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Greenland Minerals and Energy unveils massive Kvanefjeld Ore Reserve

This is just an initial Ore Reserve and would be sufficient for a significant 37 years of operation at the projected production rate of 3 million tonnes per annum. It reinforces Kvanefjeld project’s status as one of the most advanced and significant emerging projects in the rare earth and uranium sectors globally.
Greenland Minerals and Energy unveils massive Kvanefjeld Ore Reserve

Greenland Minerals and Energy (ASX:GGG) has defined a mighty initial JORC 2012 Ore Reserve of 108 million tonnes at 14,300ppm total rare earth oxides, 362ppm U3O8 and 2,600ppm zinc for its Kvanefjeld rare earth-uranium Project.

Notably, this is sufficient to sustain 37 years of operation, inclusive of ramp-up, at the projected production rate of 3 million tonnes per annum.

The Ore Reserves are situated in the upper part of the Kvanefjeld Deposit, the largest of three defined mineral resources within the broader Kvanefjeld Project area.

This follows on its recent Feasibility Study that placed the project in Greenland amongst the lowest cost producers after by product credits.

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 $1,361 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%.

“An initial ore reserve of 108 million tonnes is an outstanding result, and is another really important project milestone,” managing director Dr John Mair said.

“It takes a lot of work across numerous disciplines to achieve this level of confidence. The Ore Reserves reinforce Kvanefjeld’s status as one of the most advanced and significant emerging projects in the rare earth and uranium sectors globally.”


Kvanefjeld Project


The Kvanefjeld Project is located near existing infrastructure and townships in southern Greenland, with direct shipping access year round, and an international airport only 35 kilometres away.

It is centred on the northern Illimaussaq Intrusive Complex, a layered peralkaline intrusive body measuring approximately 8 kilometres by 15 kilometres.

The complex features highly unusual rock-types and minerals, and locally is strongly enriched in a variety of rare elements.

Three large rare earth-uranium deposits have been established in the project area, and are named Kvanefjeld, Sørensen and Zone 3.

Collectively, these deposits account for a global resource base of 1.01 billion tonnes containing 11.14 million tonnes of rare earth oxide, and 573 million pounds of U3 O8

The Kvanefjeld deposit is the best constrained with an Ore Reserve now established, and is the start point of proposed operations.

Mining will be from an open cut pit. The mine will have a low strip ratio with the highest grades present near-surface.

Processing facilities consisting of a concentrator and a refinery will be located adjacent to the Complex.

Its 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’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).

It will also produce uranium oxide, lanthanum and cerium products, zinc concentrate and fluorspar.

The company expects to submit its full exploitation license application once the environmental and social impact assessments are completed later this year.


Analysis


Greenland Minerals and Energy is stepping on the pedal with the maiden Ore Reserve for its Kvanefjeld rare earth-uranium project following closely behind the Feasibility Study.

That the Ore Reserve is sufficient for a 37 year mine life provides certainty and also underscores the scale of this massive project and this just covers the upper part of the Kvanefjeld Deposit.

It is also well-timed with China’s consolidation of its rare earth industry and with a strengthening outlook for uranium prices amid heightened demand from Asia.
 
GGG is continuing to progress with NFC with an increasing focus on commercial aspects now the feasibility study has been completed.

It is also looking to firm up other groups that are interested in investing in the support infrastructure such as the port, power and accommodation village.

Share Price Catalysts


- Completion of impact assessments;
- Submission of exploitation (mining) licence; and
- Outcomes from pilot plant operation in Europe.

 

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