Greenland Minerals and Energy Limited (ASX:GGG) is investigating direct mineral concentrate sales from its Kvanefjeld Rare Earth Project in Greenland.
A 64% improvement in mineral recoveries revealed by recent test work has prompted the company to consider the direct sales.
This would form part of a phased development strategy for Kvanefjeld and sets the scene for strong news flow in 2018.
The project is forecast to be the world’s largest producer of key rare earth elements including neodymium, praseodymium, dysprosium and terbium.
These elements are essential to high powered permanent magnets used in the electric drive motors of electric vehicles.
Greenland and major shareholder Shenghe Resources Holding Co Ltd, which is a leading rare earth specialist, are investigating the direct concentrate sales.
This work will include engaging with the required regulatory bodies associated with the export of Kvanefjeld mineral concentrate.
Reduction in capital expenditure
Test work by Shenghe has demonstrated that optimising concentrate has potential to drive a substantial reduction in capital expenditure and operating costs.
It means that a refinery would not be required as part of the first phase of operation, and would then be developed as a second phase.
Dr John Mair, managing director, said: “The metallurgical improvements achieved by Shenghe to date are extremely significant.
“They set the scene for an exciting 2018 as we roll-out the integration of Shenghe’s leading rare earth technology and sector experience with the world’s most significant emerging rare earth project in Kvanefjeld.
“The concentrator circuit is just one of a number of focus areas, but increases in the order of 60% in rare earth concentrate grade will have a profoundly positive impact on the efficiency and cost structure of the project.”
Greenland is well-funded to continue optimisation work, update project cost structure, feasibility studies and enhance its development strategy.
Based on an ore reserve of 108 million tonnes, the project has an initial mine-life of 37 years, with the reserve representing only circa 10% of the 1 billion tonne-plus resource estimate.
Key growth catalysts
The key 2018 growth catalysts are:
- Project update drawing on test work conducted jointly with Shenghe through 2017 which is addressing optimisation and integration with downstream processing; and
- Commence update of 2016 feasibility study.
- Update operating costs; and
- Incorporate updated workforce requirements into SIA, conduct required EIA revisions that arise from optimisation.
- Pilot plant operation of final configuration.
- Finalise feasibility study; and
- Revise capital costs.