What did Arafura Rare Earths (ASX:ARU) announce regarding its capital raising?

Arafura Rare Earths launched a major A$350 million two-tranche institutional placement to fund its Nolans Project. The company is issuing roughly 1,346.2 million new ordinary shares at an offer price of A$0.260 per share. Tranche 1 will raise A$175.5 million, while Tranche 2 requires shareholder approval to raise A$174.5 million.

Why is Arafura Rare Earths (ASX:ARU) raising A$350 million?

The capital raising is designed to fully secure the equity component required for the development of Arafura's Nolans Project. This milestone follows the company’s Final Investment Decision (FID) for the project.

What does this capital raising mean for existing Arafura (ASX:ARU) retail shareholders?

Existing retail investors face share dilution due to the massive influx of 1,346.2 million new institutional shares. However, Arafura is launching a Share Purchase Plan (SPP) allowing eligible shareholders to buy up to an extra A$25 million in shares. This SPP will be offered at the same placement price of A$0.260 per share.

How is Gina Rinehart's Hancock Prospecting participating in the Arafura (ASX:ARU) placement?

Hancock Prospecting, Arafura’s largest shareholder, has committed A$85 million to subscribe for 326.9 million new shares within the placement. Upon completion, Hancock will hold an estimated 17.5% stake in the company. This major cornerstone commitment heavily de-risks the capital raise for other institutional participants.

Is the Arafura Rare Earths (ASX:ARU) institutional placement underwritten?

Yes, the institutional placement is fully underwritten, excluding the A$85 million commitment from Hancock Prospecting. Having an underwritten deal guarantees that Arafura will secure the targeted A$350 million regardless of broader market volatility during the bookbuild. This provides significant funding certainty for the construction phase of the Nolans Project.

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Arafura launches $350M institutional placement

Written by Heidi Cuthbert Published May. 22 2026Last Updated May. 22 2026

Arafura Rare Earths (ASX:ARU) has launched a major $350 million two-tranche institutional placement to fully fund the equity component required for its Nolans Project.

The placement will see the issuance of approximately 1,346.2 million new fully paid ordinary shares at an offer price of $0.260 per share.

Tranch 1 aims to raise approximately $175.5 million, while Tranche 2, which is subject to shareholder approval, is expected to bring in $174.5 million.

The capital raising has received strong backing from Arafura’s largest shareholder, Hancock Prospecting.

Hancock has committed to subscribing for approximately $85 million (326.9 million new shares), which will result in the company holding an estimated 17.5% interest in Arafura upon completion.

Excluding the Hancock commitment, the institutional placement is fully underwritten.

Arafura is undertaking a share purchase plan for eligible existing shareholders to raise up to an extra $25 million at the same offer price.

The financial milestone follows the company’s final investment decision for the Nolans Project and a non-binding letter of support from EFA under the Critical Minerals Strategic Reserve.

Combined with $430 million from binding equity commitments from GRMF, EFA, and the NRFC, alongside $481 million raised in late 2025, this placement ensures the Nolans Project's equity component is fully secured.

Upon settlement, Arafura will boast a pro forma cash balance of approximately $611 million.