Q4 2026 Arafura Rare Earths Ltd Earnings Call

September 4, 2026

Speaker #2: One.

Speaker #3: Are you introducing yourself, or do we just kick it off?

Darryl Cuzzubbo: You introducing us, Darcy, or do we just kick it off?

Darryl Cuzzubbo: You introducing us, Darcy, or do we just kick it off? Okay. Good morning, everyone, and thank you again for joining us for today's update. I am Darryl Cuzzubbo, Arafura's Managing Director, and with me today is Peter Sherrington, who has been our CFO, and Tommie van der Walt, our Chief Projects Officer. I would also like to give a warm welcome to our new CFO, Angela Bigg, who started in the role just a few days ago.

Speaker #2: Yep.

Tommie van der Walt: Yep.

Speaker #3: Okay. Good morning, everyone, and thank you again for joining us for today's update. I'm Darryl Kazuba, Arafura's Managing Director, and with me today are Peter Sherrington, who has been our CFO, and Tommy Vandevelde, our Chief Project Officer.

Darryl Cuzzubbo: Okay. Good morning, everyone, and thank you again for joining us for today's update. I am Darryl Cuzzubbo, Arafura's managing director, and with me today is Peter Sherrington, who has been our CFO, and Tommie van der Walt, our Chief Projects Officer. I would also like to give a warm welcome to our new CFO, Angela Bigg, who started in the role just a few days ago. A little bit about Angela. Angela brings more than 20 years of experience in the global mining sector across both executive finance and executive operational roles, including being President and Chief Operation Officer of the Rio Tinto Diavik Diamond Mine in Canada. This mix of multi-jurisdictional corporate finance experience and hands-on operational leadership gives her a really unique perspective and puts her in a great position to help us take the company from construction through into operations.

Speaker #3: I'd also like to give a warm welcome to our new CFO, Angela Bigg, who started in the role just a few days ago. We'll look a little bit at Angela.

Darryl Cuzzubbo: A little bit about Angela. Angela brings more than 20 years of experience in the global mining sector across both executive finance and executive operational roles, including being President and Chief Operation Officer of the Rio Tinto Diavik Diamond Mine in Canada. This mix of multi-jurisdictional corporate finance experience and hands-on operational leadership gives her a really unique perspective and puts her in a great position to help us take the company from construction through into operations.

Speaker #3: Angela brings more than 20 years of experience in the global mining sector across both executive, finance, and operational roles, including being President and Chief Operating Officer of Rio Tinto Diamonds & Minerals Canada.

Speaker #3: This mix of multi-jurisdictional corporate finance experience and hands-on operational leadership gives her a really unique perspective and puts her in a great position to help us take the company from construction through into operations.

Speaker #3: I might just hand over to you, Angela, for a bit of an introduction.

Darryl Cuzzubbo: I might just hand over to you, Angela, for a bit of an introduction.

Speaker #4: Thank you, Darryl, and good morning. I'm really excited to be starting with Arafura and to be able to participate in a project of this nature and at this stage of its development.

Angela Bigg: Thank you, Daryl, and good morning. I am really excited to be starting with Arafura and be able to participate in a project of this nature and at this stage of its development. I also have a slightly unique perspective being a Northern Territorian myself, and being able to be involved in something like this is something I am really pleased about.

Speaker #4: I also have a slightly unique perspective, being a Northern Territorian myself, and being able to be involved in something like this is something I'm really pleased about.

Speaker #3: Thanks, Angela. So let me walk you through what we'll cover today. As we've done in previous updates, we'll go through a market overview, a summary of what we've achieved over the past year, then provide you an update on the financials for the year, plus where we're at on financial close and off-takes, and Tommy will update you on construction progress.

Darryl Cuzzubbo: Thanks, Angela. Let me walk you through what we will cover today. As we have done in the previous updates, we will go through a market overview, a summary of what we have achieved over the past year. Peter will then provide you an update on the financials for the year, plus where we are at on financial close in Nolans, and Tommy will update you on construction progress. Before we open up for Q&A, I just want to take a moment to thank Peter, given that this will be his last shareholder update with us. Let us start with the market overview. Looking back over the last 12 months, it has been a significant one. We have seen a sustained lift in pricing. NdPr started the year around US$62 a kilo, peaked at US$129, and currently sits around US$107 a kilo.

Speaker #3: And before we open up for Q&A, I just want to take a moment to thank Peter, given that this will be his last shareholder update with us.

Speaker #3: So, let's start with the market overview. Looking back over the last 12 months, it's been a significant period. We've seen a sustained lift in pricing.

Speaker #3: NDPR started the year around US$62 a kilo, peaked at US$129, and currently sits around US$107 a kilo. At the same time, the US and Japan introduced price floors of US$110, and that actually has had a stabilizing effect on Chinese domestic pricing, where it has basically stayed range-bound between US$100 and US$120 a kilo. This really shows how effective these price floors have been.

Darryl Cuzzubbo: At the same time, the US and Japan introduced pricing floors of US$110, and that actually has had a stabilizing effect on Chinese domestic pricing, where it has basically stayed range-bound between US$100 and US$120 a kilo, which really shows how effective these price floors have been. We have also seen two new independent and transparent pricing indices emerge over this period, being the Benchmark Mineral Intelligence and S&P Global Platts Index. This matters because China's domestic rare earth pricing is not transparent. The constituent weights and trading volumes simply are not disclosed. Frankly, it is more of a policy instrument than a reliable market signal. A few other events are worthy to call out from the past year. China added MP Materials and USA Rare Earth, the two companies most directly backed by the US government to compete with Chinese supply, to its Export Control List back in June.

Speaker #3: We've also seen two new independent and transparent pricing indices emerge over this period, being the Benchmark Minerals Intelligence and S&P Platts index. This matters because China's domestic rare earth pricing isn't transparent.

Speaker #3: The constituent weights and trading volumes simply aren't disclosed. So, frankly, it's more of a policy instrument than a reliable market signal. A few other events that are worthy to call out from the past year.

Speaker #3: China added MP Materials and USA Rare Earth—the two companies most directly backed by the US government to compete with Chinese supply—to its export control energy list back in June.

Speaker #3: China also effectively embargoed dysprosium, terbium, and yttrium exports to Japan. Zero exports of those elements were recorded in June, and that's created a supply crisis for Japanese magnet manufacturers.

Darryl Cuzzubbo: China also effectively embargoed dysprosium, terbium, and yttrium exports to Japan. Zero exports of those elements were recorded in June, and that has created a supply crisis for Japanese magnet manufacturers. More recently, the G7 Leaders' Statement on Economic Resilience and Economic Security elevated rare earths from simply being an industrial input to being an economic security priority, with a real focus on standards-based markets, transparent supply chains, strategic stockpiling, and building processing capacity among partner nations. China also added 14 EU entities to its Export Control List, meaning overseas organizations or individuals can now be penalized for supplying Chinese rare earth materials to anyone on that list. Looking ahead, it is worth remembering that the moratorium on export controls for rare earths between China and the US expires on 10 November.

Speaker #3: More recently, the G7 leaders' declaration elevated rare earths from simply being an industrial input to being an economic security priority, with a real focus on standards-based markets, transparent supply chains, strategic stockpiling, and building processing capacity among partner nations.

Speaker #3: China also added 14 EU entities to its export control list, meaning overseas organizations or individuals can now be penalized for supplying Chinese rare earth materials to anyone on that list.

Speaker #3: And looking ahead, it's worth remembering that the moratorium on export controls for rare earths between China and the US expires on November 10.

Speaker #3: If I had to sum up the past year, there's been a lot of activity building out a rest-of-world rare earth supply chain, but structurally, China is still very much in control, and that's not going to change quickly.

Darryl Cuzzubbo: If I had to sum up the past year, there's been a lot of activity building out a rest of world's rare earth supply chain, but structurally, China is still very much in control, and that's not going to change quickly. It took China three decades to build that dominance, so it's going to take more than a couple of years to establish a reliable, cost-effective alternative. Even though metallization, separation, magnet manufacturing capacity might take two to three years to build out, you cannot turn on a new mine supply nearly that fast. It typically takes 18 years to find and bring a new mine into commercial production. That's exactly what makes Arafura's move into construction on the Nolans ore-to-oxide project the right strategy at the right time.

Speaker #3: It took China three decades to build that dominance, so it's going to take more than a couple of years to establish a reliable, cost-effective alternative.

Speaker #3: And even though metallization, separation, and magnet manufacturing capacity might take two to three years to build out, you cannot turn on new mine supply nearly that fast.

Speaker #3: It typically takes 18 years to find and bring a new mine into commercial production, and that's exactly what makes Arafura's move into construction on the Nolans ore-to-oxide project the right strategy at the right time.

Speaker #3: It has taken us years of work to get into this position, and it's a genuinely advantageous one, both for us and our shareholders. I can now turn to what we've achieved over the last 12 months.

Darryl Cuzzubbo: It has taken us years of work to get into this position, and it's a genuinely advantageous one, both for us and our shareholders. I can now turn to what we've achieved over the last 12 months. It's been an incredibly busy but productive year. We pulled together everything needed on offtake and funding to reach FID, all while competing for attention and support against a lot of other critical minerals projects around the world. I'd argue that no other project globally has garnered more support than we have. We've secured offtakes into five countries. We've secured ECA-covered debt from five countries. We were the first project to receive equity from EFA, the second and the largest from the National Reconstruction Fund, and only the second in the world to receive equity from the German Raw Materials Fund, with the first project being a project based in Germany.

Speaker #3: It's been an incredibly busy but productive year. We pulled together everything needed on off-take and funding to reach FID, all while competing for attention and support against a lot of other critical minerals projects around the world.

Speaker #3: And I'd argue that no other project globally has garnered more support than we have. We've secured off-takes into five countries. We've secured ECA-covered debt from five countries, and we were the first project to receive equity from EFA.

Speaker #3: This is the second, and the largest, investment from the National Reconstruction Fund, and only the second in the world to receive equity from the German Raw Materials Fund, with the first project being a project based in Germany.

Speaker #3: So let me run through some more specific highlights. In terms of government support, we were named one of two priority projects under the US-Australia Critical Minerals Framework Agreement, announced by Prime Minister Albanese and President Trump last October.

Darryl Cuzzubbo: Let me run through some more specific highlights. In terms of government support, we were named one of two priority projects under the United States–Australia Critical Minerals Framework Agreement announced by Prime Minister Albanese and President Trump last October. As part of that, we secured a $300 million US letter of support from US EXIM. In terms of offtakes, we secured an offtake with US-based Traxys, the first on an independent transparent price index. We also received further support from the Australian government, becoming the first company to receive an offtake letter of support under the new Critical Minerals Strategic Reserve. We achieved a binding offtake term sheet with an Indian party, again on an independent transparent index.

Speaker #3: As part of that, we secured a $300 million letter of support from US Exxon. In terms of off-takes, we secured an off-take with US-based TRAXIS, the first on an independent, transparent price index.

Speaker #3: We also received further support from the Australian government, becoming the first company to receive an off-take letter of support under the new Critical Minerals Strategic Reserve.

Speaker #3: And we achieved a binding offtake term sheet with an Indian party, again on an independent, transparent index. Our consistent push for an independent, transparent pricing is really paying off, and it matters because we want our investors to have confidence that pricing will reflect market fundamentals, just like it does for any other commodity.

Darryl Cuzzubbo: Our consistent push for an independent, transparent pricing is really paying off, and it matters because we want our investors to have confidence that pricing will reflect market fundamentals just like it does for any other commodity. From an equity perspective, we raised over the required AUD 900 million in equity, with further support to be added to that from NRF, EFA, and German Raw Materials Fund. I do want to specifically call out Hancock, who took a risk on us early, and honestly, we wouldn't be where we are today without them. It was on the back of all of that we were able to make our final investment decision a few months ago in May. Just lastly, on project readiness, we engaged Hatch as our EPCM contract at the end of last calendar year. We fully established our owners' team.

Speaker #3: From an equity perspective, we raised over the required $900 million in equity, with further support to be added from NRF, EFA, and the German Raw Materials Fund.

Speaker #3: I do want to specifically call out Hancock, who took a risk on us early, and honestly, we wouldn't be where we are today without them.

Speaker #3: It was on the back of all of that that we were able to make a final investment decision a few months ago, in May. And just lastly, on project readiness, we engaged Hatch as our EPCM contractor at the end of last calendar year.

Speaker #3: We fully established our owners' team and are very happy with the caliber that we've been able to attract. We signed a compensation deed with our pastoralists, which included him becoming an Arafura shareholder.

Darryl Cuzzubbo: We are very happy with the caliber that we have been able to attract. We signed a compensation deed with our pastoralist, which included him becoming an Arafura shareholder. We signed a Territory Benefits Plan with the Northern Territory Chief Minister, and we were nominated as the first significant project by the NT government. Looking back on the last 12 months, it has been an incredibly busy year, but an incredibly rewarding one as we take the company from development into construction of what will be Australia's only ore-to-oxide rare earth mine and process plant. On that, Peter, I might hand over to you for your update.

Speaker #3: We signed a Territory Benefits Plan with the Northern Territory Chief Minister, and we were nominated as the first significant project by the NT Government.

Speaker #3: So, looking back on the last 12 months, it's been an incredibly busy year, but an incredibly rewarding one, as we take the company from development into construction of what will be Australia's only ore-to-oxide rare earth mine and process plant.

Speaker #3: On that, Peter, I might hand over to you for your update.

Speaker #1: Thanks, Darryl. I'd like to start by outlining our cash position and the equity placements completed during the year. During the year, the company raised over $930 million through three private placements, as well as shareholder purchase plans—including the second tranche of the May placement of $186 million, which actually settled after the year-end.

Peter Sherrington: Thanks, Darryl. I would like to start by outlining our cash position and the equity placements completed during the year. During the year, the company raised over AUD 930 million through three private placements and also shareholder purchase plans, including the second tranche of the May placement of AUD 186 million that actually settled after the year-end. At year-end, the company held cash and term deposits of AUD 723 million, including the second tranche that settled in July. On a pro forma basis, the company would have held cash of greater than AUD 900 million. As a shareholder and the CFO, I am sympathetic to the impact of private placements, but these capital raisings have been significant in securing the equity that is required to fund the development of the Nolans project.

Speaker #1: At year-end, the company held cash in term deposits of $723 million, including the second tranche that settled in July. On a pro forma basis, the company would have held cash of greater than $900 million.

Speaker #1: As a shareholder and the CFO, I'm sympathetic to the impact of private placements, but these capital raisings have been significant. In securing the equity required to fund the development of the Nolans project, the Arafura team has been mindful of the size of the equity required to execute the Nolans project and has been careful to target raising funds around geopolitical events that have driven share price, as well as project development milestones.

Peter Sherrington: The Arafura team have been mindful of the size of the equity required to execute the Nolans project, and have been mindful to target raising funds on geopolitical events that have driven share price and also project development milestones. Just turning to the project financing. Key project finance agreements, including the common terms deed, facility agreements, and the credit-run security deeds and other ancillary documentation are all extremely well advanced at a stage ready for execution with the lenders. All lenders' credit approvals remain current. A small number of lenders require final credit approval in order to move to contractual close. The company envisages these approvals will be completed later this month. Off-take has been a priority and during the period, as Darryl summarized in his opening, the company has announced two binding off-take term sheets during the year, one with Traxys North America for 500 tonnes of NdPr.

Speaker #1: Just turning to the project financing, key project finance agreements, including the common terms, the facility agreements, intercreditor and security deeds, and other ancillary documentation, are all extremely well advanced and at a stage ready for execution with the lenders.

Speaker #1: All lenders' credit approvals remain current. A small number of lenders require final credit approval in order to move to contractual close. The company envisages these approvals will be completed later this month.

Speaker #1: Off-takes being a priority, and during the period, as Darryl summarised in his opening, the company has announced two binding off-take term sheets during the year: one with TRAXIS North America for 500 tons of NdPr, and in addition to that, 700 tons of Dy and Tb, which were our first heavy rare earth oxides that had been contracted.

Peter Sherrington: In addition to that, 700 tonnes of Dy and Tb, which were our first heavy rare earth oxides that have been contracted. Following that, we reached a term sheet with an Indian group for an additional 500 tonnes of NdPr and also for seven tonnes per annum of DyTb. Traxys is a significant global trader of specialty minerals, and Arafura is pleased to extend this strategic relationship with Traxys, through the Traxys North American office off-take, alongside the existing agreement with Traxys Europe. The Indian government currently have a specific program running to bolster their processing of metallization and magnets within India to complement its growing automotive manufacturing.

Speaker #1: Following that, we reached a term sheet with an Indian group for an additional 500 tons of NdPr and also for 7 tons per annum of Dy and Tb.

Speaker #1: TRAXIS is a significant global trader of specialty minerals, and Arafura is pleased to extend this strategic relationship with TRAXIS through the TRAXIS North American office, with off-take alongside the existing agreement with TRAXIS Europe.

Speaker #1: The Indian government currently has a specific program running to bolster their processing of metallisation and magnets within India, to complement its growing automotive manufacturing.

Speaker #1: Arafura engaged with numerous groups looking to participate in the Indian rare earth permanent magnet programs. And had been selected looking to collaborate with a group that it believes is well place to play a key role.

Peter Sherrington: Arafura engaged with numerous groups looking to participate in the Indian rare earth permanent magnet programs and has been selected to look into collaborating with a group that it believes is well-placed to play a key role and is aligned with Arafura's objectives, in relation to rare earths markets. The Traxys and Indian counterparty term sheets have pricing mechanisms that are referenced to global seaborne index prices for NdPr oxides. The introduction of the US and Japan floor prices place greater focus on new rare earth magnet feed price mechanisms, deviating from the conventional industry practice of referencing the China domestic price. Arafura is working to incorporate alternative pricing mechanisms into other off-take arrangements currently being negotiated, but this has been a significant outcome that we've worked hard to achieve.

Speaker #1: And is aligned with Arafura's objectives in relation to rare earths markets. The TRAXYS and Indian counterparty term sheets have pricing mechanisms that are referenced to global SMM index prices for NdPr oxides.

Speaker #1: The introduction of the US and Japan floor prices placed greater focus on new rare earth magnet fee price mechanisms, deviating from the conventional industry practice of referencing the China domestic price.

Speaker #1: Arafura is working to incorporate alternate pricing mechanisms into other off-take arrangements currently being negotiated, but this has been a significant outcome that we've worked hard to achieve.

Speaker #1: In addition to the TRAXYS and Indian off-take, in May last year and in May of this year, 2026, Arafura announced it had received a non-binding letter of support from EFA, with potential support under the Critical Minerals Strategic Reserve.

Peter Sherrington: In addition to the Traxys and Indian off-take, in May 2026, Arafura announced it had received a non-binding letter of support from MFA attempting to support under Critical Minerals Strategic Reserve. Daryl's already discussed this, and of course, we continue to work with the Australian government with regards to the letter of support as it relates to potential 500 tonnes per annum of off-take support. I'll close out by addressing strategic investments and contractual close on the project financing. In May 2026, the company and NRF executed long-form documentation in relation to the previously announced AUD 200 million of convertible notes. Arafura will seek to draw down the convertible notes based on its capital expenditure profile, after construction commences.

Speaker #1: Darryl's already discussed this, and of course we continue to work with the Australian government with regard to the letter of support as it relates to the potential 500 tons per annum of off-take support.

Speaker #1: I'll close out by addressing strategic investments and contractual close on the project financing. In May 2026, the company and NROC executed long-form documentation in relation to the previously announced AU$200 million of convertible notes.

Speaker #1: Arafura will seek to draw down the convertible notes based on its capital expenditure profile after construction commences. In March 2026, Arafura entered into binding subscription agreements for a total of AUD $230 million with KfW on behalf of the German Raw Materials Fund and Export Finance Australia.

Peter Sherrington: In March 2026, Arafura entered into binding subscription agreements for a total of AUD 230 million with KfW on behalf of the German Raw Materials Fund and Export Finance Australia. The equity subscriptions comprise €50 million from the German Raw Materials Fund and $100 million from the EFA. There's significant linkages between the workstreams for off-take, project financing, and these strategic investments, which creates some complexity. The company's targeting settlement of the EFA and German Raw Materials Fund subscriptions to occur in October 2026, so this year, after contractual close for project financing. On execution of the project finance and settlement of strategic equity, the Nolans project will be fully funded. The company will be placed to move into project execution. This is a significant milestone.

Speaker #1: The equity subscriptions comprise €50 million from the German Raw Materials Fund and US$100 million from EFA. There's significant linkage between the workstreams for offtake project financing and these strategic investments, which creates some complexity.

Speaker #1: The company is targeting settlement of the EFA and German Raw Materials Fund subscriptions to occur in October 2026, so this year, after contractual close for project financing.

Speaker #1: On execution of the project finance and settlement of strategic equity, the Nolan's project will be fully funded. The company will be positioned to move into project execution.

Speaker #1: This is a significant milestone. I want to thank the finance and commercial team for the hard work they've done in the background for the due diligence with lenders.

Peter Sherrington: I want to thank the finance and commercial team for the hard work they've done in the background for the due diligence with lenders, equity investments, and to ensure the company has been ready to execute private placements at short notice as opportunities emerged. More recently, our efforts have turned to planning to ensure our business systems and governance are appropriate for the next phase of construction, knowing that whilst the funding workstreams have been intense, the next phase of project execution and then operations will bring new challenges which we are now preparing for. I'll now pass to Tommy who will talk about project execution.

Speaker #1: Equity investments and ensuring the company has been ready to execute private placements at short notice as opportunities emerged. More recently, our efforts have turned to planning to ensure our business systems and governance are appropriate for the next phase of construction. Knowing that, whilst the funding workstreams have been intense, the next phase of project execution— and then operations—will bring new challenges, which we are now preparing for.

Speaker #1: I'll now pass to Tommy, who'll talk about project execution.

Speaker #2: Thank you, Peter. The top three priorities for the Nolan’s project over the previous quarter have been getting the right people in the right roles, doing the right work, focusing on project execution readiness, and ramping up the procurement process to be ready for execution after the FID announcement.

Tommie van der Walt: Thank you, Peter. The top 3 priorities for the Nolans project over the previous quarter has been getting the right people in the right roles doing the right work. Focus on project execution readiness and ramping up the procurement process to be ready for execution after the FID announcement. Reporting back on each of these priorities, we are happy to share that all roles in a highly capable Arafura owners team have now been filled, and the Hatch EPCM team has all the required key resources in place. The focus of the team has been and remains on refining the project execution plan and setting up for execution readiness as we head into construction. Thirdly, the procurement process has been ramped up effectively, and the team is executing the procurement strategy as planned.

Speaker #2: Now, reporting back on each of these priorities, we are happy to share that all roles in a highly capable Arafura owners' team have now been filled, and the HEPCN team has all the required key resources in place.

Speaker #2: The focus of the team has been, and remains, on refining the project execution plan and setting up for execution readiness as we head into construction.

Speaker #2: And thirdly, the procurement process has been ramped up effectively, and the team is executing the procurement strategy as planned. So that covers the last quarter. But looking to key milestones achieved towards project execution readiness now, the project is progressing commercial engagement with an expression of interest process being implemented through the Northern Territory Industry Capability Network, or ICN.

Tommie van der Walt: That covers the last quarter, but looking to key milestones achieved towards project execution readiness now, the project is progressing commercial engagement with an expression of interest process being implemented through the Northern Territory Industry Capability Network or ICN. This is aimed at extending the project commercial reach and ensuring suppliers and contractors have visibility on upcoming packages. In support of this process and to encourage local business participation, an industry roadshow was undertaken in Alice Springs, Darwin, and Katherine. The roadshows were very well supported with hundreds of attendees from various organizations. The site reestablishment works have been largely completed and is now ready for main construction to commence, and this was done with no safety incidents. Health, safety, environment routines, and site access processes have been implemented, including the demarcation of culturally sensitive areas.

Speaker #2: This is aimed at extending the project's commercial reach and ensuring suppliers and contractors have visibility on upcoming packages. In support of this process, and to encourage local business participation, an industry roadshow was undertaken in Alice Springs, Darwin, and Katherine.

Speaker #2: The roadshows were very well supported, with hundreds of attendees from various organisations. The site's re-establishment works have been largely completed and it is now ready for main construction to commence.

Speaker #2: And this was done with no safety incidents. Health, safety, and environment routines and site access processes have been implemented, including the demarcation of culturally sensitive areas.

Speaker #2: So then, moving on to looking forward to project activities over the next 9 to 12-month period ahead, the Stuart Highway turnoff work package is planned for the end of Q1 for the full year '27.

Tommie van der Walt: Moving on to looking forward to project activities over the next 9 to 12-month period ahead. The Stuart Highway turnoff work package is planned for the end of Q1 for the full year 2027, and this scope completes works undertaken previously and is critical to public and project traffic safety at that intersection. Drainage works and establishment of temporary site offices is planned for Q2 in full year 2027, in readiness of bulk earthworks with bulk earthworks planned to commence in Q2 of full year 2027. Mobilization of the batch plant is planned for around the end of Q4 for the full year 2027, with a start through Q1 full year 2028, with concrete works to follow right after that.

Speaker #2: And this scope completes works undertaken previously and is critical to public and project traffic safety at that intersection. Then drainage works and establishment of temporary site offices is planned for Q2 in full year 2027, in readiness for bulk earthworks, with bulk earthworks planned to commence in Q2 of full year '27.

Speaker #2: Mobilisation of the batch plant is planned for around the end of Q4 of FY27, with a start through Q1 of FY28, with concrete works to follow right after that.

Speaker #2: So, in summary, as we head into construction, we continue to do the work and implement the systems to ensure we best position the company to safely execute the Nolan's Project.

Tommie van der Walt: In summary, as we head into construction, we continue to do the work and implement the systems to ensure we best position the company to safely execute the Nolans project, and of course, with the best commercial outcome for the business in mind. I now hand back to Daryl to close.

Speaker #2: And, of course, with the best commercial outcome for the business in mind. I now hand back to Daryl to close.

Speaker #3: Hi, thanks, Tommy. And look, just one thing I really wanted to pull out—so, Tommy just referred to the Stuart Highway access works.

Darryl Cuzzubbo: Thanks, Tommie. Look, just one thing I really wanted to pull out. Tommie just referred to the Stuart Highway access works. That actually is the start of construction. When we announced FID back in May, we said we would start construction in September, and those access works will start in the next couple of weeks, and hence we will be starting construction proper literally in a couple of weeks' time, which is obviously an exciting time for us. Before we open up to Q&A, I did want to take a moment to publicly thank Peter for his leadership and impact over the last 18 years at Arafura. No one has put in more sustained effort or leadership to get us to where we are today than Peter has. I was reflecting on this recently.

Speaker #3: That actually is the start of construction. When we announced feedback in May, we said we would start construction in September, and that is—access works will start in the next couple of weeks, and hence we'll be starting construction proper literally in a couple of weeks' time, which is obviously an exciting time for us.

Speaker #3: Look, before we open up to Q&A, I did want to take a moment to publicly thank Peter for his leadership and impact over the last 18 years at Arafura.

Speaker #3: No one has put in more sustained effort or leadership to get us to where we are today than Peter has, and I was reflecting on this recently.

Speaker #3: If you think about it, there's a reason other eras' projects don't even attempt to go all the way to oxide stage processing. They see the funding challenge as too difficult.

Darryl Cuzzubbo: If you think about it, there is a reason other rare earths projects do not even attempt to go all the way to oxide stage processing. They see the funding challenge as too difficult. Peter, as CFO, took the challenge head-on, and it is because he did, despite more than a few naysayers along the way, that we are now in a genuinely unique position to take advantage of the urgent need to diversify supply chains. Just to put the scale of that challenge into perspective. If you include the completion support that Peter and his team have been able to secure, Peter and his team took on the job of raising around 10 times our market cap at the start of the process. I honestly cannot think of any other company who has pulled that off. It was his offtake lead, followed by ECA debt strategy that made this possible.

Speaker #3: Peter, as CFO, took the challenge head-on, and it's because he did—despite more than a few naysayers along the way—that we're now in a genuinely unique position to take advantage of the urgent need to diversify supply chains.

Speaker #3: Just to put the scale of that challenge into perspective, if you include the completion support that Peter and his team have been able to secure, Peter and his team took on the job of raising around 10 times our market cap at the start of the process.

Speaker #3: I honestly can't think of any other company who has pulled that off. And it was his offtake-led, followed by ECA debt strategy, that made this possible.

Speaker #3: And it wasn't just a great strategy, either. It took an enormous amount of effort. Peter and his team were often still in the office late on Friday evenings, in on weekends, and taking late-night calls with the European lenders and off-takers.

Darryl Cuzzubbo: It was not just a great strategy either. It took an enormous amount of effort. Peter and his team were often still in the office late on Friday evenings, in on weekends, and taking late-night calls with European lenders and off-takers. We would not be where we are today without you, Peter. So on behalf of the Arafura board and management team, we want to thank you, and we are genuinely grateful. Penny, I think with that, I will hand over to you to open up to Q&A.

Speaker #3: We wouldn't be where we are today without you, Peter. So, on behalf of the Arafura Board of Management team, we want to thank you, and we're genuinely grateful.

Speaker #3: So Kenny, I think with that, I'll hand over to you to open up to Q&A.

Speaker #1: Thank you.

Operator: Thank you.

Speaker #4: Thanks, Daryl.

[Company Representative] (Arafura): Thanks, Daryl.

Penny Stonier: Thanks, Daryl.

Speaker #1: If you would like.

[Company Representative] (Arafura): If you would like-

Operator: If you would like-

Speaker #4: Go ahead, Darcy.

[Company Representative] (Arafura): Go ahead, Darcy.

Penny Stonier: Go ahead, Darcy.

Speaker #1: Thank you. If you would like to ask a question via the phone, you'll need to press the star key followed by the number one on your telephone keypad.

Operator: Thank you. If you would like to ask a question via the phone, you will need to press the star key followed by the number one on your telephone keypad. We kindly request that you please limit your questions to two per person and then rejoin the queue for any follow-up questions to be addressed after the webcast questions. If you would like to ask a question via the webcast, please type your question into the Ask a Question box and click Submit. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. As there are currently no questions at this time, I will hand the conference back over for any webcast questions to be addressed.

Speaker #1: We kindly request that you please limit your questions to two per person, and then rejoin the queue for any follow-up questions to be addressed after the webcast questions.

Speaker #1: If you would like to ask a question via the webcast, please type your question into the 'Ask a Question' box and click submit. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced.

Speaker #1: As there are currently no questions at this time, I'll hand the conference back over for any webcast questions to be addressed.

Speaker #4: Thank you, Darcy. Let me just start with a couple of questions. There are quite a few coming through on the webcast. What I'll do is probably summarize these, Daryl, for yourself and for the participants.

[Company Representative] (Arafura): Thank you, Darcy. Let me just start by a couple of questions. There are quite a few coming through on the webcast. What I will do is probably summarize these, Darryl, for yourself and for the participants. I guess we have commented on the actual physical start date. Can you provide some more clarification in terms of some of the major works and when they will be starting?

Penny Stonier: Thank you, Darcy. Let me just start by a couple of questions. There are quite a few coming through on the webcast. What I will do is probably summarize these, Darryl, for yourself and for the participants. I guess we have commented on the actual physical start date. Can you provide some more clarification in terms of some of the major works and when they will be starting?

Speaker #4: So, I guess we have commented on the actual physical start date. Can you provide some more clarification in terms of some of the major works and when they will be starting?

Speaker #3: Yeah, sure. Kenny and Tommy did touch on it. So the start of construction proper—firstly, we've already re-established the site, so we spent a bit of money on getting the site ready.

Darryl Cuzzubbo: Well, sure, Penny. Tommy did touch on it, so the start of construction proper. Firstly, we have already reestablished the site. We spent a bit of money on getting the site ready, and most of that work has been completed. The access works that allows, if you like, the broader construction activity to commence, will start in about 2 weeks' time. The next large contract, as Tommy mentioned, is the bulk earthworks, which we expect to release the middle of next quarter. We really want to get our bulk earthworks done by the middle of next year, which then allows concrete works to start. That is kind of, if you like, a high-level, critical path for the next 6 months.

Speaker #3: And most of that work has been completed. The access works that allow, if you like, the broader construction activity to commence will start in about two weeks' time.

Speaker #3: The next large contract, as Tommy mentioned, is the bulk earthworks, which we expect to release in the middle of next quarter. We really want to get our bulk earthworks done by the middle of next year, which will then allow concrete works to start.

Speaker #3: So that's kind of, if you like, a high-level critical path for the next six months.

Speaker #4: Thank you. This one's probably best directed towards Peter. Peter, from Peter Collis, can you please tell us Nolan's expected annual DYTB output and what percentage of that is currently locked into binding off-take agreements?

[Company Representative] (Arafura): Thank you. This one is probably best directed towards Peter. Peter Collis, can you please tell us the Nolans expected annual DyTb output and what percentage of that is currently locked into binding offtake agreements, and what is the plan for selling the remainder? A follow-on question from that, can you advise if the pricing for these contracts are index priced or if there are any floor mechanisms involved?

Penny Stonier: Thank you. This one is probably best directed towards Peter. Peter Collis, can you please tell us the Nolans expected annual DyTb output and what percentage of that is currently locked into binding offtake agreements, and what is the plan for selling the remainder? A follow-on question from that, can you advise if the pricing for these contracts are index priced or if there are any floor mechanisms involved?

Speaker #4: And what is the plan for selling the remainder? And then, a follow-on question from that: Can you advise if the pricing for these contracts is index-priced or if there are any floor mechanisms involved?

Speaker #2: So, the DYTB—there's roughly about 40 tonnes of DYTB that we recover through processing. So, it's a part of the same heavy rare earth product.

Peter Sherrington: The DyTb, there is roughly about 40 tons of DyTb that we recover through processing. It is a part of the set heavy rare earth product. It has always been part of the product stream that is contained within that. In terms of we have already contracted 15 tons or thereabouts with Traxys North America and also with the Indian counterparty. In terms of placing the rest of the product, we probably are looking to try and match the DyTb with the customers who require the NdPr to go with it. The DyTb is critical to the manufacture of magnets that operate in high-temperature environments, so high-performance environments, so as they do not lose their coercivity at higher temperatures. These predominantly the EV automakers will have a requirement for those products. In terms of pricing of those products, we will be unlikely to put a floor in.

Speaker #2: So it's always been part of the product stream. It's contained within that. So in terms of—we've already contracted 15 tonnes, or thereabouts, with Traxis North America.

Speaker #2: And also with the Indian counterparty. In terms of placing the rest of the product, we probably are looking to try and match the DYTB with the customers who acquire the NDPR to go with it.

Speaker #2: So the DYTB is critical to the manufacturer of magnets that are operating in high-temperature environments, so high-performance environments, so they don't lose their coercivity at higher temperatures.

Speaker #2: So predominantly, the EV automakers will have a requirement for those products. In terms of pricing for those products, we will be unlikely to put a floor in.

Speaker #2: But we do have different pricing methods. In some instances, we will negotiate an annual price. We believe that demand will be significant and supply will be tight for some period of time.

Peter Sherrington: But we do have different pricing methods. In some instances, we will negotiate an annual price. We believe that demand will be significant and supply will be tight for some period of time. In some instances where the customer wants a pricing mechanism, we are looking to price it accordingly, given that there will be tightness in the marketplace. But I am just not going to disclose what those pricing regimes are. Commercial in confidence.

Speaker #2: And in some instances, where the customer wants a pricing mechanism, we will be looking to price it accordingly, given that there will be tightness in the marketplace.

Speaker #2: But I'm just not going to disclose what those pricing regimes are; they're commercially confidential.

Speaker #4: Of course. And perhaps as a follow-on to that question—and this is probably for Daryl or Tommy—can you just elaborate on the studies that are underway to either increase the recoveries of heavies and/or separate heavies further?

[Company Representative] (Arafura): Of course. And perhaps as a follow-on to that question, and this is probably perhaps Darryl or Tommy, can you just elaborate on the studies that are underway to either increase the recoveries of heavies and/or separate heavies further?

Penny Stonier: Of course. And perhaps as a follow-on to that question, and this is probably perhaps Darryl or Tommy, can you just elaborate on the studies that are underway to either increase the recoveries of heavies and/or separate heavies further?

Speaker #3: Yeah, so maybe let me make one comment, and Tommy, you can talk to it in a little more detail. As we've detailed this in our quarterlies previously—

Darryl Cuzzubbo: Well, maybe let me make one comment, and Tommy, you can talk to it in a little bit more detail. And look, we did tell this right in our quarterlies previously. So we are looking at a separate project to process additional heavies. One, recover additional heavies from the waste stream. So Peter mentioned the 40 tons of DyTb. That will take it to 50, 55 tons and also processing it to a separate DyTb oxide. But that is a separate project, and it is a project subject to a separate decision, which we will obviously come to the market with at a later point. Tommy, did you want to make any additional comments to that?

Speaker #3: So, we are looking at a separate project to process additional heavies—so, one to recover additional heavies from the waste stream. Peter mentioned the 40 tonnes of DYTB, and that will take it to 50 to 55 tonnes.

Speaker #3: And also processing it to a separate DYTB oxide, but that's a separate project. And it's a project subject to a different, a separate decision, which we will obviously come to the market with at a later point.

Speaker #3: Tommy, did you want to make any additional comments to that?

Speaker #2: No, that's perfectly accurate.

Tommie van der Walt: No, that is perfectly accurate.

Speaker #4: Okay, so another question, just in regards to the auto oxide process—once you've made a hole in the ground, from what the shareholders read, the refining process in China is highly polluting.

[Company Representative] (Arafura): Okay. So another question, just in regards to the ore-to-oxide process, and once you have made a hole in the ground. From what a shareholder has read, the refining process in China is highly pollutive. Can you please outline how the process will be conducted more safely in Australia?

Penny Stonier: Okay. So another question, just in regards to the ore-to-oxide process, and once you have made a hole in the ground. From what a shareholder has read, the refining process in China is highly pollutive. Can you please outline how the process will be conducted more safely in Australia?

Speaker #4: Can you please outline how the process will be conducted more safely in Australia?

Speaker #3: Yeah, so let me answer that, and then Peter, Tommy, if you've got anything to add, just jump in. So firstly, you can imagine with our nine lenders, five countries, we have to meet all the different international standards.

Darryl Cuzzubbo: Yeah. So let me answer that and then, Peter, Tommy, if you have anything to add, just jump in. So firstly, you can imagine with our nine lenders, five countries, we have to meet all the different international standards. So you can process rare earths in a very environmentally responsible way. And in fact, if you look at Lynas, they are doing that. You look at the processes very similar to hydromet solvent extraction processes that you see at Olympic Dam. So you can absolutely apply international environmental standards to what we are doing, and we are doing that and need to do that to satisfy our lenders' requirements. And everything that we do meets the different international and Australian engineering standards as well. Peter or Tommie, do you want to make any additional comments on that?

Speaker #3: So, the UK processes rare earths in a very environmentally responsible way. In fact, if you look at Lynas, they're doing that. If you look at the process, it's very similar to Hydromet's solvent extraction processes that you see at Olympic Dam.

Speaker #3: So you can absolutely apply international environmental standards to what we're doing. And we are doing that, and need to do that to satisfy our lenders' requirements.

Speaker #3: And everything that we do meets the different international and Australian engineering standards as well. Peter or Tommy, did you want to make any additional comments on that?

Speaker #2: I suppose for the Nolan's auto oxide, one of the key differentiators from other processes is that all of the waste materials are handled on a single site, which perhaps is different, as other projects do different things.

Peter Sherrington: I suppose for the Nolans ore-to-oxide, one of the key differentiators with other processes is that all of the waste material is handled on a single site. Which perhaps is, different projects do different things. In China, a lot of processing is done at separate sites, which means waste is dealt with in different locations, whereas all of ours is under one single residue storage facility permitted with one regulator.

Speaker #2: In China, a lot of processing is done at separate sites, which means waste is dealt with in different locations, whereas all of ours is under one single residue storage facility, permitted with one regulator.

Speaker #3: Yeah, in addition to that, the environmental impacts—similar to any sort of safety impacts or economic impacts—are part and parcel of the design criteria to ensure that whatever is designed will give the best outcome from an environmental perspective.

Tommie van der Walt: Yeah. And in addition to that, the environmental impacts, similar to any sort of safety impacts or ergonomic impacts, is part and parcel of the design criteria to ensure that whatever is designed will get the best outcomes from an environmental perspective.

Speaker #1: Just to pick up on—sorry, Payne—just to pick up on Peter's point too. So, everything that we process, we neutralize, and basically what we put back in the ground is what we're taking out of the ground.

Darryl Cuzzubbo: Just to pick up on

[Company Representative] (Arafura): Tommy and

Penny Stonier: Tommy and

[Company Representative] (Arafura): Sorry, Penny. Just to pick up on Peter's point, too. Everything that we process, we neutralize, and basically what we put back in the ground is what we have taken out of the ground.

Darryl Cuzzubbo: Sorry, Penny. Just to pick up on Peter's point, too. Everything that we process, we neutralize, and basically what we put back in the ground is what we have taken out of the ground.

Speaker #4: Okay, so if we move along to the indicative timetable, can you please just provide some guidance in terms of how long after commencement of construction until you have product to sell?

[Company Representative] (Arafura): Okay. If we move along to the indicative timetable, can you please just provide some guidance in terms of how long after commencement of construction until you have product to sell? What is the period of time until we actually reach a mechanical completion, if that is something you can provide guidance on?

Penny Stonier: Okay. If we move along to the indicative timetable, can you please just provide some guidance in terms of how long after commencement of construction until you have product to sell? What is the period of time until we actually reach a mechanical completion, if that is something you can provide guidance on?

Speaker #4: And then, what is the period of time until we actually reach a mechanical completion, if that's something you can provide guidance on?

Speaker #3: Yeah, so let me make some comments. And again, Tommy, you jump in, right? So, we have a 37-month construction schedule from the start of construction in a couple of weeks' time.

Darryl Cuzzubbo: Yeah. Let me make some comments and again, Tommie, you know you jump in, right? We have a 37-month construction schedule from the start of construction in a couple of weeks' time. To do the maths on that, we expect practical completion towards the end of 2029, at which point we will move into commissioning and ramp up, which we are forecasting to be a two-year process. Now, from a funding perspective, it has been assumed it is a three-year process, but we are working to a two-year ramp up. So that would see, if you like, production reaching nameplate at the end of 2031, early 2032. But with first production at the end of 2029. Tommie, any additional comments to that?

Speaker #3: So do the maths on that. We expect practical completion towards the end of 2029, at which point we will move into commissioning and ramp-up, which we're forecasting to be a two-year process.

Speaker #3: Now, from a funding perspective, it's been assumed it's a three-year process, but we are working to a two-year ramp-up. So that would see, if you like, production reaching nameplate at the end of '31, early '32.

Speaker #3: But with first production at the end of 2029. Tommy, any additional comments to that?

Speaker #2: No, Daryl, that is accurate.

Tommie van der Walt: No, Darryl, that is accurate.

Speaker #4: Okay. Peter, one of our shareholders, Andrew Bellard, wanted to thank you for your many years of service. We are very grateful for your contribution to the company.

[Company Representative] (Arafura): Okay. Peter, from one of our shareholders, Andrew Ballard, wanted to thank you for your many years of service. Very grateful for your contribution to the company. What he would like to understand as well is whether the debt will be finalized and binding prior to your departure. Also whether or not what the conditions are around the US government $300 million debt facility. Is this something that is being pursued and will be executed as part of the full debt stack?

Penny Stonier: Okay. Peter, from one of our shareholders, Andrew Ballard, wanted to thank you for your many years of service. Very grateful for your contribution to the company. What he would like to understand as well is whether the debt will be finalized and binding prior to your departure. Also whether or not what the conditions are around the US government $300 million debt facility. Is this something that is being pursued and will be executed as part of the full debt stack?

Speaker #4: What he would like to understand as well is whether the debt will be finalized and binding prior to your departure. And also, what the conditions are around the US government $300 million debt facility—is this something that is being pursued, and will it be executed as part of the full debt stack?

Speaker #2: Good, thank you for the recognition. In terms of the debt facility, I mean, one of my main objectives is going to contractual close at the time we leave.

Peter Sherrington: So thanks for the recognition. In terms of the debt facility. One of my main objectives is going to contractual close at the time we leave. It is also critical to settle on those strategic investors as well. So whilst contractual close is an important milestone, there are other important milestones along the way with the debt facilities, including first drawdown and financial close. But certainly that is a milestone that we are looking to wrap up in the period whilst I finish here. There was a second part to the question. Sorry, Penny.

Speaker #2: It's also critical to settle on those strategic investors as well. So, whilst contractual close is an important milestone, there are other important milestones along the way with the debt facilities, including first drawdown and financial close.

Speaker #2: But certainly, that is a milestone that we're looking to wrap up in the period while I finish here. There was a second part to the question.

Speaker #2: Sorry, Payne.

Speaker #4: The US debt—and whether that is part of the total debt stack that is in place at the moment—and whether or not that is something that is being looked at to close.

[Company Representative] (Arafura): The US debt-

Penny Stonier: The US debt-

Peter Sherrington: Yes.

[Company Representative] (Arafura): -and whether that is part of the total debt stack that is in place at the moment.

Penny Stonier: -and whether that is part of the total debt stack that is in place at the moment.

Peter Sherrington: Yeah.

[Company Representative] (Arafura): And whether or not that is something that is being looked at to close.

Penny Stonier: And whether or not that is something that is being looked at to close.

Speaker #2: Yeah. So we have $775 million US dollars. We've got senior debt facilities, which actually exclude the letter of support or letter of intent from US ExIm.

Peter Sherrington: Yeah. So, we have 775 million US dollars of senior debt facilities, which actually excludes the letter of support or letter of intent from US EXIM. The US EXIM facilities are not something that we consider as part of the senior debt facilities. It is an opportunity that is to be pursued, perhaps alongside any project expansion, whether it be for heavy rare earths or a stage 2. At present, it is not been as part of that initial debt stack.

Speaker #2: The US Exxon facilities are not something that we consider as part of the senior debt facilities. It's an opportunity that's to be pursued, perhaps alongside any project expansion—whether it be for heavy rare earths or a stage two at present.

Speaker #2: It's not in this part of that initial debt stack.

Speaker #4: Okay. And can you comment on the Canadian facility and what that's tied to, with it being ECA financing? What are the reciprocal arrangements?

[Company Representative] (Arafura): Mm-hmm. Can you comment on the Canadian facility and what that's tied to, with it being ECA financing, what's the reciprocal arrangements?

Penny Stonier: Mm-hmm. Can you comment on the Canadian facility and what that's tied to, with it being ECA financing, what's the reciprocal arrangements?

Speaker #2: Yeah. So, some of our procurement is Canadian-based in terms of engineering services. Some equipment packages are based there. There's quite a bit of connectivity to the Canadian market for some significant parts of procurement for the project.

Peter Sherrington: Yeah. So, some of our procurement is Canadian-based in terms of engineering services. Some equipment packages are based there. There's quite a bit of connectivity to the Canadian market for some significant parts of procurement for the project. Yeah.

Speaker #2: Yeah.

Speaker #4: Okay, one other question that Andrew had, which I will address. There was a question as to the July quarterly. We had opted not to do an investor briefing as part of the July quarterly.

[Company Representative] (Arafura): Okay. One other question that Andrew had, which I will address. There was a question as to the July quarterly. We had opted not to do an investor briefing as part of the July quarterly. The rationale behind that, Mr. Ballard, was that we had both the EGM at the beginning of July, where we provided a significant material update in terms of progress, updates on FID and construction. Then we also had this call coming up at the end of the full year results. So we felt it would be a duplication, essentially, of information, and perhaps we were better to spread that out over the key milestones. So I hope that answers your question there. Darryl, the share price performance hasn't met expectations. As a reflection of the performance, is that a reflection of the performance of the board?

Penny Stonier: Okay. One other question that Andrew had, which I will address. There was a question as to the July quarterly. We had opted not to do an investor briefing as part of the July quarterly. The rationale behind that, Mr. Ballard, was that we had both the EGM at the beginning of July, where we provided a significant material update in terms of progress, updates on FID and construction. Then we also had this call coming up at the end of the full year results. So we felt it would be a duplication, essentially, of information, and perhaps we were better to spread that out over the key milestones. So I hope that answers your question there. Darryl, the share price performance hasn't met expectations. As a reflection of the performance, is that a reflection of the performance of the board?

Speaker #4: The rationale behind that, Mr. Bellard, was that we had both the EGM at the beginning of July, where we provided a significant material update in terms of progress updates on FID and construction.

Speaker #4: And then we also had this call coming up at the end of full-year results, so we felt it would be a duplication, essentially, of information, and perhaps we were better to spread that out over the key milestones.

Speaker #4: So, I hope that answers your question there, Daryl. The share price performance hasn't met expectations. As a reflection of the performance, is that a reflection of the performance of the board?

Speaker #4: And then, what are we doing as a company to improve the share price going forward?

[Company Representative] (Arafura): What are we doing as a company to improve the share price going forward?

Penny Stonier: What are we doing as a company to improve the share price going forward?

Speaker #3: Yeah, good question. So firstly, you're not alone on that. I mean, it's a bit of a crazy situation, right? So if you look at the amount, it's much different to our market cap.

Darryl Cuzzubbo: Yeah, good question. Firstly, you're not alone on that. It's a bit of a crazy situation, right? If you look at the amount of cash that we have on the balance sheet, that is not much different to our market cap. Talking to an investor recently and using his words is, "Investing in Arafura at the moment is like having a free option." If you take a broader look, you look at other rare earths projects, they've also pulled back. Some of the, if you like, the attention that's come off the rare earths sector, I think we're seeing, if you like, the impact of that. If I talk to what's in our control, there's two things in particular.

Speaker #3: So talking to an investor recently and using his words, is investing in Arafura at the moment is like having a free option. So just if you take a broader look, you look at other rare earth projects, they've also pulled back.

Speaker #3: So some of the, if you like, attention has come off the rare earth sector. I think we're seeing, if you like, the impact of that.

Speaker #3: If I talk to what's in our control, there are two things in particular. So firstly, we continue to get in front of investors and say, "Hey, we can bypass China and we're the only project that can." That is in construction.

Darryl Cuzzubbo: Firstly, we continue to get in front of investors and say, "Hey, we can bypass China, and we're the only project that can, that is in construction." Look across the globe, we are very well-positioned, uniquely positioned to be an alternative to China, and there's not a lot of competition in that space. We'll continue to make that position. There will no doubt be a catalyst at some point that brings attention back into the rare earths sector, and I'd like to think that with this positioning in front of investors, that we will see a rerating. I would like to think it'll be a little bit stickier given that work. But the second thing that we have to do is we're now in construction, and we need to deliver on our milestones in construction. You look at Lindian, right? They've been in construction.

Speaker #3: So, look across the globe. We are very well positioned—uniquely positioned—to be an alternative to China. And there's not a lot of competition in that space.

Speaker #3: So, we'll continue to make that position. There will, no doubt, be a catalyst at some point that brings attention back into the rare earth sector.

Speaker #3: And I'd like to think that, with this positioning in front of investors, we will see a re-rating, and I'd like to think it'll be a little bit stickier, given that work.

Speaker #3: But the second thing that we have to do is, we're now in construction, and we need to deliver on our milestones in construction. I mean, you look at Linden, right?

Speaker #3: They've been in construction. They're delivering on their milestones. And look at their share price. So there are two things. One is to continue to remind the market how we are uniquely positioned.

Darryl Cuzzubbo: They're delivering on their milestones, and look at their share price. There are two things. One is continue to remind the market how we are uniquely positioned, and the second thing is delivering on our construction milestones.

Speaker #3: And the second thing is delivering on our construction milestones.

Speaker #4: The next question is in regards to the Board, if you wouldn't mind answering on behalf of the Board. I just want to understand if, in terms of the composition now, we have the right people to successfully deliver the Nolans Project and to support the executive team in the delivery of that project.

[Company Representative] (Arafura): The next question is in regards to the board, if you wouldn't mind answering on behalf of the board. Just want to understand if the composition now, we have the right people to successfully deliver the Nolans project and support the executive team in the delivery of that project. Recognizing quite a few of the members do have commitments with other mining companies. Perhaps you can elaborate on that.

Penny Stonier: The next question is in regards to the board, if you wouldn't mind answering on behalf of the board. Just want to understand if the composition now, we have the right people to successfully deliver the Nolans project and support the executive team in the delivery of that project. Recognizing quite a few of the members do have commitments with other mining companies. Perhaps you can elaborate on that.

Speaker #4: Recognizing that quite a few of the members do have commitments with other mining companies, perhaps you can elaborate on that.

Speaker #3: Yeah, sure. So, over the last two years, we have very deliberately made sure that we've now got a management team with the execution capability for the construction phase and going into operations.

Darryl Cuzzubbo: Yeah, sure. In the last 2 years, we have very deliberately made sure that we have now got a management team that has got the execution capability for the construction phase and going into operations. You can see that skillset on the management team. We did the same thing with the board. So we brought on Michael Spreadborough, who has got deep operational expertise in running complex process plants such as Olympic Dam. We brought on Roger Higgins, who has got both operational and large project experience, who was on the board for Roy Hill for quite a while. We brought on Ian Murray, who has not just deep financial expertise, but he has been a CEO, and he has taken a company from relatively junior into a significant space. So we have been very deliberate at building out both the board and the management team.

Speaker #3: And you can see that skill set on the management team, but also, we did the same thing with the board. We brought on Mike Spreadborough, who's got deep operational expertise in running complex process plants such as the Olympic Dam.

Speaker #3: We brought on Roger Higgins, who's got both operational and large project experience. He was on the board for Warwick for quite a while. And we brought on Ian Murray, who has not just deep financial expertise, but he's been a CEO and he's taken a company from relatively junior into a significant space.

Speaker #3: So we've been very deliberate in building out both the board and the management team. Every year, we refresh our skill sets and are always assessing, but I think we're very well positioned from both the board and management team perspective for the phase that we're currently in and going into.

Darryl Cuzzubbo: Every year, we refresh our skillsets and are always assessing. But I think we are very well-positioned from both the board and a management team perspective for the phase that we are currently in and going into.

Speaker #4: Okay. In terms of index rebalance, obviously, Arafura is part of the S&P 300. And MSCI indexes can you please provide a bit more information regards to the specific initiatives and capital market communication plans that are in place to be able to well, with the aim of protecting and safeguarding our standing in these benchmarks?

[Company Representative] (Arafura): Okay. In terms of index rebalance, obviously Arafura is part of the S&P 300 and MSCI indexes. Can you please provide a bit more information in regards to the specific initiatives and capital market communication plans that are in place to be able to, with the aim of protecting and safeguarding our standing in these benchmarks?

Penny Stonier: Okay. In terms of index rebalance, obviously Arafura is part of the S&P 300 and MSCI indexes. Can you please provide a bit more information in regards to the specific initiatives and capital market communication plans that are in place to be able to, with the aim of protecting and safeguarding our standing in these benchmarks?

Speaker #3: Yes, probably a little bit to what I've said already. And then Peter and Penny, Angela, jump in. So we continue, as I mentioned earlier, to get in front of investors both in the Australia/Asia market, and particularly in the US/North America market.

Darryl Cuzzubbo: Yes. Probably a little bit to what I have said already, and then Peter and Penny, Angela, jump in. So we continue, as I mentioned earlier, to get in front of investors both in the Australia, Asia market and particularly in the US/North America market. Now that we have got this offtake into the US with USA Rare Earth. So we continue to get in front of existing investors, get in front of new investors, if you like, talk to them about how the rare earths supply chain is being built out. This is quite a nuanced supply chain. It is not broadly understood. How we really do provide an alternative to China and continue to update the market on how we are progressing into construction and ultimately to operation to be an alternative to China.

Speaker #3: And now that we've got this offtake into the US with US traceability, we continue to get in front of existing investors and get in front of new investors, if you like, to talk to them about how the rare earth supply chain is being built out, because it's quite a nuanced supply chain.

Speaker #3: It's not broadly understood, and how we really do provide an alternative to China. We'll continue to update the market on how we're progressing into construction, and ultimately into operations, to be an alternative to China.

Speaker #3: But at the end of the day, we also point out, you look at our market cap, $1.2 billion. You look at Lynas's and MP Materials's market cap.

Darryl Cuzzubbo: But at the end of the day, we also point out, you look at our market cap, AUD 1.2 billion. You look at Lynas' and Adam Pass' market cap. Our production level isn't that distinctly different to theirs as we go into production, but we've got a very significant difference in market valuation. As we push through the project execution risk, we'd like to think we'll see a significant rerating. Peter or Penny, do you have any additional comments to make on that?

Speaker #3: Our production level isn't that distinctly different to theirs as we go into production. But we've got a very significant difference in market valuation.

Speaker #3: So as we push through the project execution risk, you'd like to think we'll see a significant re-rating. Peter or Penny, do you have any additional comments to make on that?

[Company Representative] (Arafura): I might just add that we do recognize that broader and deeper research coverage is incredibly important in supporting that institutional awareness and, in particular, liquidity. One thing to call out, I think, is that Arafura itself operates in an incredibly complex and specialized sector. As a large and integrated project, it does mean we need significant level of analyst understanding and modeling. So whereas, given where it has been historically, has had a very niche coverage or limited coverage. Particularly as we speak with a number of our research analysts and brokerages, they are getting themselves up to speed at the same time in what has been a very opaque market in terms of pricing, barriers to entry. So being able to make some assumptions, which a lot of this is based on assumptions for the brokers and their research.

Penny Stonier: I might just add that we do recognize that broader and deeper research coverage is incredibly important in supporting that institutional awareness and, in particular, liquidity. One thing to call out, I think, is that Arafura itself operates in an incredibly complex and specialized sector. As a large and integrated project, it does mean we need significant level of analyst understanding and modeling. So whereas, given where it has been historically, has had a very niche coverage or limited coverage. Particularly as we speak with a number of our research analysts and brokerages, they are getting themselves up to speed at the same time in what has been a very opaque market in terms of pricing, barriers to entry. So being able to make some assumptions, which a lot of this is based on assumptions for the brokers and their research.

Speaker #4: I'll just add that we do recognise that broader and deeper research coverage is incredibly important in supporting that institutional awareness, and in particular, liquidity.

Speaker #4: One thing to call out, I think, is that Arafura itself operates in an incredibly complex and specialised sector. So, as a large and integrated project, it does mean we need a significant level of analyst understanding and modelling.

Speaker #4: So, rare earths, given where it has been historically, has had very niche coverage or limited coverage. And particularly as we speak with a number of our research analysts and brokers, they are getting themselves up to speed at the same time in what has been a very opaque market in terms of pricing and barriers to entry. So, being able to make some assumptions—which a lot of this is based on assumptions—for the brokers and their research.

Speaker #4: Being able to make some valid assumptions going forward as to what the market is and what expectations on pricing are is incredibly critical. So, there is a fair bit of market understanding, access to management, creating that transparency or providing that transparency, and then, most importantly, us being able to demonstrate through our actions and on our milestones.

[Company Representative] (Arafura): Being able to make some valid assumptions going forward as to what the market and expectations on pricing is incredibly critical. So there is a fair bit of market understanding, access to management, creating that transparency or providing that transparency, and then most importantly, then us being able to demonstrate through our actions and on our milestones. So I think there is an engagement program that we have in place, which includes the institutional meetings, ECM engagement, analyst briefings, and then we have very specific and targeted outreach. So it is a bit of a grind, but it is a work that is in progress, and we are giving ample time to it. Perhaps, Angela, would you like to add something?

Penny Stonier: Being able to make some valid assumptions going forward as to what the market and expectations on pricing is incredibly critical. So there is a fair bit of market understanding, access to management, creating that transparency or providing that transparency, and then most importantly, then us being able to demonstrate through our actions and on our milestones. So I think there is an engagement program that we have in place, which includes the institutional meetings, ECM engagement, analyst briefings, and then we have very specific and targeted outreach. So it is a bit of a grind, but it is a work that is in progress, and we are giving ample time to it. Perhaps, Angela, would you like to add something?

Speaker #4: So, I think there is an engagement program that we have in place, which includes institutional meetings, ECM engagement, analyst briefings, and then we have very specific, targeted outreach.

Speaker #4: So, it is a bit of a grind, but it is work that is in progress, and we are giving ample time to it.

Speaker #4: So perhaps, Angela, do you want to add something?

Speaker #2: And probably just the other thing is that we've got two components. One is all the work that Penny and Mr. Dale described, but as we move into construction, it's really important that we demonstrate that we are a credible organisation—that delivers what we say we're going to do, when we're going to do it.

Angela Bigg: And probably just the other thing is that, we've got two components. One is all the work that Teni and Darryl described, but as we move into construction, it's really important that we demonstrate that we are a credible organization that delivers what we say we're going to do when we're going to do it. And that change in our reporting cycle to the market, I think, will only strengthen our position.

Speaker #2: And that change in our reporting cycle to the market, I think, will only strengthen our position.

Speaker #1: I think one other thing to recognize is there's a lot of work that goes in now for things that might create opportunities down the track.

Peter Sherrington: I think one of the things to recognize is there's a lot of work that goes in now for things that might create opportunities down the track. Some funds will have different investment horizons, and as we get closer to completion of construction and closer to earnings, different groups will be able to look at us and we'll fit within their mandate. There's a lot of work that goes on now to bring those groups in, so as they're briefed when you hit those milestones.

Speaker #1: So some funds will have different investment horizons. And as we get closer to completion of construction and closer to earnings, different groups will be able to look at a simple fit within their mandate.

Speaker #1: So there's a lot of work that goes on now to bring those groups in, so as they're briefed when you hit those milestones.

Speaker #4: Perfect, thank you. Following up on Fed—just to be clear, there are a couple of questions here about when Fed is. We had a call for Fed, which did occur on the 21st of May, with a financial investment decision being made.

[Company Representative] (Arafura): Perfect. Thank you. Following FID, just to be clear, there are a couple questions in here as well, when is FID? We have called FID. That did occur on 21 May, with a financial investment decision being made. Can you please elaborate on any remaining conditions to be satisfied to achieve financial close and that senior debt drawdown? If there's any remaining off-take conditions.

Penny Stonier: Perfect. Thank you. Following FID, just to be clear, there are a couple questions in here as well, when is FID? We have called FID. That did occur on 21 May, with a financial investment decision being made. Can you please elaborate on any remaining conditions to be satisfied to achieve financial close and that senior debt drawdown? If there's any remaining off-take conditions.

Speaker #4: But can you please elaborate on any remaining conditions to be satisfied to achieve financial close and that senior debt drawdown? And then, if there's any remaining offtake conditions.

Speaker #1: Yeah. So I think, in terms of milestones, as Fed has been called, the next critical milestones are contractual close. So, closing out those couple of final credit approvals that are required for contractual close—most lenders are complete and ready to go.

Peter Sherrington: I think in terms of milestones, FID has been called. The next critical milestones are contractual close, so closing out those couple of final credit approvals that are required for contractual close. Most lenders are complete and ready to go, but the whole group have to be ready to execute. Then, the settlement of those strategic investments from the EFA and the German Raw Materials Fund. I think they're probably the most critical milestones that we're working our way through to for the construction to commence.

Speaker #1: But the whole group has to be ready to execute. And then the settlement of those strategic investments from EFA and the German Raw Materials Fund.

Speaker #1: I think they're probably the most critical milestones that we're working our way through to— for the construction to commence.

Speaker #4: Perfect. I've got two questions from Mr. Birch. And this probably relates to a podcaster or most recently running a podcast. We're told construction begins in September, yet your most recent podcast contains commentary suggesting that construction is delayed until next month.

[Company Representative] (Arafura): Perfect. I've got two questions from Mr. Birch, and this probably relates to a podcast Darryl most recently, mining podcast. We're told construction begins in September, yet your most recent podcast contains commentary suggesting that construction is delayed until next month. Can you just clarify? I think that might just be from when it was recorded versus publishing.

Penny Stonier: Perfect. I've got two questions from Mr. Birch, and this probably relates to a podcast Darryl most recently, mining podcast. We're told construction begins in September, yet your most recent podcast contains commentary suggesting that construction is delayed until next month. Can you just clarify? I think that might just be from when it was recorded versus publishing.

Speaker #4: Can you just clarify? I think that might just be from when it was recorded versus when it was published.

Darryl Cuzzubbo: Yeah, that is right. Leigh, I did that podcast in August. When I was referring to construction starting, it is construction starting as I said it would in September. Construction is expected to start in a couple of weeks, in September, which is when we said it would start when we called FID mid-May. It is on track. Mm-hmm.

Speaker #3: Yeah, that's right. So Lee, I did that podcast in August. So when I was referring to construction starting, it's construction starting as I said it would, in September.

Speaker #3: So, construction is expected to start in a couple of weeks. In September, which is when we said it would start, when we called Fed mid-May.

Speaker #3: So it is on track.

[Company Representative] (Arafura): Perfect. I think just a follow-on from that. It has been a long time in the making. Obviously, there was some pre-construction early works that were done in 2022. So 4 years in preparation for this final stage of construction. How should shareholders think about the ability to maintain schedule, and should we be expecting any delays or surprises?

Penny Stonier: Perfect. I think just a follow-on from that. It has been a long time in the making. Obviously, there was some pre-construction early works that were done in 2022. So 4 years in preparation for this final stage of construction. How should shareholders think about the ability to maintain schedule, and should we be expecting any delays or surprises?

Speaker #4: Perfect. And I think, just as a follow-on from that, it has been a long time in the making, obviously. There were some pre-construction early works that were done in 2022.

Speaker #4: So, four years in preparation for this final stage of construction—how should shareholders think about the ability to maintain schedule? And should we be expecting any delays or surprises?

Speaker #3: Yeah. So, Lee, good point. We did that early works a few years ago, and that effectively de-risked our project execution at the start of the project, but probably pulled in the order of six to nine months out of our schedule as well.

Darryl Cuzzubbo: Yeah. Leigh, good point. We did that early works a few years ago, and that effectively de-risked our project execution at the start of the project, but it probably pulled in the order of 6 to 9 months out of our schedule as well. That is why we did it. I am glad that we did that. Just to your question around schedule going forward, this is obviously a complex project in a relatively remote area. There is absolutely project execution risk. The question is, what are we doing about how do we manage that risk? As we mentioned previously, we took the 4 months since FID and the start of construction to go through competitive tender processes to make sure we are getting the best possible pricing for the work.

Speaker #3: So that's why we did it. I'm glad that we did that. Now, just to your question around the schedule going forward, this is obviously a complex project in a relatively remote area.

Speaker #3: So, there is absolutely project execution risk. And the question is, what are we doing about it? How do we manage that risk? So, as we mentioned previously, we took the four months since FID and the start of construction to go through competitive tender processes to make sure we're getting the best possible pricing for the work.

Speaker #3: We've ramped up the team to manage the project, both at the owner's team and also in the EPCM. A lot of work has gone into what's called a project execution plan.

Darryl Cuzzubbo: We have ramped up the team to manage the project, both at the owner's team and also in the EPCM. A lot of work has gone into what is called a project execution plan, to again, de-risk, if you like, the schedule. Then we have still got a lot of work to do around making sure that we can attract the right people, retain them. You do not want turnover in people. From a logistics perspective, logistics is everything. If you want to deliver a project on time and hence on budget, you need to be managing the logistics closely. I would say we understand the project execution risk of a project of this scale and complexity, and we are managing the sort of levers, if you like, to manage that sort of risk.

Speaker #3: To again de-risk, if you like, the schedule. And we've still got a lot of work to do around making sure that we can attract the right people and retain them.

Speaker #3: You don't want turnover in people. And from a logistics perspective, logistics is everything. If you want to deliver a project on time and hence on budget, you need to be managing the logistics closely.

Speaker #3: So I would say we understand the project execution risk of a project of this scale and complexity, and we’re managing the sort of levers, if you like, to manage that sort of risk.

Speaker #4: Yeah, thank you. I'm just trying to sort of combine a couple of questions here—questions regarding any potential future capital raisings and dilution going forward.

[Company Representative] (Arafura): Thank you. I am just trying to combine a couple of questions here. Questions regarding any potential future capital raisings and dilution going forward. Are there any expectations that further capital will be required?

Penny Stonier: Thank you. I am just trying to combine a couple of questions here. Questions regarding any potential future capital raisings and dilution going forward. Are there any expectations that further capital will be required?

Speaker #4: Are there any expectations that further capital will be required?

Speaker #3: Yeah. So right now, right, so we're fully funded. We're focused on construction. So there's no, if you like, work on any capital raises, etc., etc.

Darryl Cuzzubbo: Yeah. Right now, we are fully funded. We are focused on construction, so there is no, if you like, work on any capital raises, et cetera. Right now we are fully funded, and we are focused on building this thing.

Speaker #3: So right now, we're fully funded, and we're focusing on building this thing.

Speaker #4: Okay. The only report refers to potential capital cost reductions of more than 5%. Can you give us a bit more guidance on how these have been identified and whether these opportunities have converted into contracts or quoted savings?

[Company Representative] (Arafura): Okay. The annual report refers to potential capital cost reductions of more than 5%. Can you give us a bit more guidance on how these have been identified and whether these opportunities have converted into contracts or quoted savings? How should we think about those?

Penny Stonier: Okay. The annual report refers to potential capital cost reductions of more than 5%. Can you give us a bit more guidance on how these have been identified and whether these opportunities have converted into contracts or quoted savings? How should we think about those?

Speaker #4: How should we think about those?

Speaker #3: Yeah, so that's actually—I should have mentioned that earlier. It's a good question. Let me make a couple of comments, and Tommy, you jump in, right?

Darryl Cuzzubbo: Yeah. Actually, I should have mentioned that earlier. It is a good question. Let me make a couple of comments, then Tommie, you jump in. Leigh asked a really good question around the project execution risk. There are things that you can absolutely control. One of the things is, we are in an inflationary environment. There is not much we can do about that. What we can do is, how do we offset that inflationary environment? Tommie and his team came up with in the order of AUD 200 million of potential savings on the project. They have been looking at that for probably close to two years now. That includes reducing some of the footprint, changing the pipe rack configuration, changing how we do concrete works. There is quite a range of ideas.

Speaker #3: So Lee asked a really good question around the project execution risk, right? And there are things that you can absolutely control. And one of the things is, if we are in an inflationary environment, there's not much we can do about that.

Speaker #3: But what we can do is look at how we offset that sort of inflationary environment. Tommy and his team came up with in the order of $200 million of potential savings on the project.

Speaker #3: So, they've been looking at that for probably close to two years now. That includes reducing some of the footprint, changing the pipe rack configuration, and changing how we do concrete works.

Speaker #3: It's quite a range of ideas. And that was done as a way to, as we move forward, offset the inevitable cap expressions.

Darryl Cuzzubbo: That was done, as we move forward, as a way to offset the inevitable CapEx pressures. Tommy van der Walt, do you have anything else to add to that?

Speaker #3: Tommy, do you have anything else to add to that?

Speaker #2: No, no. It's exactly what has been happening, and we continue to do that. That's the main point. We continue to optimise our design and see if there are any additional opportunities to make savings that really move the needle for the project, to mitigate any other inflationary pressures.

Tommie van der Walt: No, Daryl Cuzzubbo. It is exactly what has been happening, and we continue to do that is the main point. We continue to optimize our design and see if there is any additional opportunities to make savings that really move the needle for the project to mitigate any other inflationary pressures.

Speaker #3: Why don't I — I forgot to mention with the tailings as well, right? So some good work there, not just lowering upfront capex, but also just the environmental impacts as well.

Darryl Cuzzubbo: One I forgot to mention with the tailings as well. Some good work there, not just lowering upfront CapEx, but also just the environmental impacts as well. It is win-win from both a CapEx and an environmental perspective, and an OpEx perspective. Some really good work has been done by the project team with Hatch in this space.

Speaker #3: So it's win-win from both a CapEx and an environmental perspective, and an OpEx perspective. Some really good work has been done by the project team, with Hatch, in this space.

Speaker #4: Just in regards to your comments about establishing a price index for NdPr, which would clearly be beneficial for the industry, can you tell me if there's any active discussions or work underway on this, or is it more so conceptual?

[Company Representative] (Arafura): Just in regards to your comments about establishing a price index for NdPr, which would clearly be beneficial for the industry. Can you tell me if there is any active discussions or work underway on this, or is it more so conceptual? If you can elaborate on that, Daryl Cuzzubbo, please.

Penny Stonier: Just in regards to your comments about establishing a price index for NdPr, which would clearly be beneficial for the industry. Can you tell me if there is any active discussions or work underway on this, or is it more so conceptual? If you can elaborate on that, Daryl Cuzzubbo, please.

Speaker #4: If you can elaborate on that, Daryl, please.

Speaker #3: Yeah, so I would say it's no longer conceptual, but the job's not done. So we now have two indices: one being reported, one to be reported.

Darryl Cuzzubbo: Yeah. I would say it is no longer conceptual, but the job is not done. We now have two indices, one being reported, one to be reported. You have to call out the US for their leadership in supporting the Benchmark Mineral Intelligence. We now have an index. We have been getting offtakes onto that index. Again, thank you to the US. We have got Traxys North America onto this index, and we have got this Lindian party that Peter referred to on this index. We are advocating getting other offtakes onto this index. The work that still has to happen, though, is that other producers, other projects, and consumers need to continually move volumes onto this index. This index needs to be this independent, transparent, what we call seaborne index, needs to become the primary index.

Speaker #3: And you've got to call out the US for their leadership in supporting the benchmark Windows intelligence. So we now have an index, and we have been getting offtakes onto that index.

Speaker #3: And again, thank you for the US. So, we've got US tracks that set onto this index, and we've got this Indian party that Peter referred to on this index.

Speaker #3: And we are advocating getting other offtakes onto this index. The work that still has to happen, though, is that other producers' other projects and consumers need to continually move volumes onto this index.

Speaker #3: So, this index—I mean, this index needs to be this independent, transparent, what we call seaborne index—needs to become the primary index. And the only way that happens is by having other projects, producers, and consumers, customers, getting their volumes off that index.

Darryl Cuzzubbo: The only way that happens is by having other projects, producers, and consumers, customers, getting their volumes off that index. Still work to do, but I think we are making great headway.

Speaker #3: There's still work to do, but I think we're making great headway.

[Company Representative] (Arafura): Obviously, with the recent capital raisings, we have quite a few new shareholders on our register, a lot of which are retail as well. Can you just provide for some of these shareholders, I have got a couple of questions in this vein. Can you please differentiate the ore-to-oxide strategy that Arafura have adopted? The reason why I am elaborating on this is probably because some questions have asked whether our concentrate will go to Iluka or Lynas or other

Penny Stonier: Obviously, with the recent capital raisings, we have quite a few new shareholders on our register, a lot of which are retail as well. Can you just provide for some of these shareholders, I have got a couple of questions in this vein. Can you please differentiate the ore-to-oxide strategy that Arafura have adopted? The reason why I am elaborating on this is probably because some questions have asked whether our concentrate will go to Iluka or Lynas or other

Speaker #4: We have a couple, obviously, with the rates and capital raisings. We have quite a few new shareholders on our register, a lot of which are retail as well.

Speaker #4: Can you just provide for some of these shareholders? I've got a couple of questions in this vein. Can you please differentiate the auto oxide strategy that Arafura have adopted?

Speaker #4: The reason I am sort of elaborating on this is probably because some questions have asked whether our concentrate will go to our local or Lynas or other parties for processing.

[Company Representative] (Arafura): parties for processing. Perhaps if you can just touch on, again, just for the benefit of those listening, the fully integrated single site ore-to-oxide strategy that is exclusive of other-

Penny Stonier: parties for processing. Perhaps if you can just touch on, again, just for the benefit of those listening, the fully integrated single site ore-to-oxide strategy that is exclusive of other-

Speaker #4: So perhaps if you can just touch on again, just for the benefit of those listening, the fully integrated, single-site auto oxide strategy that is sort of exclusive of other participants in the market.

Darryl Cuzzubbo: Yeah

[Company Representative] (Arafura): participants in the market.

Penny Stonier: participants in the market.

Speaker #3: Yeah. So this is—I mean, this really goes to the heart of what differentiates us. So if you look at pretty much across the globe, we are the only project that's of its kind—that's in construction.

Darryl Cuzzubbo: Yeah. This really goes to the heart of what differentiates us. If you look pretty much across the globe, we are the only project that is ore-to-oxide that is in construction. Why is this ore-to-oxide important? There are really three reasons for that. Most rare earths projects, they go to a concentrate. They process to a concentrate, or they process to a mixed rare earths carbonate. But we take it one step further and process to an oxide. We do that for three reasons. Firstly, if you really want your product to go to any company in any country, and hence bypass China, you have got to go to an oxide. You are not dependent on China.

Speaker #3: So why is this auto oxide important? And there are really three reasons for that. So most rare earth projects go to a concentrate—they're processed to a concentrate.

Speaker #3: Or they're processed to a mixed rare earth carbonate. But we take it one step further and process to an oxide. We do that for three reasons.

Speaker #3: Firstly, if you really want your product to go to any company in any country and hence bypass China, you've got to go to an oxide.

Speaker #3: So you're not dependent on China. So we've taken that strategy, and because of that, that is why we've got so much multi-government support for our project—more than any other rare earth project that I know of.

Darryl Cuzzubbo: We have taken that strategy, and because of that is why we have got so much multi-government support for our project, more than any other rare earths project that I know of. But the second reason we have done it is rare earths is found with radionuclides. It is only when you go to oxide, and you separate out the oxide, that you also separate out the radionuclides. What that means is everything that leaves our site is free from a radiation perspective. If you only go to a concentrate or a carbonate, you have got the radionuclide issue and transportation of that. You are relying on another company in another country to be able to receive a product that has got radionuclides in it, and that is very, very limited. You have got very, very limited options.

Speaker #3: But the second reason we've done it is that rare earths are found with radionuclides. And it's only when you go to oxide and you separate out the oxide that you also separate out the radionuclides.

Speaker #3: So what that means is, everything that leaves outside is free from a radiation perspective. If you only go to a concentrate or a carbonate, you've got the radionuclide issue and transportation of that.

Speaker #3: So you're relying on another company in another country to be able to receive a product that's got radionuclides in it, and that is very, very limited.

Speaker #3: You've got very, very limited options. But the third reason is everything is done—and I think Peter alluded to this earlier—everything is done on the one site.

Darryl Cuzzubbo: But the third reason is everything is done, and I think Peter alluded to this earlier, everything is done on the one site. That gives us significant cost benefits. As Peter said, you process it on the one site, you put your tailings back on the one site. There is no transportation. There is no transportation of intermediate products. You compare it to a processing hub such as Iluka. We have got very low-cost mine supply at the door of the process plant. We have got a very structurally, if you like, advantageous cost position. One, because we are all on the one site, but secondly, because we are a phosphate-hosted ore body, which means we can generate phosphoric acid from the ore body, which we use in the process, and we sell the excess as byproduct credits.

Speaker #3: That gives us significant cost benefits. So, as Peter said, you process it on the one site. You put your tailings back on the one site.

Speaker #3: There's no transportation. There's no transportation of intermediate products. You compare it to a processing hub such as Aluka. We've got very low-cost mine supply at the door of the process plant.

Speaker #3: So, we've got a very structurally, if you like, advantageous cost position. One, because we're all on the one site, but secondly, because we are a phosphate-hosted ore body, which means we can generate phosphoric acid from the ore body, which we use in the process.

Speaker #3: And we sell the excess as by-product credits. So with all of that, we end up going from what would otherwise have been the middle of the global cost curve to down to the bottom of the cost curve.

Darryl Cuzzubbo: So with all of that, we end up going from what would otherwise have been the middle of the global cost curve down the bottom of the cost curve.

Speaker #4: Negatives. That was quite thorough. Any thoughts on Elon Musk's recent comments about $1 billion robots by 2030? I think some other market observers had sort of said 2050 and late '30s, but your thoughts, and how could that impact?

[Company Representative] (Arafura): That was quite thorough. Any thoughts on Elon Musk's recent comments about 1 billion robots by 2030? I think some other market observers had said 2050 and late 2030s. Your thoughts and how could that impact that?

Penny Stonier: That was quite thorough. Any thoughts on Elon Musk's recent comments about 1 billion robots by 2030? I think some other market observers had said 2050 and late 2030s. Your thoughts and how could that impact that?

Speaker #3: So we say bring it on, right? So let me add some color to that. So firstly, I mean, who knows what the forecast is, but what I can say is if you look at rare earth, it has got significant structural demand growth for at least three decades.

Darryl Cuzzubbo: We say bring it on, right? Let me add some color to that. Firstly, who knows what the forecast is? What I can say is if you look at rare earths, it has got significant structural demand growth for at least three decades. What other commodity can you say has demand growth for three decades? We have been saying consistently for the last five years or more that we expect demand growth to double in the next 10 years, and that has proven to be a very sound forecast. If anything, what we are seeing now is that the takeup of EVs starting to escalate. China already sells more EVs and plug-in hybrids than conventional vehicles. Just last month in Australia, EVs and plug-in hybrids actually overtook conventional vehicles. We are going through this tipping point.

Speaker #3: Now, what other commodity can you say has had demand growth for three decades? We've been saying consistently for the last five years or more that we expect demand growth to double in the next ten years.

Speaker #3: And that has proven to be a very sound forecast. If anything, what we're seeing now is that the take-up of EVs is starting to escalate.

Speaker #3: So China already sells more EVs and plug-in hybrids than conventional vehicles. And just last month in Australia, EVs and plug-in hybrids actually overtook conventional vehicles.

Speaker #3: So this tipping we're going through this tipping point. So you can see EV sales are increasing. And the forecasts on robotics, humanoid robotics, we've continued I think to underestimate that demand growth.

Darryl Cuzzubbo: You can see EV sales are increasing and the forecasts on robotics, humanoid robotics, we have continued, I think, to underestimate that demand growth. This is significant because a typical humanoid robotic uses the same amount of rare earths as one EV. You can see how robotics will ultimately be a much bigger consumer of rare earths than EVs. I think who knows what the forecast is. It all bodes very, very well for rare earths. If you look at rare earths from a substitution perspective, in EVs, if you want to go to a different type of non-rare earth permanent magnet motor, the substitution price for rare earths is an order of magnitude more than what the rare earths pricing is today. If you see the structural supply deficit hit for NdPr, you would expect to see quite a significant shift in NdPr pricing.

Speaker #3: And this is significant because a typical humanoid robotic uses the same amount of rare earths as one EV. So you can see how robotics will ultimately be a much bigger consumer of rare earths than EVs.

Speaker #3: So I think it's, who knows what the forecast is, but it all bodes very, very well for rare earths. And if you look at rare earths from a substitution perspective in EVs, if you want to go to a different type of non-rare earth permanent magnet motor, the substitution price for rare earths is an order of magnitude more than what the rare earth pricing is today.

Speaker #3: So, if you see the structural supply deficit hit the NDPI, you would expect to see quite a significant shift in NDPI pricing, which is why we want this index.

Darryl Cuzzubbo: Which is why we want this index. This is why we want the seaborne index to reflect market fundamentals.

Speaker #3: This is why we want the Seaborne Index to reflect market fundamentals.

Speaker #4: Yes, I think we have time for maybe two more questions before we wrap up. One of our long-term shareholders has commented in regards to the pro forma cash position of approximately $1.4 billion.

[Company Representative] (Arafura): Yeah. I think we have time for maybe two more questions before we do wrap up. One of our long-term shareholders has commented in regards to the pro forma cash position of approximately AUD 1.4 billion. This will be post all the capital raisings and settlement of the outstanding equity subscription agreements in NRF. Looking at where some of the underwriters of our recent transactions have got our price forecast of AUD 0.35 and AUD 0.40, how will management take real ownership of this share price discrepancy between current trading performance and if you look at a cash back, sort of where that variation is to current trading price? I think you have addressed quite a few of these aspects, Darryl. I think one thing I would like to clarify, our current cash position at that 30 June, the cash position was AUD 723 million.

Penny Stonier: Yeah. I think we have time for maybe two more questions before we do wrap up. One of our long-term shareholders has commented in regards to the pro forma cash position of approximately AUD 1.4 billion. This will be post all the capital raisings and settlement of the outstanding equity subscription agreements in NRF. Looking at where some of the underwriters of our recent transactions have got our price forecast of AUD 0.35 and AUD 0.40, how will management take real ownership of this share price discrepancy between current trading performance and if you look at a cash back, sort of where that variation is to current trading price? I think you have addressed quite a few of these aspects, Darryl. I think one thing I would like to clarify, our current cash position at that 30 June, the cash position was AUD 723 million.

Speaker #4: This will be post all the capital raisings and settlement of the outstanding equity subscription agreements and NRSC. So, looking at where some of the underwriters of our recent transactions have got our price forecasts of $0.35 and $0.40, how will management take real ownership of this share price discrepancy between current trading, performance, and if you look at a cashback, sort of where that variation is to current trading price?

Speaker #4: I think before you, I think you've addressed quite a few of these aspects, Darryl. I think one thing I'd like to clarify is our current cash position. As at 30 June, the cash position was $723 million Australian, with $186 million settling post that period.

[Company Representative] (Arafura): With 186 settling post that period. From a cash value perspective, we do have a slight equity value premium associated with the Nolans project. I think getting that realization between where we are currently trading now and perhaps those price targets, how do we see that we can actually deliver that value and recognize that future value?

Penny Stonier: With 186 settling post that period. From a cash value perspective, we do have a slight equity value premium associated with the Nolans project. I think getting that realization between where we are currently trading now and perhaps those price targets, how do we see that we can actually deliver that value and recognize that future value?

Speaker #4: So from a cash value perspective, we do have a slight equity value premium associated with the Nolan's project. But I think, in terms of getting that realization between where we are currently trading now and perhaps those price targets, how do we see that we can actually deliver that value and recognize that future value?

Speaker #2: Yeah. So, I suppose the cashback value is probably about 0.14 or 0.15, I think. We can debate what the number is. It's still not good enough, I suppose.

Peter Sherrington: Yeah. I suppose the cash back value is probably about 0.14 or 0.15, I think. We can debate what the number is. It is still not good enough, I suppose. The point that should be made is that we recognize that we need to have more value ascribed to the enterprise rather than to the cash position.

Speaker #2: But the point that should be made is that we recognize we need to have more value ascribed to the enterprise, rather than just the cash position.

Speaker #2: And so, we've got to work harder to get our message out to the market. I think part of the challenge has been the pullback, almost on a sector basis, perhaps.

Peter Sherrington: We have got to work harder to get our message out to the market. I think part of the challenge has been the pullback almost on a sector basis, perhaps. We noticed when the June quarterly and the June financial statements for Miners were lodged that there was a pullback in their share price. Probably a recognition that prices were high, so people were waiting to see how those results looked and then probably, perhaps money moving from the sector to other things where they thought there was more volatility to come. That is an observation. It is not an excuse. We have got to work harder to ascribe more value to the project. I think we would not debate that with shareholders, no.

Speaker #2: We noticed when the June quarterly and the June financial statements were lodged that there was a pullback in their share price.

Speaker #2: Probably a recognition that prices were high, so people were waiting to see how those results looked. And then, probably, perhaps money moved from the sector to other things where they thought there was more volatility to come.

Speaker #2: So that's an observation; it's not an excuse. We've got to work harder to ascribe more value to the project. I think there's no—we wouldn't debate that with the shareholders, no.

[Company Representative] (Arafura): No. Thank you.

Penny Stonier: No. Thank you.

Speaker #2: And the shareholder would agree.

Peter Sherrington: Shareholders agree.

Speaker #4: Okay, quite a few more questions have come through—those that we haven't been able to answer now. We will come back through and provide some responses.

[Company Representative] (Arafura): Okay. Quite a few more questions have come through. Those that we have not been able to answer now, we will come back through and provide some responses. I think just a couple more, Peter, and I will call them out again. We have got experts from Germany, automotive experts, and a couple others just wishing you the very best for your future. Again, expressing their gratitude for all the work that has been done up to date. So, again, from quite a few of our shareholders here, many thanks to you.

Penny Stonier: Okay. Quite a few more questions have come through. Those that we have not been able to answer now, we will come back through and provide some responses. I think just a couple more, Peter, and I will call them out again. We have got experts from Germany, automotive experts, and a couple others just wishing you the very best for your future. Again, expressing their gratitude for all the work that has been done up to date. So, again, from quite a few of our shareholders here, many thanks to you.

Speaker #4: I think just a couple more, Peter, and I will call them out again. We've got experts from Germany—automotive experts—and a couple of others just wishing you the very best for your future.

Speaker #4: And again, expressing their gratitude for all the work that has been done to date. So, again, from quite a few of our shareholders here, many thanks to you.

Speaker #2: Thanks, everyone. Thanks. And to Darryl for the kind comments at the start—I appreciate that. Thank you.

Peter Sherrington: Thanks, everyone. Thanks for those, and Daryl Cuzzubbo, for the kind comments at the start. Appreciate that. Thank you.

Speaker #4: Darryl, I might just hand back to you to wrap up.

[Company Representative] (Arafura): Darryl Cuzzubbo, turn back to you to wrap up.

Penny Stonier: Darryl Cuzzubbo, turn back to you to wrap up.

Speaker #3: No worries. Thanks, Penny. And look, thanks again, everyone, for your time and your questions today. We really are at an exciting, defining point for the company.

Darryl Cuzzubbo: No worries. Thanks, Penny. Thanks again, everyone, for your time and your questions today. We really are an exciting defining point for the company, and I look forward to, with the team, giving you a further update at our upcoming AGM as we move rapidly into construction. Thanks again, and until then, stay safe.

Speaker #3: And I look forward to with the team giving you a further update at our upcoming AGM as we move rapidly into construction. Thanks again, and until then, stay safe.

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Q4 2026 Arafura Rare Earths Ltd Earnings Call

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Arafura Rare Earths

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