Arafura Rare Earths (ARU) Q3 2025 earnings summary

Executive summary

• Progress continues toward final investment decision (FID), with equity funding as the last major hurdle after securing required debt.

• Secured A$200 million cornerstone investment from National Reconstruction Fund Corporation for Nolans Project, advancing equity funding strategy toward FID.

• Multiple cornerstone investors are engaged, providing several pathways to a fully funded solution and reducing risk.

• Signed binding offtake agreement with Traxys Europe SA for up to 300tpa NdPr oxide, reaching 66% of binding offtake target.

• Project schedule has been adjusted, extending the FID timeline and pushing out the financial runway to Q1 2026.

Financial highlights

• AUD 200 million secured from the National Reconstruction Fund as cornerstone equity.

• Cash outflows from recurring activities reduced to ~A$2.5 million/month from ~A$3.3 million/month in prior quarter.

• Net cash used in operating activities for the quarter was A$7.3 million; cash and cash equivalents at quarter end A$37.2 million (down from A$44.9 million at 31 December 2024).

• Estimated quarters of funding available: 4.8, based on current cash and outgoings.

• One-off cost of A$4.1 million to be recognized in June 2025 due to construction camp contract termination.

Outlook and guidance

• FID timeline extended beyond the first half of the year, with updated guidance expected as funding milestones are achieved.

• FID for Nolans may extend beyond H1 2025 as alternative funding structures, including a potential JV, are evaluated.

• Four-month ramp-up period required post-FID before construction, extending execution schedule from 37 to 41 months.

• Management remains confident in achieving FID by year-end, citing strong investor engagement and favorable market conditions.

• Company expects further reduction in recurring cash outflows following operational expenditure review.