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Greenland Minerals and Energy buoyed by large increases in rare earth concentrate grades

Further positive results from ongoing optimisation have Kvanefjeld on track to be one of the simplest, lowest-cost rare earth producers globally.
Picture of kvanefjeld project site
Confirmation of an increase in concentrate grade opens up export opportunities

Greenland Minerals and Energy Ltd (ASX:GGG) has received further promising results from the optimisation program being conducted on rare earths from the Kvanefjeld project in Greenland.

Major shareholder Shenghe Resources Holding Co Ltd (SHA:600392) and Greenland Minerals are conducting technical work programs.

These are aimed at improving the metallurgical performance and cost-structure of the Kvanefjeld project.

The project hosts rare earth elements, uranium and zinc, making it leveraged to initiatives being undertaken to generate clean energy.

Mair underlines low-cost potential

Managing director John Mair said: “Further positive results from ongoing optimisation have Kvanefjeld on track to be one of the simplest, lowest-cost rare earth producers globally.

“Shenghe has been thorough in guiding the flotation test work at leading technical institutes that are developing the best possible flotation method.”

A large global producer

Kvanefjeld is projected to be one of the largest producers of magnet metals including neodymium, praseodymium, dysprosium and terbium.

Metallurgical test work has now been completed with two Chinese institutes.

They have separately developed flotation methods to concentrate the unique, advantageous rare earth minerals from Kvanefjeld.

Development of flotation reagents

The Institute of Multipurpose Utilisation of Mineral Resources – Chinese Academy of Geological Sciences (IMUMR) based in Chengdu in Sichuan Province was engaged first.

They have developed flotation reagents and methods which have been successfully commercialised.

Test work with IMUMR began in May 2017 with initial results announced in December 2017.

Baotou Meng Rong Fine Materials Co Ltd (BTMR) was the second institute engaged.

Test work with the BTMR commenced in February 2018 and is ongoing, with promising initial results.

Grades well above feasibility study

The results of further flotation test work in China have been encouraging.

There is strong potential that a substantially enhanced mineral concentrate grade approaching 25% rare earth oxide (REO) will be achieved, without recovery losses.

Notably, the Kvanefjeld feasibility study used a mineral concentrate grade of 14% REO, well below the grades achieved by the revised flotation processes under development.

Feasibility study points to a US$1.6 billion project

Kvanefjeld is one of the world's most advanced rare earth and uranium projects with a defined compliant resource of over 1 billion tonnes containing 11.1 million tonnes of rare earth oxide and 593 million pounds of uranium.

As per the April 2016 updated feasibility study, the net present value of the project is US$1.59 billion and the internal rate of return is 43.4%.

Based on an ore reserve of 108 million tonnes, the project has an initial mine life of 37 years.

This ore reserve only represents circa 10% of the 1 billion tonne-plus resource estimate.

Project financing costs are US$831.9 million with a payback period of 5 years.

Reduced capital expenditure and operating costs

The significant increase in mineral concentrate grade with a reduced mass of solids would result in substantial reductions in the size of processing equipment.

Mair said: “These advancements strengthen confidence in simplifying the processing route and increasing efficiency leading to material reductions in operating and capital costs.”

Test work on the atmospheric leach circuit continues in parallel with flotation work.

Direct export would be an option

The production of a mineral concentrate with an REO grade approaching 25% makes the direct export of mineral concentrate from Greenland a potential option.

At this concentrate grade, the value of the contained rare earths per kilogram of concentrate exceeds that of traded nickel, zinc and copper commercial concentrates.

Mair said: “Further confirmation of an increase in concentrate grade toward 25% REO and the significant increase in contained value, creates the potential to stage development through an initial export of mineral concentrate.”

Pilot plant validation

Test work is continuing in China that aims to further optimise each processing method.

Validation test work will then be conducted in Perth later this month to determine the preferred method, overseen by Chinese technical experts.

The preferred method will then be evaluated at pilot plant scale under guidance from Shenghe.

Aiming to de-risk at pilot plant scale

Mair said: “We are determining the preferred method that we will look to de-risk at pilot plant scale in the coming months.

“The integration of leading rare earth processing technology with one of the world’s most significant emerging rare earth projects continues to deliver exceptional results.”

Greenland Minerals is continuing to investigate the economic and regulatory considerations of shipping of rare earths mineral concentrate.

READ: Greenland Minerals and Energy flags imminent release of impact assessment studies at Kvanefjeld

This will assist the company in determining the best strategy for a staged development operation.

In the interim, the company is preparing to release impact assessment studies.

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