Vital Metals Ltd (ASX:VML) has signed a binding term sheet with Saskatchewan Research Council (SRC) to negotiate definitive agreements for the construction and operation of a rare earth extraction plant in Saskatoon, Canada, to produce mixed rare earth carbonate products.
Last month, the government of Saskatchewan and the SRC announced a C$31 million funding package for the construction of Canada’s first rare earth processing and separating facility in Saskatoon.
Vital’s proposed rare-earth extraction plant is planned to be adjacent to SRC’s separation plant, which will convert mixed rare earth carbonate to commercial grade-separated rare earth oxides
SRC’s facility will require mixed rare earth carbonate product for separation making Vital a likely customer.
Vital Metals’ managing director Geoff Atkins said: “The signing of this term sheet with SRC marks an important milestone for Vital and the development of the Nechalacho project.
“Whilst the definitive agreements continue to be finalised in line with the term sheet, the company is excited about the prospect of the construction and operation of a rare earth demonstration extraction plant, as well as it being co-located with SRC’s recently announced rare earth separation plant.
“Being the only rare earth project in Canada with near-term production capability, co-located with Canada’s only separation facility, provides Vital the opportunity to be a cornerstone of the North America Critical Minerals Strategy.”
The SRC rare earth processing facility will include the construction and operation of a rare-earth separation plant, which will convert mixed rare earth carbonate feedstock into commercial grade-separated rare earth oxides.
Construction is anticipated to start in the fourth quarter of 2021 and the plant is expected to be fully operational in late 2022.
Rare earth extraction plant
Vital has signed the binding term with SRC through its 100% subsidiary Cheetah Resources.
The capital cost of the proposed rare earth extraction plant by Vital is estimated to be around $5.25 million.
Subject to execution of definitive agreements, processing operations are scheduled to start in the third quarter of 2021 while offtake negotiations are progressing well with several non-China buyers.
With a target of becoming the largest independent supplier of clean mixed rare earth feedstock outside China, Vital is focusing on a three-stage development approach over the next five years.
The key to the approach is the recognition that before accepting large volumes of feedstock from a new supplier, separation facilities require a transition period whereby they can incrementally increase the volume of new feedstock which will be accepted and processed through their facilities.