Insights

Arafura (ASX:ARU) share price frozen ahead of capital raising

Arafura is in a trading halt until Thursday. We take a closer look.
The post Arafura (ASX:ARU) share price frozen ahead of capital raising appeared first on The Motley Fool Australia. –

Trading in Arafura Resources Limited (ASX: ARU) shares has been halted following the announcement of a capital raise. The Arafura share price is currently frozen at Monday’s closing price of 16.5 cents.

The company’s ASX announcement yesterday did not go into any detail regarding the capital raising, but according to the Australian Financial Review (AFR), Arafura is seeking $40 million to shore up its engineering investment and provide extra capital. 

The AFR report said Arafura was offering shareholders 12 cents a share — a 29% discount on the price that the company shares closed at on Monday. The company is expected to resume normal trading on Thursday.

More capital?

The capital raising is in addition to Arafura’s announcement last week that it had received a letter of support from the Northern Australia Infrastructure Facility (NAIF) to a potential debt facility worth up to $100 million.

The company said the facility would be over a 15-year term and formed part of the funding package for its Nolans Rare Earth Project in the Northern Territory.

The Nolans mine is Arafura’s main project and focuses on neodymium-praseodymium (NdPr), a substance required in electric vehicles.

In an announcement in May, the company advised its feasibility study found Nolans “has a mine life of 38 years and the ability to produce 4,440 tonnes of NdPr oxide each year”. Arafura expects earnings before interest, tax, depreciation, and amortisation (EBITDA) for the Nolans project to be $354 million a year.

It was reported in the AFR that the rare earths company would be able to supply 5% to 10% of the world’s magnet supply.

Arafura share price snapshot

Arafura has had a great year. The Arafura share price is up 183% over the last 12 months while the Australian metals and mining industry is up 25% over the same period. Its share price has lifted more than 30% since January alone.

The company has a market capitalisation of $193 million.

The post Arafura (ASX:ARU) share price frozen ahead of capital raising appeared first on The Motley Fool Australia.

Should you invest $1,000 in Arafura Resources right now?

Before you consider Arafura Resources, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Arafura Resources wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

Why Moderna stock jumped 6% Tuesday

Why are Soul Patts (ASX:SOL) shares surging 9% today?
CSL (ASX:CSL) share price falls on broker downgrade
Is the Wesfarmers (ASX:WES) share price a buy today?
Why the Wisr (ASX:WZR) share price is edging higher today

Frank Tzimas has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!