Asian Metal: Thanks for accepting the interview of Asian Metal, Richard! Although I believe the majority of insiders already know Arafura Resources Limited, would you like to introduce your company at first?

Richard: Arafura is an Australian Securities Exchange (ASX) listed company that has its headquarters in Perth, Australia. We employ 15 people (augmented by approximately 15 people working in Arafura’s owner’s team) in two offices (Perth and Darwin) and our focus is on developing our 100%-owned Nolans Neodymium-Praseodymium (PrNd) Project in Australia’s Northern Territory.

Arafura also owns 60% of a joint venture with Thor Mining PLC exploring for Tungsten-Copper resources, also in the Northern Territory.

Asian Metal: I noticed that your company was concentrating on Nolans Neodymium‐Praseodymium Project over the past years. Would you please give some detail information of Nolans Neodymium‐Praseodymium Project?

Richard: The Nolans PrNd Project is located 135 km north of the town of Alice Springs and 10 km west of a transnational highway. It has JORC-compliant Mineral Resources of 56 Mt with 2.6% TREO and 11% P2O5 down to 220 m below surface. PrNd makes up 26.4% of the TREO. Rare earths are primarily hosted in the calcium phosphate mineral apatite, and the project is planning to produce an average of 4,360 tpa of PrNd oxide, 600 tpa of SEG-HRE (middle-heavy rare earth) carbonate, 8,380 tpa of cerium hydroxide, and 135,800 tpa of fertilizer-grade (54% P2O5) phosphoric acid for sale. A definitive feasibility study was completed for the project in February 2019, which showed a pre-production capital cost of US$726 million and operating costs of about US$26 per kg of PrNd oxide. We have since completed work that reduces our operating costs to less than US$24 per kg of PrNd oxide.

The project has secured all environmental approvals for the mining, processing and separation of rare earths, including for the long-term management of all radioactive mine tailings and process wastes.

Arafura has offtake MOUs for PrNd oxide with two Chinese magnet companies, JingCi Material Science Co., Ltd (Beijing) and Baotou Tianhe Magnetics Technology Co., Ltd.

Asian Metal: Would you please share the latest update of Nolans Neodymium‐Praseodymium Project?

Richard: In recent weeks we have released a lot of exciting news. Firstly, Arafura has reached a commercial agreement with the native Aboriginal people of the Nolans site after many years of engagement and cooperation.

Secondly, we delivered a substantial upgrade to the economic Ore Reserves for the project to 29.5 Mt with2.9% TREO and 13% P2O5, representing a minimum 33-year production life.

Thirdly, we completed limited drilling at Nolans and discovered very substantial thicknesses of rare earths ore up to 200 m beneath the planned open pit. (e.g. 75 m with 2.8% TREO and 11% P2O5). This indicates the strong potential for additional Mineral Resources at depth.

Finally, we successfully completed rare earth separation piloting at ANSTO in Sydney to produce a >99.9% PrNd oxide product and a >99.5% SEG-HRE product. Samples are being prepared for assessment by potential customers in several countries.

Asian Metal: May I know what's your next plan for Nolans Neodymium‐Praseodymium Project?

Richard: Upcoming milestones on the way to construction of the Nolans Project include securing our final mining permits from the Northern Territory Government, commencing front-end engineering and design, and appointing corporate and debt advisors to support our project financing efforts.

Despite the broad challenges posed by the global COVID-19 health crisis, we are also intensifying our efforts to progress and conclude PrNd and other product offtake negotiations with targeted customers.

Asian Metal: What's the development prospect of Nolans Neodymium‐Praseodymium Project in the near term?

Richard: The development prospect for the Nolans Project in the near term is relatively good. The project enjoys strong support from the Northern Territory and Australian governments, and from the local community. Good progress is being made in negotiating quality offtake agreements for most of the project’s PrNd oxide product that can support the debt component of the project financing. Despite the price of PrNd oxide remaining relatively subdued, there is growing confidence that sustained demand pressure for this product in the manufacture of NdFeB magnets will lead to an escalation in price over the period that aligns with the development timeline of the project.

Asian Metal: We all know that developing a rare earth mine need to overcome many difficulties. May I know what do you thinks is the major challenge of your project face?

Richard: The major challenge facing the Nolans Project is in procuring the large capital requirement of US$726 million. We are communicating with more companies for the cooperation of Neodymium‐Praseodymium Project at the moment.

Asian Metal: Markets of Chinese PrNd oxide and mischmetal witnessed soft demand and dropping prices over the past weeks. Current mainstream prices of Chinese PrNd oxide and mischmetal drop to RMB257,000-262,000/t (USD36,351-37,058/t) D/P and RMB330,000-335,000/t (USD46,676-47,383/t) EXW T/T 30 days, down by 8.1% and 7.8% from prices at the begin of this years. Would you please share your opinion about prices trend of PrNd related products in the near term?

Richard: The PrNd prices softened in recent months on the back of extended temporary closure of industry after Chinese New Year. Chinese industry is recovering, and downstream rare earth operators are filling orders and the risk in the supply chain is on deliveries and transport. The rest of the world is now acting to the COVID-19 health crisis and shutting industry for extended periods placing further pressure on prices which may remain flat for the coming weeks or months. The EV story remains positive and we expect governments to provide stimulus and continue key programs to ensure an upward trajectory of the EV industry once factories restart in Europe and other regions. PrNd prices are flat and rare earth processors aren’t attractive financially if prices continue to remain at historical low prices. Stockpiling and inventory increases are also occurring signaling that longer term when the recovery commences, prices will increase as the EV uptake and general economy recovers.

Asian Metal: New energy vehicle market is considered as the foremost industry to drive PrNd demand. May I know your opinion about energy vehicle development prospect?

Richard: The fundamental drivers of the EV industry remain strong and over the next several years, we expect an increase in global passenger EV sales in Europe and China placing more pressure on rare earths demand and prices. All the major automotive manufacturers are investing in EV platforms and replacing the ICE production lines to deliver various models to consumers in the foreseeable future. The clean energy economy is here to stay and recent introduction to European emission standards in 2020 is driving the decision to introduce EVs to the entire car fleet to meet emissions targets. The number of EVs sold annually is increasing and independent analysts seem united in forecasting a steep growth in EV uptake.

Asian Metal：Thanks for your time, Richard! Wish you every success in your business.

Richard: It’s been my pleasure Vivian!