Arafura Rare Earths Limited provided a Project Update for its 100%-owned Nolans Neodymium-Praseodymium (NdPr) Project (Nolans) in the Northern Territory. This update follows the recent execution of a binding offtake agreement with Hyundai Motor Company and Kia Corporation and strong progress with other prospective offtake partners, including GE Renewable Energy. This announcement also outlines the ongoing positive progress on project financing and updates the findings of the 2021 Feasibility Study Update.

In parallel with offtake and funding activities, the Company has completed significant work to finalise the project definition and provide cost certainty of project outcomes, including: Front-end engineering and design (FEED) works on the hydrometallurgical plant with Hatch appointed in August 2021, together with significant equipment procurement and pre-payments for certified vendor data. Tendering of the hydrometallurgical plant construction contract to two Tier One Australian construction contractors. Completion of updated beneficiation engineering study by GR Engineering Services.

Tendering and FEED engineering for the sulphuric acid plant. Significant progress on the design of the non-process infrastructure (NPI) including earthworks, village, and borefields, followed by tendering of key contracts associated with early works construction activities. Tendering of key operational contracts, including power station, operational logistics and village operations, ready for execution.

Continuation of minor metallurgical test work to support the detailed design. Finalisation and submission of the Project's Mine Management Plan for approval of the Authority to Mine from the Northern Territory Government. The updated cost estimates and financial outcomes reported in this announcement, which are based on the previously announced Mineral Resources, Ore Reserves, and production scheduling, will now form the basis of discussions to finalise funding for Nolans, with Arafura targeting long-lead equipment procurement in early 2023, Final Investment Decision (FID) in March 2023 and Financial Close in mid-2023.

During November, SRK Consulting Limited, who were appointed to complete an independent technical review and provide input to the financier's due diligence, provided the mandated lead debt arrangers, Société Générale and National Australia Bank, with their report. This report, together with the economic modelling of the project, allows lenders to assess the credit worthiness of the project and the quantum of debt it can sustain. The Company has confidence in its risk assessment process given no new material risks have been identified in the report that were previously unanticipated by the Company as part of its risk review and mitigation process.

These updated costings will now be incorporated into the Project Financing process.