Greenland Minerals and Energy's (ASX: GGG) flagship project is Kvanefjeld, a multi-element deposit located near the southwest tip of Greenland. Kvanefjeld is rapidly growing into one of the world’s largest undeveloped deposits of rare earth elements, uranium and naturally occurring sodium fluoride.
Greenland Minerals and Energy's (ASX: GGG) successful drilling campaigns at multi-element project in Greenland have delivered a maiden JORC Resource for Zone 3, independently prepared by SRK Consulting.
Zone 3 was discovered late in the 2008 field season when a series of initial holes were collared into outcropping lujavrite along the northeastern margin of the Ilimaussaq Complex.
Highlighting the exploration upside and sheer scale of the project, the new Zone 3 resource increases the global metal inventory at the project to a 575 million pounds of uranium, 10.3 million tonnes of TREO, and 2.24 million tonnes of zinc.
The rare earth resource inventory includes 370,000 tonnes of heavy REO, and 840,000 tonnes of Y2O3.
The Zone 3 resources are the same resources hosted by the same rock-type as Kvanefjeld, which are conducive to the same enhanced processing method identified in the recent Pre-Feasibility Study.
Zone 3 inferred mineral resource is 95 million tonnes at 300 ppm U3O8, 1.16% total rare earth oxide (TREO), and 0.28% zinc, for a contained metal inventory is 63 million pounds uranium, and 1.11 million tonnes TREO.
Adding exploration upside potential to the Zone 3 resource, it remains open to the north, south, west and at depth.
Product development from Kvanefjeld demonstrated in PFS
The recent Pre-Feasibility Study identified the clear potential for Kvanefjeld to be developed as a long-life, cost effective producer of heavy, light and mixed rare earth concentrates, uranium oxide and zinc.
Further, the production profile is of global significance in terms of output capacity, and low production costs.
Kvanefjeld will be able to generate four main products including a high-grade zinc sulfide concentrate from the Kvanefjeld multi-element project in Greenland, which has been outlined in a Prefeasibility Study.
The development scenario from an annual 7.2 million tonne throughput would provide; Uranium Oxide of 2.6 million pounds, Heavy Rare Earth Hydroxide of 4,200 tonnes, Mixed Rare Earth Carbonate of 10,400 tonnes and Light Rare Earth Carbonate of 26,200 tonnes.
The defining factor though for the development Kvanefjeld is the low production costs, with unit cost under US$31/lb uranium and less than US$8/kg TREO (as contained in the three combined rare earth products).
Putting these costs into perspective, Kvanefjeld will be in the bottom half of the cost curve for uranium producers, while also being one of the lowest cost rare earth elements producers worldwide.
The economics of the project are also robust - with a forecast pre-tax, ungeared internal rate of return of 32%, and a cash payback period of less than 4 years, based on long term prices of US$70/lb uranium and US$41.60/kg TREO. The pre–tax NPV is US$4,631 million.
Capital costs of an open cut mine, a mineral concentrator and a refining plant, capable of treating 7.2 Mtpa, is estimated to cost US$1.53 billion, which includes a contingency of US$247 million.
Strategic location near infrastructure
The Kvanefjeld, Zone 2 and Zone 3 multi-element deposits are hosted within the northern portion of the Ilimaussaq Intrusive Complex, favourably located near existing infrastructure in southern Greenland.
With the finalisation of the initial mineral resource estimate at Zone 3, the broader Northern Ilimaussaq project area is clearly host to one of the world’s largest resources of uranium and rare earth elements.
In May 2012 the Company released a prefeasibility study for the Kvanefjeld project that draws on major technical advances made during 2010 and 2011. The PFS is based on a highly efficient process flowsheet that involves flotation to capture the majority of REE-U bearing minerals into 10% of the original mass.
This mineral concentrate is then leached conventionally under atmospheric conditions to extract >90% of uranium and heavy REEs. The PFS demonstrates the process route to be efficient with low technical risk, and strong economic metrics.
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