ASX: ARU ASX ANNOUNCEMENT 18 March 2010 Arafura steps up activities associated with development of Nolans Project - on track for 2013 start-up Key points: - Following receipt of funds from the recent successful capital raising, work programs associated with the Nolans Project mine site have been stepped up. - Whittle Consulting has been appointed to perform a mine optimisation study which will result in a detailed operational and financial plan; - H2O Drilling has been appointed to undertake groundwater investigations to help assess the environmental impact of the project.

This work will include drilling on various parts of the Nolans site and surrounding areas. - Production start-up for the overall Nolans Project remains on schedule for 2013. Australian rare earths company Arafura Resources Limited (ASX: ARU) ("Arafura" or "the Company") continues the development of its Nolans Rare Earths-Phosphate-Uranium Project in the Northern Territory of Australia, confirming it has commenced, or soon will commence, a range of key tasks required to meet target production in 2013. Nolans Mine Site Feasibility - Optimisation Study Arafura has entered into contractual arrangements with Melbourne-based Whittle Consulting to perform a detailed optimisation study of the Nolans Project.

The study involves a full economic, financial and engineering review of the mining of the Nolans deposit over the life of the project, and will result in a detailed operational and financial plan for all development scenarios. The outputs of the study will include the following: - Ore Reserves statement; - Pit design, phasing and cut-off grade strategies; - Optimum mining method and mining schedule; - Stockpiling strategy of ore and intermediate products - Blending criteria into plant or alternative plant entry points; - Processing path calibration; - Product mix and specification; - Logistics alternatives; and - Capital sizing of all parts of the operation, The Company anticipates completion of mine site optimisation during the latter part of 2010. Nolans Mine Site Environmental Assessment - Groundwater Studies Arafura will acquire additional detailed data to complete the environmental impact assessment ("EIS") of the Nolans site necessary for regulatory approval of the mine.

A contract for on-site programs relating to groundwater (hydrological) investigations at Nolans has now been awarded to H2O Drilling. This work is anticipated to commence in early April, and will involve: - Drilling and subsequent testing of the groundwater environment at Nolans and the construction of bores for ongoing sampling and monitoring; - Drilling of a pastoral bore to replace Nolans Bore, which will be lost when mining commences; and - Drilling of production bores east of the Stuart Highway to provide water (process and potable) for mine site operations. - These groundwater studies are an important aspect of the EIS.

It is expected that interpretation and modelling of the groundwater data will be ongoing until completion of the mine site EIS, targeted for the end of 2010. Arafuras Managing Director and CEO, Dr Steve Ward, said, "Our recent capital raising efforts have been successful in attracting funds, due to heightened awareness across the globe as to the strategic and commercial importance of rare earths to our way of life and the growing recognition of the significance of the Nolans Project as a future source of rare earths to users worldwide.

These new funds are allowing us to step up our Nolans Project activities.

Shareholders can now expect to see Arafura increasing the pace of delivery of all aspects of the Nolans Project as we move towards production in 2013." In recent weeks Arafura has advised of capital raising initiatives (ASX:ARU 23/02/10) where it successfully placed 28.2 million shares at A$0.62 per share with accredited institutional investors and sophisticated investors, and initiated a 1 for 10 pro-rata renounceable Rights Issue to eligible Shareholders, also at A$0.62 per share.

The Rights Issue is in progress, and the closing date for receipt of acceptances is 23 March 2010.

Taken together, the Placement and Rights Issue have the potential to raise up to A$35.3 million before issue costs.
To download the presentation click here:
For more information contact: Steve Ward Managing Director and CEO Arafura Resources Limited T: +61 (8) 6210 7666 Felicity Nuttall Professional Public Relations T: +61 (8) 9388 0944 M: +61 (0)430 184 599 E:
--------------------------------------------------------------------------- This email was sent by Melanie Gray, PPR (WA) Pty Ltd, Level 1, 588 Hay Street, Subiaco WA 6008 Western Australia to Unsubscribe: http://esp.gewru.com/forms/u/d047958/12414/1784979433.html ---------------------------------------------------------------------------