• Arafura signs binding term sheet with NRFC for A$200m investment
• Investment through convertible notes with 7-year conversion period
• Convertible at 40% premium to future equity raising reference price
• Expected to be a catalyst for additional equity funding for Nolans Project
• Milestone in securing government-seeded funds for value-add in resources

Arafura Rare Earths Limited (ASX: ARU) has announced that it has signed a binding term sheet with the National Reconstruction Fund Corporation (NRFC) for a A$200 million investment commitment to support the development of the Nolans Project. The investment will be made through the issue of unsecured convertible notes with a total tenor of 15 years and a conversion period of seven years (non-convertible for the first two years). During the conversion period, the convertible notes will accrue interest at the rate of 3-month Bank Bill Swap Yield (BBSY) plus 3.0 percent per annum, payable quarterly by the issue of new shares or by capitalizing the interest into the face value. The convertible notes will be convertible at a fixed price representing a 40 percent premium to the reference price, which will be determined by the future equity raising required to fully fund and develop the Nolans Project. The NRFC investment is expected to be a catalyst for additional equity funding for the Nolans Project and attract further strategic investment to deliver Australia's first ore-to-oxide rare earths processing operation.

The NRFC investment of A$200 million will support the development of the Nolans Project.

The NRFC investment is expected to be a catalyst for additional equity funding for the Nolans Project and attract further strategic investment to deliver Australia's first ore-to-oxide rare earths processing operation.