(MENAFN- ProactiveInvestors)
() has reached a major milestone with the completion of a Feasibility Study that places the Kvanefjeld rare earth-uranium Project amongst the lowest cost producers after by product credits.
This is also a key component for the application for an exploitation licence.
The Kvanefjeld resource of over a billion tonnes will support a mine life of 37 years and provide scope to both expand production and extend the life of the mine significantly.
Cost of producing its primary product a critical rare earth concentrate is US$8.56 per kilogram or an operating margin of about US$70/kg.
Incremental cost of recovering the uranium from the high-grade mineral concentrate is less than US$6 per pound U3O8 placing Kvanefjeld into the bottom quartile of the cost curve for current uranium production.
The project has a total capital cost of $1361 million with an after-tax net present value of US$1.4 billion at a 8% discount rate and an internal rate of return of 21.8%.
It will produce rare earth products uranium oxide zinc concentrate and fluorspar.
“The Feasibility Study presents a very compelling case for the development of Kvanefjeld and emphasises the project’s standing as a globally-unique mining opportunity” managing director Dr John Mair said.
“Our aim was to deliver a study conducted with a lot of rigour that draws on conservative assumptions and is still able to return strong economic metrics.
“The development strategy takes on board technical regulatory and market considerations. The strategy to develop Kvanefjeld as a dominant long-term producer of critical rare earths at the low end of the cost-curve is very much on track.
“We look forward to completing the impact assessments in order to finalise an exploitation license application and commence the permitting process later this year.”
The company is aiming to complete the environmental and social impact assessments in the third quarter of this year and will subsequently lodge an exploitation license application with the Greenland government.
Kvanefjeld Project
The Feasibility Study incorporates extensive technical environmental and social studies conducted and commissioned by GMEL over the past seven years.
The Study Base-Case evaluates the development of a mine mineral concentrator refinery and supporting infrastructure located in the south west of Greenland treating 3.0 million tonnes per annum of ore.
Kvanefjeld is located near existing infrastructure and townships in southern Greenland with direct shipping acess year round and an international airport only 35 kilometres away.
The Project’s primary product will be a critical mixed rare earth oxide concentrate. Critical rare earths are those rare earths particularly important for green technologies which are forecast to be in short supply over time (neodymium praseodymium europium dysprosium terbium and yttrium).
Kvanefjeld will also produce uranium oxide lanthanum and cerium products zinc concentrate and fluorspar.
The project economics are relatively insensitive to the pricing of these by-products.
Favourable Metallurgy
A key strength of the Project is its attractive metallurgy. Its unique rare earth and uranium bearing minerals can be concentrated into less than 10% of the original ore mass utilising froth flotation.
The minerals are also non-refractory and can be effectively treated using an atmospheric sulphuric acid leach.
There is no requirement for complex mineral “cracking”.
The process flow sheet has been rigorously developed by GMEL and has been the subject of extensive test work including three pilot plant campaigns.
Rare Earth Business Strategy
GGG continues to advance its dialogue with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd. (NFC) under the terms of a ‘Memorandum of Understanding’.
NFC and GMEL are working to cooperate on the separation of the critical rare earth concentrates from Kvanefjeld into high-purity individual rare earth oxides and the subsequent product marketing to end-users globally.
NFC is a leader in rare earth separation technology and is also a highly-reputed engineering procurement construction (EPC) contractor.
It was involved in the preparation of the Feasibility Study and completed the capital cost estimate based on detailed engineering design conducted by Tetra Tech Proteus.
Changes from Previous Kvanefjeld Study
The project’s capital cost has increased since the ‘Mine and Concentrator Study’ in 2013 due to the need to comply with Greenland’s Mining Act which requires that as much downstream processing as feasibly possible be conducted in Greenland.
As a result the project’s refinery has been relocated to Greenland rather than establishing it outside of Greenland in an industrial environment served by appropriate infrastructure.
In addition to this change lanthanum and cerium separation has been introduced to the refining circuit.
Despite the increase in capital cost the NPV generated by both studies is similar largely due to improved processing efficiency and product recoveries.
Developing story…
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