Arafura Rare Earths' (ASX:ARU) Arafura Nolans Project subsidiary entered into a compensation deed with ATAYF Pastoralists, the holder of the pastoral lease covering the Nolans project in the Northern Territory, according to a Tuesday filing with the Australian bourse.

The compensation will be satisfied through the issue of shares worth AU$4 million, with ATAYF Pastoralists also making a cash investment of AU$1.2 million into the company, the filing said.

The company also agreed to acquire existing camp infrastructure at the project for AU$6.8 million to allow for mobilization and access to facilities, per the filing.

Shares rose 1% in morning trade on Tuesday.