ASX RELEASE

10 March 2017

ASX: ARU

AN EMERGING RARE EARTHS PRODUCER FOR USERS WORLDWIDE

NEXT PHASE OF NOLANS PILOT PROGRAM UNDERWAY
  • World-renowned expert appointed to assist in optimising Nolans phosphate digestion and phosphoric acid production
  • Phosphoric acid by-product to enhance overall project value
  • Arafura to progress pilot testing following successful capital raising
Arafura Resources Limited (ASX: ARU) ("Arafura" or "the Company") is pleased to announce it has engaged leading phosphoric acid expert Prayon Technologies ("PRT") to provide specialist support as it progresses the next phase of final piloting for its 100 per cent-owned Nolans Neodymium-Praseodymium ("NdPr") Project in the Northern Territory.

Part of the broader Prayon group which has more than 50 years' experience in designing and operating phosphoric acid manufacturing plants around the world, PRT will provide expert advice on the operation of the Company's phosphate extraction pilot plant. This pilot program will extract phosphate from Nolans concentrate produced from the beneficiation pilot plant and produce phosphoric acid as a value-enhancing by-product.

PRT technical representatives will work with Arafura to analyse and interpret engineering and operational data from the pilot program, with the findings to be incorporated into the project's final feasibility study.

The appointment of PRT for the phosphate extraction pilot plant follows the completion of a A$3.6 million capital raising in February (ASX: ARU 20/2/17) which was well supported by institutional and sophisticated investors in North America, Hong Kong and Australia.

Arafura Managing Director Gavin Lockyer said, "The recent interest shown in the Company by institutional investors has given us the confidence to commence this next phase of our final feasibility study.

"The next five phases of piloting require significant capital spend and the funds raised via the Placement, together with the anticipated inflow from the current Share Purchase Plan, will enable us to confidently complete this work to a sensible break point in the flow sheet.

"Our ability to produce phosphoric acid as a by-product at Nolans provides Arafura with a natural advantage over other rare earth projects as it will reduce the overall operating cost per kilogram of NdPr produced."

Piloting of the phosphate extraction process as a continuous closed loop aims to demonstrate the robustness of the phosphate extraction flowsheet and its optimised operating conditions for the project's rare earths-rich, high-phosphate concentrate ("HPC").

ARAFURA RESOURCES LIMITED

arafura@arultd.com www.arafuraresources.com.au ABN 22 080 933 455

PERTH: Level 3/263 Adelaide Tce, Perth WA 6000 | PO Box 5773, St Georges Tce, Perth WA 6831 T: +618 6210 7666

DARWIN: 18 Menmuir St, Winnellie NT 0820 | PO Box 37220, Winnellie NT 0821 T: +618 8947 5588 F: +618 8947 5599

The flow sheet for the phosphate extraction circuit, which is part of the project's Extraction Plant, is illustrated in Figure 1.

PHASE 2

Phosphoric Acid Recycle

Sulfuric Acid Mixed Acid

HIGH-PHOSPHATE CONCENTRATE

(HPC)

PRE-LEACH

WASH

RE RECOVERY

WASH

REGENERATION

WASH

SOLID/LIQUID L

SEPARATION S

SOLID/LIQUID L

SEPARATION S

SOLID/LIQUID L

SEPARATION S

Phosphoric Acid Bleed

Pre-Leach Residue (PLR)

Figure 1: Phosphate Extraction Circuit

RE Recovery Precipitate

Gypsum

Nolans HPC leached in phosphoric acid produces pre-leach residue and, following filtration, a rare earth phosphate precipitate is also recovered. The current (Phase 2) and subsequent phases of the Nolans pilot program are shown in Figure 2.

PHASE 1

Beneficiation

PHASE 2

Phosphate Extraction (PLR and RE Recovery Precipitate)

PHASE 3

Bulk Pre-Leach (PLR)

PHASE 4

Acid Bake of PLR and RE Recovery Precipitate

PHASE 5

Water Leach, RE Sulfation and Purification

PHASE 6

RE Dissolution and Crystallisation

Cerium Product RE Chloride

Intermediate Product

Figure 2: Nolans Pilot Program

Each phase is operated on a continuous basis

Design and fabrication of vessels for the phosphate extraction pilot plant is in progress at SGS Australia in Perth, which is hosting and managing the pilot program. The plant is expected to operate on a continuous basis during March.

Considerable batch test work on the phosphate extraction process has been undertaken at SGS, and the optimum processing conditions for the piloting operation are currently being finalised using HPC produced from the validated beneficiation pilot.

- ENDS -

For further information, contact: Media enquiries:

Gavin Lockyer Luke Forrestal

Managing Director Media and Capital Partners

T: +61 8 6210 7666 M: +61 411 479 144

Arafura Resources Ltd. published this content on 10 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 10 March 2017 01:20:16 UTC.

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