Arafura (ASX:ARU) has gained 182% in one year; is this the reason?

2022-09-24 01:53:47 By : Mr. Ducan Chen

Helping you make informed decisions on investing, money, equities and personal finance. Seasoned investors or newbie traders, our financial education corner has something for all.

Catch the latest updates from Australia's premier stock exchange & market indices.

Arafura (ASX:ARU) has gained 182% in one year; is this the reason?

Shares of Arafura Resources Limited (ASX:ARU) are heading north today (19 September 2022). At 11:29 AM AEST, Arafura shares were spotted trading 8.77% higher from its previous close at AU$0.40 per share.

Including today’s gain, Arafura’s share price has zoomed up 31.667% in a month, 64.58% in six months and 71.74% on a year-to-date basis. In the last one year, the share price has shot up by a whopping 182.14%. In the last five years, Arafura shares have registered a gain of 338.89%.

Meanwhile, ASX 200 Materials index (INDEXASX:XMJ) was 1.21% up at 15,615.40 points around the same time.

Worth mentioning here is that the peers of Arafura were in red today. At 11:59 AM AEST, Imdex Limited (ASX:IMD) shares were down 1.46% to AU$2.03 per share. Around the same time, Perenti Global Limited shares were down 1.88% to AU$0.94 per share.

Recently, via an ASX announcement, Arafura shared that it has been added to the S&P/ASX 300 Index and the changes in the indices are effective from today onwards. This might be the reason that Arafura shares are surging today.

While sharing the quarterly report in July 2022, the company said that NdPr prices continued its solid performance in three months and provided confidence regarding Nolans project economics and sustained higher prices.

Talking about the company’s long-term outlook, the company is negotiating with Hyundai Motor Company concerning an offtake agreement for the sale of 1,000 to 1,500 tonnes of NdPr Oxide annually over seven years, commencing 2025. Both parties are working towards a definitive offtake agreement.

Moreover, the company has inked an MoU with General Electric Renewable Energy to collaborate in setting up a sustainable supply chain for NdPr for constructing energy transition and offshore wind turbines. Arafura said that both parties have also agreed to negotiate the sale and purchase agreement, under which GE would purchase Arafura NdPr.

Arafura expects that the demand for NdFeB magnets will improve in the coming quarter under the assumption of manufacturers restocking, downstream production and fresh orders to fill in the third quarter.

Arafura aims to become a major player in NdPr (neodymium and praseodymium) market. This material is used in making electric vehicles, mobile phones, wind turbines and robotics.

Nolans is the key project of the company and encompasses a processing plant, mine and related infrastructure. Arafura claims that once the project is fully developed, it will become a major supplier of critical minerals in the NdFeB permanent magnet market.

Sonal has experience in the field of content development and academic research. At kalkine, At Kalkine, she tracks business news, stock markets, companies, and economic developments in Australia. She has a postgraduate degree in financial management ...

Khushboo Joshi is a multimedia professional with over eleven years of versatile experience in Journalism and Content management across various domains. Also, owing to passion for literature, story-telling and features & fiction writing comes naturall...

Copyright © 2022 Kalkine Media Pty Ltd. All Rights Reserved.

*David Jones eGift Card Terms and Conditions Apply. Kalkine Media and its related affiliates/entities hereby disclaim any and all kinds of express/implied liabilities as regards your usage of the David Jones eGift Card.

By submitting your details and clicking on "Sign Up Now" button below, you agree to Kalkine Media’s Terms of Use and agree to receive marketing offers, including to be contacted by e-mail or phone, as set out in our Privacy Policy. Any calls will be made by Kalkine Solutions Private Limited on our behalf or on behalf of Kalkine Pty Ltd.

Our records show that you are already a subscribed user of either Kalkine Media or Kalkine Pty Ltd. Please note that this offer is valid for new users only.

Continue exploring Kalkine Media for latest news and insights.

You are Just a Step Away from your David Jones Free eGift Card.

Verify Now with the OTP sent on your email and mobile number.

Password must contain at least 6 characters, including UPPER/lowercase and numbers.

Your AU$25 David Jones FREE eGift Card is Ready.

The Card will be sent on your registered email id. Enjoy and Keep Exploring Kalkine Media for all the Upcoming Offers & Insights.