Greenland Minerals and Energy signs new MoU with China's NFC| MENAFN.COM

Tuesday, 09 August 2022 10:22 GMT

Greenland Minerals and Energy signs new MoU with China's NFC


(MENAFN- ProactiveInvestors)

Greenland Minerals and Energy (ASX:GGG) has signed a second Memorandum of Understanding with China’s Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd. (NFC) for development of the Kvanefjeld Project in Greenland.

NFC is listed on the Shenzen Stock Exchange (code 000758).

The new MoU sets out the undertakings both parties have made to facilitate the formalisation of this strategy.

The joint development strategy will be formalised in a Strategic Co-operation Agreement which the Parties have committed to work towards completing in 2015.

GGG is drawing closer to completing the Feasibility Study for the project which has massive resources of over a billion tonnes and a Measured Resource of 143 million tonnes.

“The signing of the new MoU reflects the culmination of 12 months of close working co-operation with NFC on many aspects of the Kvanefjeld Project” managing director Dr John Mair said.

“The achievements provide a solid basis to focus on the development strategy and negotiating a strategic cooperation agreement.”

The initial MoU was signed in March 2014 with the objective of investigating the opportunity to establish a fully integrated rare earth supply business from mine to separated high-purity critical rare earth products.


New Agreement

Since the initial MoU a number of key developments have been made. These include:

- Extensive exchange of technical data relating to the Kvanefjeld Project;
- Meetings between senior representatives of both parties in Perth Beijing and Greenland;
- Visits to Perth-based laboratories where major testwork programs have taken place by senior NFC representatives and technical experts; and
- Meetings in Greenland between senior NFC representatives and key Greenland government ministers and officials as well as representatives of important stakeholder groups.

Continuous engagement between the company and NFC over the last 12 months has enabled NFC to develop a thorough understanding of the project from a variety of perspectives that include technical logistical and economic.

The extent to which co-operation between the Company and NFC has developed is evidenced by the fact that NFC have provided the capital cost estimate that will be incorporated in the final Feasibility Study report.

The Study is currently undergoing internal review by GMEL prior to finalisation.

Under the new agreement GGG will be responsible for finalising the exploitation license application and commencing the permitting process.

In addition the company will complete pilot plant operations in the coming months that will provide further confidence and rigour to the proposed process flow sheet.

NFC will provide assistance to GMEL in preparing the exploitation license application and both parties will cooperate in identifying and completing further work programs required for the Project to reach bankable status.


China Non-Ferrous Metal Industry

NFC is a highly-regarded engineering procurement and construction (EPC) contractor and has been rated as one of the world’s top engineering firms.

It has a strong reputation in engineering financing constructing and operating mines smelters and refineries in many parts of the world.

As a result it has the capacity to both produce accurate capital cost estimates for construction projects and to take a key role in the engineering and construction of mine and processing facilities for Kvanefjeld.

NFC’s participation in the rare earth industry comes through its subsidiary Guangdong Zhujiang Rare Earths Company; which holds the distinguished status as the first group to carry out full separation of fifteen rare earth elements in China and is recognised globally as a leader in rare earth separation technology.

It intends to increase its involvement in the global rare earth business and has commenced construction of a new 7000tpa capacity rare earth separation facility.

Upon completion this will be one of the world’s largest and most technologically advanced rare earth separation facilities.

The new facility is designed to process concentrates of a very similar composition to the critical rare earth concentrate to be produced from Kvanefjeld and the capacity of the plant closely matches Project’s projected output for Stage 1.


Analysis

The new Memorandum of Understanding further underscores the support Greenland Minerals and Energy has from NFC and for development of the Kvanefjeld Project.

This allows GGG to focus on the development strategy for the project and provides a price catalyst for GGG in the negotiation of a strategic cooperation agreement.

GGG also remains on track to achieve significant progress at Kvanefjeld in 2015.  It is well funded with a $20 million facility on standby as it looks to execute on its business plan this year.

Proactive Investors continues to see 2015 as the year that GGG makes significant headway at Kvanefjeld already one of the largest and rare earth and uranium projects globally.

As GGG executes on project timelines in 2015 we would expect to see additional investment by pension sovereign and private equity funds as they look to "weight" in the stock - given its scale and dimensions.

Further Share price catalysts include:


- Release of the Feasibility Study;
- Regulatory permitting timelines;
- Defining an initial mine reserve;
- The EURARE pilot plant operations; and
- Improving long term price of uranium.



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