Resource Capital Research releases report on Arafura Resources February 9, 2012

Resource Capital Research has released today an updated research report on Arafura Resources Limited (ASX:ARU).

According to the report, Arafura is undertaking crucial product marketing programs with magnet grade REO products now being produced from its demonstration plants.

We expect to see new offtake agreements cemented in coming months, which should boost investor confidence and highlight the stock’s current undervaluation.

Investment Points:

• World-class rare earth element (REE) deposit at Nolans Bore, with total resources of 30.3mt and first production possible in late 2014 after extended BFS.
• Mine life +20 years with production of 20ktpa rare earth oxides (REO), plus phosphate, uranium, gypsum.
• The extended BFS likely to be completed in 4Q12 subject to completing the delayed A$70m capital raising to fund the BFS.
• Expanded JORC resource is due by end Feb ’12.
• Letter of Intent with German giant ThyssenKrupp for product sales and financing assistance is a major credibility and confidence boost for the project.
• Demonstration plants now operating and confirming concentrate production and REO separation technology.
• Key milestones reached – first REO customer samples have been produced, customer marketing now underway to cement further offtake agreements.
• Our Nolans Project valuation of A$2,192m implies NAV A$1.69/sh. assuming REO blend value of US$40/kg price (current US$107/kg) and full dilution from A$475m project equity raised.

Click here to view the full report

For further information, please contact:

www.rcresearch.com.au