Arafura Resources : $2.1 Million Tax Refund for R&D Spend

ASX Announcement

Arafura Receives $2.1 Million Tax Refund For R&D Spend

18 October 2018

•  Refundable tax offset of A$2.1 million received

•  Further reinforces the Australian Government's strong support for the Nolans Project

Arafura Resources Limited (ASX: ARU) ("Arafura" or "the Company") is pleased to advise it has received A$2.1 million as a refundable tax offset for eligible research and development (R&D) expenditure relating to the development of its 100 per cent‐owned Nolans Neodymium‐Praseodymium (NdPr) project in the Northern Territory.

The R&D Tax Incentive program is jointly administered by the Australian Government's Innovation and Science Australia and the Australian Taxation Office. It is a targeted program that helps businesses offset a portion of costs relating to eligible R&D activities and innovation, and in Arafura's case it included costs incurred in the design and operation of its flowsheet piloting program during FY2018.

The Company plans to use these funds to support the completion of the Nolans Definitive Feasibility Study currently in progress.

Arafura's total cash receipts from the R&D tax incentive now amount to A$39.1 million.

The continued eligibility of Nolans for the R&D Tax Incentive program, together with the ongoing support of the Australian and Northern Territory governments through the granting of Major Project Status, highlights the strategic and advanced nature of the project, and its potential net economic benefit to regional Australia.

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For further information contact: Media enquiries:

Gavin Lockyer Luke Forrestal

Managing Director T: [phone]

Media and Capital Partners M: [phone]

Arafura Resources Limited ABN: 22 080 933 455

Level 3, 263 Adelaide Terrace, Perth WA 6000 PO Box 5773, St Georges Terrace, Perth WA 6831

T: [phone] W:www.arultd.com E:[e-mail]