PERTH (miningweekly.com) – ASX-listed Arafura Resources is reviewing the project schedule for its Nolans neodymium-praseodymium (NdPr) project, in the Northern Territory, after taking the decision to modify the project’s execution strategy to a traditional front-end engineering design (FEED) model.
Arafura this week told shareholders that the integrated project management team has continued to work across several fronts in preparation for project delivery, including reviewing the execution strategy to incorporate feedback from potential contracting and financing partners.
This consultation, combined with the increasingly positive outlook for NdPr pricing and the traction being gained in offtake discussions, has given the company the confidence to modify the execution strategy, Arafura said.
The company said this week that the FEED process would split the engineering and construction contracts to bring in additional contractors for both packages and resulting in a more competitive tendering process, and would reduce the risk for the construction contractors, thereby reducing contingency and risk premiums.
The company noted that advanced design, procurement and tendering at the final investment decision (FID) would also deliver a high level of cost certainty for the project, which would improve the confidence of project financiers.
Arafura told shareholders that the change in contracting strategy would result in an additional six-month prior to FID and an extension of the construction schedule by two months.
Meanwhile, Arafura has also taken the decision to delay the production of cerium from the Nolans project, based on the current spot price and flowsheet, saying that cerium production would deliver limited value to the project.
Cerium production would only commence once commissioning of the Nolans processing plant is complete and production has ramped up to full capacity.
Deferring cerium production would allow Arafura to focus on the production of on-specification NdPr oxide, which is a higher value product and represents around 95% of rare earth revenue.