocketed after the Gina Rinehart-backed miner signed an offtake agreement with European mining group Traxys for the sale of neodymium-praseodymium (NdPr) oxide from its Nolans Project in the Northern Territory.
The numbers: Arafura shares were up 12.2% to 20.8 cents at 1:30pm AEDT, extending gains of around 80% since the turn of the year.
Arafura will supply Traxys with a minimum of 100 tonnes — and a maximum of 300 tonnes — of rare earth elements NdPr oxide each year over a five-year term.
The miner said the agreement helps it towards its binding offtake target of 80% of Nolans' annual name plate capacity of 4,440 tonnes per year. The Traxys offtake volume represents up to 8% of this target.
The context: The deal follows separate offtake agreements with Hyundai and Kia in South Korea and Siemens Gamesa in Germany.
Afura said that Luxembourg-based Traxys — a physical commodity trader and merchant in the metals and natural resources sectors — will help it access companies in the magnet supply chain that might otherwise be unable to commit to long-term offtake commitments.
What they said: "This agreement with Traxys moves us closer to achieving our offtake target of 80%," said Arafura's managing director Darryl Cuzzubbo.
"With on 34% of the product from Nolans remaining to be marketed our ongoing negotiations means we are well-positioned to reach this target," he said.
The source: ASX
