Operator: Thank you for standing by, and welcome to the Arafura Rare Earths Limited December 2025 Quarterly Report Investor Call. [Operator Instructions] I would now like to hand the conference over to Mr. Darryl Cuzzubbo, Managing Director and CEO. Please go ahead.

Darryl Cuzzubbo: Thank you, Kylie, and good morning, ladies and gentlemen, and thank you again for joining us for our quarterly update. I'm sure we've engaged with many of you already, but for anyone new my name is Darryl Cuzzubbo, your Managing Director. Again, with me today is Peter Sherrington, our CFO, who again, most of you would be very familiar with. But also joining us today is Tommie van der Walt. Tommie joined us about 12 months ago. He is our Chief Project Officer, and he'll become a regular attendee as we move through FID and into construction. Similar to previous updates, what I'd like to do is just talk a little bit about the macroeconomic developments that we see that are shaping the future direction of the rare earth sector. I'll then talk to how we are going in finalizing the last 10% of the funding with our cornerstone investors that will enable us to call FID. I'll then hand over to Peter, and Peter is going to take us through where we sit from an overall funding perspective. So you can see just how close we are. And then we're going to wrap up with Tommie, who will provide a brief update on our readiness to execute the project soon after calling FID. And then we'll open up to Q&A. So let me first talk about the macroeconomic dynamics that we see at play. So whilst the situation is dynamic, there are a couple of underlying fundamentals that will continue to shape that -- to shape what we see playing out. If I just take you back in time, last April, China introduced export control constraints where China could control who got what rare earths into what region and for what use. These controls remain in place today and provide China the ability to control with precision who does and does not get access to rare earths. They have set themselves up to control rare earths supply in a very targeted manner. China subsequently introduced further export constraints last October, but these will wound back to just those constraints that were introduced in April last year when a 12-month truce was agreed to between the U.S. and China. Now whilst this truce resulted in reduced speculation as to what is at stake should rare earths not be available, the reality is that nothing has structurally changed with respect to an ex-China supply of rare earths. China still controls today nearly 90% of the world supply and will use this bargaining chip as and when they need to until the world diversifies the rare earths supply chain, which is going to take a number of years. You just can't unravel quickly what took the Chinese 3 decades to establish. In this period, we have seen rare earths pricing continue to firm to where just last weekend, the NdPr pricing pushed through the $100 a kilo barrier on the Asian Metals Index. This represents greater than an 80% increase in the last 12 months. It is also worth noting that the world's first ex-China pricing by BMI is consistently higher than the Asian Metals Index, most recently by a further $10 a kilo. This shift has occurred post the announcement of the Mountain Pass deal where the U.S. government introduced a floor pricing of $110 a kilo and post the supply disruptions with Mountain Pass FEED no longer going to China to be processed. The recent event where China stopped exporting dual-use rare earths to Japan further highlights China's readiness to use this bargaining chip as they need, and you would expect China to prioritize their domestic consumption of rare earths over exports should there be a structural NdPr supply deficit, which a number of forecasters are predicting in the medium term. During all of this, we've also observed in our dealings directly with customers that they recognize the need to move away from the Asian Metals Index pricing as this has been the mechanism by which China has prevented a rest of world rare earth supply chain being developed. We note that S&P, a highly regarded global forecaster are, in addition to BMI, now looking to introduce their own ex-China rare earths pricing index. We've seen our own Australian government play a key role here through the U.S. Australia Critical Minerals Framework and the Critical Minerals Strategic Reserve, not only supporting the rare earth sector in Australia and their trading partners, but also potentially introducing a different pricing mechanism, which helped us move to a global functioning market price index. Independent forecasters anticipate that a functioning market index will be in the $140 to $160 a kilo range, reflecting the true fundamentals of medium-term supply scarcity and the strategic value of having a reliable rare earth supply chain. You can see that as time goes on, the establishment of an independent and transparent NdPr index is looking increasingly likely. Now I call these developments out because whilst exactly how geopolitics will unfold is uncertain, there are a couple of things that we can be confident of. Firstly, China will continue to use their tremendous bargaining chip of rare earth supply as and when they need to and have set themselves up to do precisely this. This is going to continue for some time, knowing that it will take years to structurally address the lack of diversification in the rare earth supply chain. As geopolitical tensions inevitably resurface, we can expect elevated investor attention to return to the rare earth sector. So in other words, there is still much to play out in the rare earth sector. Secondly, what I want to emphasize the most is that pricing dynamics are improving, and I am confident that with the right and continued geopolitical support, we will ultimately see a market functioning price index established. Critically, we believe rare earths pricing will move to a higher level that reflects the underlying fundamentals. This is something that is important to us, as you can imagine, because it really is the biggest value driver for your company and something that we are acutely conscious of as we look to lock in the remaining cornerstone offtake agreements. So let me now turn to providing you with our funding update. We have made significant progress with cornerstone investors where due diligence and documentation is in an advanced phase for EFA, the National Reconstruction Fund and the German Raw Materials Fund for an initial EUR 50 million, noting that with the German Raw Materials Fund, a potential second EUR 50 million is subject to a separate decision post locking in a further 500 tonnes of offtake. This has taken a little longer than we had anticipated, but we need to recognize that we are one of the first projects to progress through these newly established government seeded processes. You can be assured that we are progressing this as quickly as possible as demonstrated by the fact that we are either the first or the second project in a long list of projects to progress through these three newly established funding mechanisms. As we round out the funding offtakes, we want to essentially achieve two outcomes. We want to secure the remaining equity with long-term cornerstone investors as fast as possible so we can call FID and get moving into construction. The second outcome is we want to secure as favorable pricing terms as we can for the remaining offtakes, knowing that customer preparedness to move away from the Asian Metal Index is growing with time. The pricing terms that we get today is better than the pricing terms we could have got just a few months ago. And the reality is that this trend is likely to continue. What I'm saying here is that whilst calling FID will be the most significant catalyst for the company in its history. The value of the company will, to a large degree, be defined for the next decade or so by the 7-year contract pricing terms that we are negotiating now. We literally have half a dozen pathways to close out funding. With 90% funding locked in, the question is no longer about whether we will achieve FID or not, but rather are we getting the best possible terms for our offtakes in securing the remaining equity. Faced between closing out funding and offtake agreements quickly versus negotiating hard for a couple of months longer to secure best pricing terms, we will choose the latter given the long-term benefit for the company. Now with that said, we are targeting the end of this quarter to finalize the necessary agreement, which will then enable us to seek shareholder approval next quarter and call FID. I can assure you that we are doing everything we can to secure the best possible terms as quickly as we can, so we could all move on to why we joined the company, which was to build and operate what will be a truly Australian iconic project. With that, now I'll hand over to you, Peter. Thank you.

Peter Sherrington: Thanks, Darryl. So Darryl has already set out that it's been a pretty significant period for the geopolitical focus and the impact on rare earths. And there's also been a lot of rare earth corporate activity. So this has been an incredibly busy period for the Arafura team. And we've been successful in making substantial progress in executing the Nolans funding strategy, which I'll cover off in this session. To frame the discussion, I'll refer back to Figure 2 in the quarterly, which is the Nolans Funding Bridge. The Figure 2 graphic sets out the funding strategy for Nolans Project. If you refer to the stacked column on the right-hand side, you can see the company has a total funding requirement of USD 1.6 billion. This cost is substantially made up of the capital cost for construction, but also includes working capital, the financing costs during ramp-up and also the equity-backed component of the cost overrun account. In addition to the total funding requirement of USD 1.6 billion, we have in place completion support facilities of USD 280 million. These remain undrawn under our base case scenario, but it does provide us with total funding sources of USD 1.9 billion. If you've followed the Nolans funding strategy from previous presentations and quarterlies, you'll see that we have now made material progress and addressed specifically the public markets component of the funding solution, which I'll touch on shortly, and have during the quarter, substantially progressed the due diligence and final documentation with our cornerstone investors as already set out by Darryl. This included the announcement by the Australian Prime Minister of conditional approval of up to USD 100 million of equity investment by equity -- by EFA. Indicatively, these sources of cornerstone funding that Darryl has set out leave approximately USD 134 million outstanding, and we're working with multiple pathways being progressed to close out the remaining equity requirement in the near term. As already set out, one pathway includes additional investment by the German Raw Materials Fund. We are seeking to capitalize on favorable magnet FEED market conditions as outlined by Darryl. We've seen an increase in our engagement with European and German partners, in particular, as we look to secure an additional 500 tonnes per annum of NdPr offtake to support a potential further investment by the German Raw Materials Fund. Noting that any further investment from the German Raw Materials Fund would be conditional on securing that 500 tonnes of offtake, it would also require approval by the Interministerial Council. With respect to the debt facilities, excluding ING, all credit approvals are current with EDC refreshing their credit approval during the December quarter. ING have provided a letter of support and are working to finalize their credit approval in conjunction with contractual close of the debt facilities and FID. Those activities are underway now with ING. We saw positive share price momentum through October for Arafura and for a number of rare earths companies in general, following a number of key announcements, including further export restrictions by China in early October and the U.S. Australian Critical Material Minerals Framework in late October as well. Against the backdrop of these activities, we successfully launched and completed a AUD 475 million two-tranche placement in October. This was followed with an associated SPP and Tranche 2 of that raising closing in December alongside the SPP. Again, we're pleased to see the strong participation from existing shareholders, including our substantial shareholder, Hancock Prospecting as well as welcoming a number of new shareholders to our register. We ended the period with cash on hand of AUD 570 million, up from AUD 90 million the previous quarter. The increase included proceeds from the October placement, including the Tranche 2 proceeds and the SPP. And this also included Tranche 2 and SPP funds from an earlier August placement with the settlement occurring in the quarter just completed. The important component here is the increased cash position significantly strengthens the balance sheet and demonstrates the company's ability to move into project execution when strategic equity is secured. Completion of the private placement has significantly derisked the project funding requirement and has provided us with the opportunity to make significant progress with cornerstone investors, offtake groups and final documentation with lenders, knowing that the private placement component of the funding has now been completed. I'll just briefly refer back to the Appendix 5B cash flow. You can see expenditure during the period included AUD 3.4 million in project development activities to support execution readiness as we ensure we can hit the ground running post FID, which is obviously a segue into handing my session over to Tommie, our Chief Projects Officer, who will provide you with a brief update for the project. Thanks, Tommie.

Tommie Van der Walt: Thank you, Peter. I'll now provide a short summary of project activities and focus areas at the moment. The appointment of Hatch towards the end of last year was a major milestone in the development of the Nolans Project. Whilst this is a change to our earlier integrated project management team model, Hatch brings a significant depth of engineering and execution experience to our project, particularly in managing the delivery of complex projects, including hydrometallurgical processing infrastructure. Hatch has been involved in the early engineering and design which enables them to transition immediately into execution planning, recognizing that execution readiness is a catalyst to announcing our investment decision. Now Hatch will report directly into the Arafura owners team under the direction of Ed Matthews as the Nolan's Project Director. Ed joins us with more than 30 years of demonstrated capability in the development and delivery of major projects and capital programs, managing major greenfields and brownfields resource and infrastructure projects across Australia, Asia and Africa. We've been actively identifying and recruiting the other critical roles within the owners team with a number of these personnel due to commence in the coming months. Over the last 6 months, we've invested the time in establishing robust procurement processes and developing key relationship with potential suppliers. On the back of an FID announcement, we will launch a competitive process to ensure we deliver the best commercial outcome for the business without compromising on supply certainty, quality or schedule. So that's just a couple of updates as it stands at the moment. I'll now hand back to Darryl to close.

Darryl Cuzzubbo: Thank you, Tommie. Thank you, Peter. So as you can see, we're making strong progress on rounding out the last less than 10% of funding and offtakes on the best possible commercial terms whilst making sure that we are ready to execute the project safely, on time and on budget. I'd like to thank the team for their effort to date, the extra time that they have dedicated working across multiple time zones to get us to where we are today and very grateful for their commitment and that of our partners here and abroad. It is all coming together. And on that note, I might just pause and just open up for any Q&A.

Operator: [Operator Instructions] We are showing no questions from the phone. We will now move to the company for webcast questions.

Penelope Stonier: Thank you, Kylie. The first question we have is from an anonymous shareholder. So the question, Darryl, Lynas has raised just over $1 billion in cash late last year and has a market cap of around $16 billion. They're a proven developer and producer of NdPr mines and has made it known to its shareholders and market that they are looking to increase their exposure and NdPr production. Arafura, one could say, has now moved to a development growth company, which offers a high-quality, long mine life of NdPr production. History shows that most major resource producers in acquisition phase look for companies with high-quality mine life opportunities. Once they target the company have completed all the hard work and derisk the project and are close to development stage, normally leaving long-suffering shareholders who have supported the company for years, not getting to see the full potential upside of the share price. If an opportunistic bid was made whilst the share price is still languishing in the high $0.20 to low $0.30 range, what is the Board doing to prevent a company like Lynas who also has Hancock Investment Group as a major shareholder, making an opportunistic takeover bid for Arafura?

Darryl Cuzzubbo: Yes. So thank you, Pen, for that question. Look, I mean, Lynas has mentioned that this is something that we, as a Board, have been very mindful of, right? So we've got our defense strategy in place. We have a defense adviser. Actually, not that long ago with the subcommittee of the Board, we actually went through a number of [ MOCs ] situations. So I feel like from a defense perspective, we're very well prepared for that. As we did our most recent capital raisings, we deliberately targeted long-only investors that obviously helps getting them on our register. And also, obviously, there's things that we can control and can't control around share price. I mean share price is the ultimate defense. And I'm saying the obvious here, right? So the next catalyst is FID, which for us is just around the corner. So I think we're well prepared should there be an opportunistic bid.

Penelope Stonier: Thank you, Darryl. The next question comes from Heck Middleton. Why should the shareholders believe and trust the decisions of the company and the Board on this new FID approval when we originally said it would be announced during the first quarter of 2025. Why not start it in November, get the development to production. And I'm sure the balance of funds and cornerstone investors will come in very quickly as they don't want to miss the opportunity at such a discount. And at the same time, we know the future funders and shareholder support. I assume now you've had around 90-plus percent of the total development funds that you are seeking. And if you have a 20% contingency on the total development budget, doesn't that mean you already have full funding in place with just the 10% contingency?

Darryl Cuzzubbo: Yes, a good question. So just probably there's a couple of things there, right? So firstly, it has taken us a bit longer to round this out. As I mentioned in the introduction, we are at the front of the queue in a long list of projects with the new government seeded funds. So that demonstrates we're doing something right. If you look at EFA, we were the first from an equity perspective. If you look at National Reconstruction Fund, we were the second and the largest. And you look at the German Raw Materials Fund, we were the second with the first project being a German project. And there's -- as you can imagine, there are many projects that have applied. So for us to be at the front of the queue says something and gives me confidence we're doing everything we can to progress as quickly as we can. Now on your second point about should we go call FID now, we could, right? But we don't think it's prudent. We think the most prudent thing, particularly given we've got less than 10% is to secure that equity so we can go to our shareholders. So we're fully funded. Secondly, we use the tension around securing offtakes to help bring in that equity. And as I mentioned, the pricing dynamics are improving in our favor. So let's ride that wave. When we lock in offtake agreements for the lenders, they have to be essentially a 5- plus 2 or 7-year term. So think about that, you've got a 3-year construction period and then you've got a 7-year offtake. So for the next decade, sure, calling FID is an important catalyst. But the value of your company for the next decade will be determined by the pricing terms that we negotiate in the current offtake. So we think it's prudent. We think it's in the long-term interest of the company to lock in the remaining funding and the offtakes on the best pricing terms. And it's -- as you can see, we're not far from completing that.

Penelope Stonier: Thanks, Darryl. I've got a question from Bernard just in regards to that remaining 10% equity on the best possible terms. Is there a risk that this will further dilute the shareholding?

Darryl Cuzzubbo: So the 10% -- it's a good question, Bernard. So Peter mentioned that there's USD 134 million left to secure. As we bring those cornerstone investors in for the USD 134 million, they will come on to our register.

Penelope Stonier: Okay. I'm going to touch on a couple of -- a general question here. It's just coming through a number of shareholders. Is FID imminent? And do you expect any further delays? And what confidence can you give the shareholders that FID will come within the coming months?

Darryl Cuzzubbo: Yes, sure. So look, we're being as transparent as we can. So as I mentioned, we're expecting to round out the agreements by the end of March that would then allow us to call a shareholders' meeting to vote for the last cornerstones coming in. That is our best guidance. If -- but it can go either way. So for example, if there was another geopolitical event, that time frame could come forward. Also, it could be a little bit later if we're not getting the pricing terms that we think we should be getting on the offtake. So there is a level of uncertainty around the time frame. I can assure you what we're pursuing is what will drive the long-term value of the company. We're doing it as quickly as we possibly can as evidenced by our progress compared to other rare earth projects, but there is some uncertainty to the timing because we're not in control of the third parties that we're dependent on. And we're being as transparent as we can on that time line. But in any case, we think that the most plausible outcome is to get these sorts of agreements in place by the end of March. So you can see it close.

Penelope Stonier: And just following on from that. So John Hebenton, apologies, John, if I've incorrectly [ pronunciated ] that. Is the German Raw Materials Fund the only thing remaining for FID to be announced? Can you please elaborate?

Darryl Cuzzubbo: Yes. Thanks, John. No, it's not. So as Peter mentioned, the USD 134 million, that could include the EUR 50 million from the German Raw Materials Fund, but there are other parties that we're engaging with. There's literally half a dozen options that we're pursuing to land the remaining USD 134 million. And we're doing that, one, make sure we land as quickly as possible. But secondly, so that there's some competitive tension so we can get the best outcome. So John, there are more parties involved. I cannot -- these are commercial and confidence discussions. But as soon as we can say something more on those discussions, we will.

Penelope Stonier: Thank you. And just in terms of -- I've got a question here from both Lee Burt and also from John Parkinson. Just providing an update on the joint venture. There's been little disclosure in regards to the talks in the joint venture. Can you advise if this is still something that is possible?

Darryl Cuzzubbo: Yes. So thank you, Lee, and thank you, John. So on the JV, it's very much the same as what I said last time. If you go back, I think it was about 6 months ago, I said there was a two-horse race here. And we would close out with the one that was the quickest with a line of sight as to where we're going to get the best return for our shareholders. The JV pathway is not moving fast enough. So all of our attention is on securing the last 10%, so we can call FID. The JV pathway is somewhere in the future. So we're not focused on that. We're focused on landing at the last 10% and calling FID.

Penelope Stonier: Thank you. This might be one best directed towards Peter. Is there any contingent on the funding or loans we have with needing the German offtake agreement getting signed?

Peter Sherrington: Yes. So we have some volume requirements that we need to meet with our German lenders and Siemens Gamesa covers a substantial proportion of that. We would like some additional volume to provide us with some buffer over their requirements as well. So as we're not just reliant on the existing contracts. So that is a requirement. But probably the major focus is also tying it in with investment from the German Raw Materials Fund as well. So there's two key things that are driving our focus on those German market opportunities.

Penelope Stonier: Thanks, Peter. I have a second question from John Hebenton. How do you expect to reassure shareholders that this project will succeed given constant delays? And more importantly, the shareholder value has been destroyed through massive dilution and price -- and share price that is down over 60% from its highs as well as the current price of $0.28 or slightly down today. Can you give a bit more color on that share price movement, please and reassurance from the shareholders?

Darryl Cuzzubbo: No worries, John. So just a couple of things right. So the question is around whether we're going to get to FID or not. We're 90% there. So there is no question we're not going to get to FID. The question is, are we going to get to FID on the best possible offtake pricing terms. And as I said, we're close. Now in terms of share market performance, if you compare us to our peers, excluding Mountain Pass and Lynas producers, we've actually done very well. So our share price over the last 12 months is up nearly 110%. You talk about coming off lows. We've moved with the rare earth sector, right? So when there was different geopolitical events, we all -- the rare earth sector rode those waves. But if you take a 12-month view and compare us to our competitors, we've actually done pretty well. And we're going to continue to do that. Now on the dilution front, if you look at Peter talked to the total funding ask, we have maximized out on debt. We have done that deliberately to minimize dilution to our shareholders. So I feel like we're doing everything we can to pull off a capital-intensive project in a way that protects shareholders' value. And like I said, we're not just taking the short-term view here. We're taking a long-term view. We want to get to that FID catalyst, but we're also making sure that we lock in the best pricing terms that will actually more than anything else, define the value of your company for the next decade or so.

Penelope Stonier: Thanks, Darryl. I'm going to group two questions together here. In hindsight, would it be a faster path to secure equity funding and offtake with the U.S. rather than relying on the AU market? And then can you provide some thoughts on the U.S.A. floor pricing, its potential to be pulled and how that political move may ripple across into Australia and what the critical minerals reserve.

Darryl Cuzzubbo: Yes. It's a very good question. Sorry, who asked that question?

Penelope Stonier: Bernard as well as [ Patrick Losav ].

Darryl Cuzzubbo: Okay. So Bernard, Patrick, very good question. So look, with the benefit of hindsight, there's actually nothing I would think we should be doing differently. So just remember, so the U.S. is pushing hard now with the recent administration, but that wasn't the case 18 months ago. So I think we have adapted to reflect what's happening in the different regions. I'm hoping that if you look at the global manufacturing powerhouses, a great outcome for us is to have offtake agreements in different regions on pricing terms that allows us to move to an independent index. I would say if we can pull that off, we will be better positioned than anyone else. So you look at Lynas locked in with Japan, Mountain Pass locked in with the U.S. We've actually -- if we land our intent, we will actually have the most globally diverse offtakes with end customers, and we're trying to negotiate terms where we can move to an independent date. This will position us very well. So in terms of would we do something different? I mean, at the micro level, of course. But at the macro strategic level, no. No, I think this is playing out well for us. And time will prove that.

Penelope Stonier: And then just another question related to the U.S. from Thomas Morris. With the U.S. interest in Greenland rare earth supply, does this diminish the prospects for Arafura?

Darryl Cuzzubbo: So -- and I just realized I didn't answer Bernard and Patrick's question around the U.S. floor price. So just with the -- let me answer that, then I'll come to the Greenland question. So on the floor price, with Mountain Pass, we actually saw that as a one-off. What's most important to us is that we can move to an independent functioning market index, where we believe the pricing will be well above that floor price. With that said, the -- as you know, the Australian government has been talking about this strategic reserve for critical minerals, including rare earths, and they're talking about a floor price. So if we can secure a floor price, we obviously will. But our priority is to get ultimately better pricing, and that will be on an independent functioning price index. Remember, the Mountain Pass deal, whilst they got a floor price, they had to share any upside with the U.S. government. We prefer to keep the full upside. Now with the Greenland, this is -- and I think I might have mentioned this previously. So the Greenland's resources on rare earths are not well defined. So it typically takes 18 years to find a resource and take it into commercial production. Greenland is probably not even at the start of that 18-year tenure. So any Greenland prospects, if they work out to be economic is many, many years away.

Penelope Stonier: Okay. Thank you. Another question from Bernard. What participation will Arafura make with regards to the Australian government's $1.2 billion critical mineral strategic reserve?

Darryl Cuzzubbo: Yes. So we -- I think we've taken a proactive and leading position in that. AMEC pulled together the sector, the rare earth sector and put a proposal forward to the government, and it's similar to -- as I was saying before, similar to the Mountain Pass type agreement, where there's a floor where you're sharing some upside above a certain price. And the Australian government is considering that, noting that pretty much not all, but most of the rare earth sector were behind that sort of arrangement. Minister King did make announcement earlier this month on that to progress that concept. It will be administered by the EFA, which are very -- who are very familiar with our project and looking to pass legislation sometime later this year. So we're very engaged with the government on that. We're very engaged with the broader sector on that, and we've been engaged with AMEC and the proposal that was submitted to the government just before Christmas.

Penelope Stonier: I've got a question from [ Sapien Nath ]. One of my observations about mining businesses is they're inward-looking mentally, which means focusing just on their business. Technology companies try to develop the ecosystem to improve the sustainability and future prospects. What is Arafura and to make sure that we are a major player and also to make sure to establish the importance of NdPr for the world?

Darryl Cuzzubbo: Yes. So it's a very good question. So there's a number of aspects to your question. So firstly, I think if you look at just the rare earths plays, I'd like to think we've been the one that's been advocating for this non-China index the most. Because we see that as the ultimate thing that will open up the rare earth sector across the globe as well as getting good returns for our shareholders. I'd like to think we're taking a bit of a leadership position on that. But we're also mindful that this project has many stakeholders. So we've got a clear pathway to net zero. The power supply, and we'll be able to say a bit more about that in coming months, enables renewables to come in. We're very focused that building up this project just north of Alice Springs. It will bring jobs and prosperity to the local community. So I'd like to think we're taking a very broad look across our stakeholder base, doing what we can to provide that support, but we also need that support in return. We're talking today about Phase 1. But as soon as we post FID, we want to start progressing approvals and engineering for Phase 2. So I'd like to think we're taking a long-term holistic view and taking a global leadership position in getting the sector to move to a non-China controlled index.

Penelope Stonier: Okay. I think I've got another question here from Heath Milton. Just want to understand how the Board looks at the volume of shares currently on issue, edging to just under 5 billion shares on issue. Has the Board considered a share consolidation? Or is this something that they will look at believing that it would potentially help in reducing short traders in the stock and help prevent opportunistic takeover?

Darryl Cuzzubbo: Yes. So Heath, look, just in the short term, our focus is on just closing out the last 10%, right, so we can get going. However, we are looking at the share consolidation. There's pros and cons, right? So the con is you reduce liquidity. So if we want to become the rare earths stock that's in construction, then investors need to have sufficient liquidity. So that's a bit of a downside with share consolidation. But the other big factor in all this that we're looking at and testing is it may help bring in U.S. investors, and we're actually testing that with the market. So in short, we're looking at it, and we're assessing the pros and the cons. It's not something that I see us doing in the short term as we just focus on rounding out the funding and moving into construction.

Penelope Stonier: And just touching on share price movements today. Can you please -- this is from Craig Fishman. Can you please provide any thoughts on why the share price movement has moved to 6%?

Darryl Cuzzubbo: Yes. Good question. So let me -- so this is obviously a very dynamic situation. Let me make a couple of comments and I might hand over to you, Peter, for anything to add. So there's probably a couple of things, right, that have been announced or been talked about in the media. So one is around the Mountain Pass floor pricing and whether that's applied to other projects or not. And as I've already said, we have not expected that. We've been pushing for something that we think is better, which is an independent pricing index. But I think that may be impacting the market. And then the second thing is just the Australian exchange rate where the Australian dollar has strengthened against the U.S. dollar given our bank -- there's a better chance of maybe increasing interest rates whilst the U.S. maintaining or reducing. Peter, do you have anything to add to that?

Peter Sherrington: No, I would have said the exact same thing. I suppose the Reuters article, which has probably been picked up on today by a number of groups seems to be maybe impacting the share prices of the sector. But as Darryl mentioned, our understanding was the floor price for MP was a one-off. I thought that was pretty clear from some time ago, but perhaps that wasn't so clear to the market. And then probably the major thing, I think, which is driving the share price and the sector and other miners as well today, I think it's sort of not just a rare earth thing is uncertainty over the U.S. dollar exchange rate and how that impacts earnings moving forward and perhaps also interest rates where you've got a capital-intensive project where there's uncertainty over interest rates, that is also a potential impact on earnings. So I think they are probably the key drivers. But in markets, we don't know everything until often after the fact sometimes, but they're our best guess.

Darryl Cuzzubbo: Thanks, Peter.

Penelope Stonier: Thanks, Peter. So a question from Fredrick Richmond. So far, compared to other rare earth companies, the share price has reacted only slightly to increasing market momentum. Arafura is clearly not seen on the stock market as a serious project that generates sustainable shareholder value. How do you intend to change this and ensure that long-term shareholders in particular, benefit from these developments?

Darryl Cuzzubbo: So Fredrick, again, like I just said earlier, like if you look at the last 12 months, we've actually -- our share price has done pretty well. And if you compare us to other projects, you'll see that, right? So our share price has risen 110% in the last 12 months. But you know what, there's always more to do. And like I've said a couple of times, what's in our control is obviously getting to FID and locking in offtake agreements on favorable pricing terms. So the two things that we can do right now that drive shareholder value. We pulled Tommie in. The next phase, construction phase will be tougher, tougher again. And the best way to make sure that we're successful there and deliver shareholder value through that phase is good people and good planning, and that's exactly what we're doing right now.

Penelope Stonier: Thank you, Darryl. And in terms of -- I've got a question from Heath Milton as well. Just in terms of coverage and understanding the Arafura story, how does the company propose to be able to develop those relationships and gain greater coverage and then obviously, a greater understanding throughout the sector of where the company is at.

Darryl Cuzzubbo: Yes, that's a good question. So I might make a couple of comments. So Penny here has done a lot of work in this space since joining us. So let me make a couple of comments. So the rare earth sector up until recently actually has not been that well understood. Actually isn't that well understood. It's quite a niche sector. So we have spent a lot of time educating research as well as investors on the sector. And obviously, as our profile has grown, as our market cap has grown, we've got increasing interest from researchers. And I think that will happen, that will go to another level again post FID. But we focused heavily on educating researchers on the sector and our project in preparation to encourage them to cover us. Penny?

Penelope Stonier: I think you've hit the nail on the head, Darryl. What we are seeing Fredrick as well, in particular and for Heath -- we do have a lot of the investment houses, research analysts that do look to the sector, and they have openly come to us and spoken to us recently and that where part of their challenges is particularly around the price bifurcation, the dominance of China and seeing some traction in terms of having alternative suppliers of NdPr and other rare earths coming to market so then they can actually validate their assessments and their work going forward. So there is -- as Darryl said, we are engaging with the analysts. We're engaging with the research desk. We are doing a lot of work. And I think in terms of that validity of our project, the deal that's being done from EFA, from KfW, from all of our lender group is probably a really good signal that this is a genuine project. We are just that so close that 10% away from securing it, that I think in coming months, you will really see the value in terms of what is coming out of Arafura, particularly as the most advanced project pre-feasibility, preconstruction, we've done our feasibility studies. We are the most advanced and construction ready. It is just that 10%. So I think we're getting good traction in the market on that perspective.

Darryl Cuzzubbo: I think as the sector understands the importance of ore to oxide and how that truly differentiates us as well, I think that's going to play in our favor.

Penelope Stonier: And one last question from Fredrick. As we look to the parallel pricing systems established outside of China and further full price guarantees potentially by government, what effect will this have on any existing offtake agreements already in place? And do those need to be renegotiated?

Darryl Cuzzubbo: Yes. Look, so we did anticipate a change in the pricing environment as we did different offtakes. It's happened sooner than we expected, thanks to the U.S. So we do have provisions to enable a transition. But ultimately, they still need to be negotiated. But this goes to my point earlier, now is the time to negotiate these better pricing terms.

Penelope Stonier: Okay. I think another question probably turning more towards the project. Can you please from [ Aman Malik ], how much of the 10% in dollars? How much is this 10% in dollar value and the number of shares that will be added?

Darryl Cuzzubbo: Yes. So as Peter mentioned, it's USD 134 million out of a total funding bracket of USD 1.9 billion. So it's actually less than -- is less than 10%. Peter, I don't know if you've got an idea of the shares for that USD 134 million.

Peter Sherrington: It will depend on what deal is struck with those particular investors, Darryl. So I think our objective will be to minimize the number of shares and maximize the price that we issue those at. I mean that's always going to be the case. But I think to sort of speculate what that will be now is probably a little bit difficult.

Darryl Cuzzubbo: Thanks, Peter.

Penelope Stonier: Thanks, Peter. And in terms of -- just to clarify one question from Robert William. Where will the processing plant be built? And what are the processes that are being utilized?

Darryl Cuzzubbo: Yes. So Robert, so the process plant will be built at the project site. So that's 135 kilometers north of Alice Springs. One of the differentiators for us is that all of the processing happens on the one site. So if you look at other projects will have the mine separate to part of the process plant and that has a couple of things. It means you've got transportation costs. But the other thing is with rare earths, when you find rare earths, it's found with radionuclides and by having the whole process plant on site, everything that leaves site is clean from a radiation perspective. So this is super important when you're looking at other rare earth projects, this is a differentiator by us going to an oxide, which removes the radionuclides and having it all done on the one site. In terms of -- you asked the question, what is the exact process? It is a complex process, right? So 90% of the CapEx, 90% of the OpEx is tied up with the process plant. But broadly, there are four components. So you've got the mine that makes up 10% of the CapEx. You've got the concentrator that really concentrates the rare earths. And that's pretty low process complexity. So you've got concentrators in copper, gold, et cetera. Then you've got a hydromet circuit, and that's a chemical process that uses different assets to start to pull the rare earths out. That is the most complicated and capital-intensive part of the project. And then the back end, you've got what's called separation. which is where you -- it's the last step where you pull the light rare earths, pull the light rare earths out into an oxide for sale. So if you look at -- you compare us to Lynas, Lynas is, those steps the mine, the content of the mine, obviously, Mt Weld, you've got the concentrator at Mt Weld. You've got the hydromet circuit, which is at Kalgoorlie and then you've got the separation process in Malaysia. We do all of that at the one site.

Penelope Stonier: And talking about the CapEx there from Bernard. In terms of CapEx denomination, do you -- are you able to provide a breakdown on U.S. versus AUD on proportion?

Darryl Cuzzubbo: I don't have that at hand. Most of it is Aussie dollar, by the way, but there is a U.S. denomination. I'm not sure, Peter or Tommie, you've got any more definitive insight into that.

Peter Sherrington: I haven't got the exact figure on me, but the U.S. dollar and euro component of the CapEx is not significant. Our most significant FX exposure is in actual fact on converting the U.S. dollar loans back to Aussie dollars so as we can spend them on the project. So in terms of FX exposure, that's probably our most significant focus.

Penelope Stonier: Okay. And one more project-related question on procurement supply. Can Arafura avoid electricity supply problems that Lynas Rare Earths has had? Thank you from [ Jeffrey Propel ] in Miami Beach.

Darryl Cuzzubbo: The simple answer to that, Jeffrey, is yes. So Lynas are moving to an off-grid solution. Our solution is already off grid. So we have a gas pipeline that runs through our tenements. We will be tapping into that with an independent power supply. So we will not be reliant on the grid.

Penelope Stonier: Conscious of time, I'll probably just wrap up with two more questions. Darryl, prior to the last capital raise last year, the Board said that the cash burn rate was around $1 million to $1.2 million per month. Excluding capital costs -- excluding the capital raising costs, what has been and are now the estimated cash burn rate per month, has that changed materially?

Darryl Cuzzubbo: Yes. So as you said, excluding the one-off funding-related costs, our cash burn is a bit over $2 million a month. However, as we get close to FID, we are going to be ramping up our project team and execution readiness so that soon after calling FID, we can release contracts and start construction. So right now, it's a bit over $2 million a month.

Penelope Stonier: Okay. All right. Scott McCullough, just thanks team doing a great job. So we appreciate that support, Scott. And just to wind up, Darryl, I'm going to collectively pull in half a dozen questions here, and I think they're all burning to know. Can you please provide updated guidance? What -- when do we anticipate FID now? And what are those key steps that will be required, the catalysts you've spoken about them in the -- at the AGM. What are those catalysts now to be able to call FID and move forward into construction?

Darryl Cuzzubbo: So the main catalyst is securing the last 10% of funding but it's linked to the offtake. So we'll be basically using the remaining offtake to pull in equity. And as I mentioned, we want to get as favorable pricing terms as we can on that offtake. And it's like any negotiation, right? So if you're doing a purchase agreement or buying a house, you can always do a quick deal. A better deal always takes a bit more time. So we've been quite tough and deliberate about that. We've been very deliberate in having multiple strategies to create that competitive tension, right? So I would argue we're looking at closing that FID, but we want to get the best possible pricing terms as we can. Now the reality is with the offtakes, we don't need to have -- we want to have all the offtakes in place, but we actually don't need to have them all in place from a lender perspective until debt drawdown, which is about 12 months after we start construction. In terms of finalizing that time line, our best guidance at this point is to finalize those agreements by the end of March, which would then enable us to take that final equity piece to shareholders, which will enable FID in Q2. So we want to by the end of this quarter, get the agreements in place that then enables us to call a shareholder vote in Q2. But I need to stress, right, we're not in control of the time line. We can influence it, but we're not in control of the time line.

Penelope Stonier: Thank you. There are just a couple of minor questions here that I will revert directly back to the people who posed those questions. But Darryl, there's no other questions on the phone line. So I might hand back to you to close.

Darryl Cuzzubbo: Okay. No worries. Thanks, Pen. So again, thank you, everyone, for joining us today. Please always feel free to send through any questions that you have to the company. Don't need to wait for the quarterly updates. I hope you can see that the pieces are coming together. We are focused on the key items that will deliver the most value that is rounding out the funding, getting the best pricing terms for our offtakes and making sure that we're ready to execute. I look forward to providing you an update again on these activities next quarterly, and we would like to thank you for your continued support. Thank you for dialing in today.

Operator: That does conclude our conference. Thank you for participating. You may now disconnect.