Interview: Arafura Resources on the path to becoming one of the next major suppliers of rare earths
Tracy Weslosky, Publisher and Editor-in-Chief of InvestorIntel interviews Gavin Lockyer, Managing Director for Arafura Resources, Ltd. (“Arafura”) (ASX: ARU), an Australian company with a world-class Rare Earths project – the Nolans Project. Probable Reserves are listed at 672,000 tonnes of TREO – projected to support a 22 year mine life; potential to extend the life of mine is provided by Inferred Resources that total 511,000 tonnes of TREO. The Nolans Project is one of the world’s most advanced rare earths development projects, with a Base Case established and a Feasibility Study in progress. Management believes this project has the potential to supply 10% of the world’s rare earth demand. Construction is anticipated to commence during the 2015-16 timeframe.
Mentioning that both she and Jack Lifton foresee “a lift in Rare Earth pricing” in the near future, she asks Gavin what he sees taking place in the industry as a whole.
“I think the Chinese are becoming bigger and bigger users…and I would expect rare earth prices to increase generally, because of supply restrictions. Simply, because there is no extra supply coming on board. We are seeing Moly and Lynas coming on board, which is great for the industry, but demand seems to be outstripping that in all fields. And that’s across the spectrum – lights, mediums and heavies.”
While acknowledging that skeptics would accuse him (in so many words) of “talking his game” about the increasingly positive pricing environment because he intends to become a producer, “the reality is that I’m talking to you now by Skype, and this simply would not be possible without rare earths (which is) becoming more and more common and accepted in everyday life.”
Gavin continues, “Supply is becoming a really, really big issue. Until the rest of the world realizes this – and I hope the investment community realizes it very soon. These are big CAPEX projects and they require funding.”
Gavin notes that Japan has been stockpiling REEs for some time, but you can’t continue to stockpile when they’re (the Chinese) are not exporting.”
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Tracy thanks Gavin “for reinforcing what we keep saying here on InvestorIntel – which is that the demand will continue to increase – and of course Arafura is on the race to production.” She asks Gavin for “a final note on the company’s timeline for producing.”
He responded that 2014 will be a year of consolidation for operations, with Arafura looking at optimizing their Chinese work streams, getting their CAPEX/OPEX down, and hopefully by the middle of next year to have in hand an Information Memorandum in order to reach out to project financiers “to start seriously to talk about building, constructing and getting into production.”
“…I’m really hoping that by the end of 2016 – early 17, we are pushing the button and actually becoming one of the next major suppliers of rare earths.”
You can learn more about Arafura, by going to their website at ArafuraResources.com.au.
Disclaimer: Arafura Resources is an advertorial member of InvestorIntel.
An accomplished entrepreneur and corporate finance professional, Tracy Weslosky is the CEO for InvestorIntel Corp. and the VP of Business Development for Bellotti Capital Partners ... <Read more about Tracy Weslosky>