The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
REE mining at Nechalacho NWT on pace for start by mid-year North of 60 Mining News – May 3, 2021
Left to right – Vital Metals Vice President of Corporate Affairs and Strategy David Connelly, Yellowknife Dene First Nation Chief Ernest Betsina, and Vital Metals Canadian Operations Manager Ray Anguelov cut the ribbon on an industrial ice road built to deliver equipment and supplies to the Nechalacho rare earths mine project in Northwest Territories.
A truckload of ammonia nitrate being delivered to Nechalacho Mine via the newly constructed ice road on Great Slave Lake.
Advancing at a pace not typically seen in the mining industry, Australia-based Vital Metals Ltd. has surpassed several milestones during the first quarter of 2021 toward its goal of producing rare earth oxides from its Nechalacho project in Northwest Territories by mid-year.
"Vital Metals is on its way to becoming Canada's first rare earths producer – and only the second in North America – within weeks following the mobilization of our mining fleet and I look forward to keeping our shareholders up to date on our progress towards that goal," said Vital Metals Managing Director Geoff Atkins.
This is an amazing feat when you consider that Vital's Canadian subsidiary, Cheetah Resources Pty Ltd., only began implementing a plan to advance Nechalacho from an exploration project to a rare earths producer in 2019.
A rapidly moving mine development project typically takes at least four years from concept to production, and most mining projects would take closer to a decade to begin delivering products to market.
The ability to produce rare earth oxides at Nechalacho in just over two years is due to Vital choosing a power-of-partnerships strategy over the economies-of-scale model typically implemented at mining projects.
Instead of looking to establish a mine large enough to support a processing facility, which often takes years of permitting and investments that are measured in the hundreds of millions of dollars, Vital sought out a near-surface, high-grade rare earths project with simple ore-sorting technology. Without the need for a complex ore processing facility, the coming Nechalacho Mine is something akin to a gravel quarry – simply mine and crush near-surface rock and sort out the best material to be transported.
Ore sorting tests using x-ray transmission (XRT) technology upgraded Nechalacho material with an average grade of 10.5% rare earth oxides to a rough concentrate averaging 36% REO, while retaining about 70% of the available rare earths.
This intermediary product will be upgraded at Vital's rare earth extraction plant in Saskatoon, Saskatchewan before being shipped to Norway-based REEtec to separate first high purity rare earths out of the concentrates later this year.
Vital made major progress toward every step of this compartmentalized strategy during the first three months of 2021.
"The March quarter has seen us achieve several major milestones on our way to commencing rare earth production at Nechalacho in the current quarter, including a transformational A$43 million (US$33.4 million) placement that fully funds our operations into production and validates our strategy to produce rare earths for a globally diversified supply chain," said Atkins.
Local partnerships
Vital's power-of-partnerships rare earths production strategy begins with a local First Nations company that is carrying out the mining at Nechalacho.
In January, Det'on Cho Nahanni Construction Ltd., a Northwest Territories-based company 51% owned by Det'on Cho Corporation, which is in turn owned by the Yellowknives Dene First Nation, entered into a contract with Vital to carry out the mining and other earthworks at Nechalacho.
"The Yellowknives Dene First Nation is pleased to be the first Indigenous group in Canada to be responsible for mineral extraction on their traditional territory," Yellowknives Dene First Nations Chief Ernest Betsina said earlier this year. "When indigenous people conduct the mining operations, they are better able to control the process, resulting in better safeguarding of the environment."
After mobilizing equipment and supplies to Nechalacho via an ice road by the end of March, Det'on Cho Nahanni began mining ore from a small open pit at North T, a near-surface deposit at Nechalacho that hosts 105,000 metric tons of resource averaging 8.9% (9,345 metric tons) total rare earth oxides. The ore mined from North T will be stockpiled for processing with a sorting plant operated by Cheetah.
It is expected that Det'on Cho Nahanni will be able to stockpile enough ore this summer to feed Cheetah's ore sorting plant through 2023.
Vital anticipates that the First Nation-owned construction company will be needed for a second mining campaign to replenish stockpiles in 2024.
Saskatchewan processing
The upgraded Nechalacho ore will be shipped to Saskatchewan where it will be processed to a product that is ready for separation into the individual rare earths needed for smartphones, electric vehicles, renewable energy generation, and a wide array of high-tech and commercial products.
Last August, the Saskatchewan government announced a C$31 million investment in a rare earth processing facility to be operated by the Saskatchewan Research Council that will help to establish a rare earth supply chain and form a model for future commercialization of REE resources in Canada.
"Saskatchewan's new rare earth processing facility will be a catalyst to stimulate the resource sector in Saskatchewan and across Canada, providing the early-stage supply chain needed to generate cash-flow, investment and industrial growth of the sector," said Saskatchewan Premier Scott Moe.
Further details about this rare-earth facility can be read at Saskatchewan REE separation plant coming in the September 2, 2020 edition of Metal Tech News – https://www.metaltechnews.com/story/2020/09/02/mining-tech/saskatchewan-ree-separation-plant-coming/323.html.
Last September, Cheetah signed an agreement with Saskatchewan Research Council to develop a rare earth carbonate production plant next to SRC's new rare earths facility.
"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," Atkins said.
Norway separation
The final component of Vital's power-of-partnerships strategy is an agreement with Norway-based REEtec to separate the mixed rare earth carbonate product produced in Saskatchewan into the individual rare earth oxides.
"The signing of this agreement will enable REEtec and Vital to work together to supply separated rare earth oxides, which are competitive to products produced anywhere else in the world into the electric vehicle and wind turbine markets," said Atkins.
Under a rare earth offtake and profit-sharing agreement signed in February, Vital will provide REEtec 1,000 metric tons of rare earth oxides per year, not counting the cerium.
The magnet rare earths praseodymium and neodymium are expected to account for roughly 447 metric tons of the annual rare earth oxides covered under the preliminary offtake agreement. When it comes to volume, this would make up roughly 45% of the rare earth oxides mined by Vital and separated by REEtec. When it comes to value, however, these two rare earths account for US$37 million, or roughly 87% of the expected value at current REE prices.
"Through this agreement with Vital Metals, REEtec is taking further steps to secure access to rare earth feedstock and thereby strengthening our ability to offer competitively priced magnetic materials to our customers," said REEtec CEO Sigve Sporstøl.
REEtec says the energy demand for its new and potentially game-changing rare earths separation technology is very low, and the Norwegian company is able to recover and reuse virtually all of the chemicals used, which makes the process highly efficient and environmentally sound.
In March, Vital shipped a 12-kilogram (26 pounds) sample of rare earth carbonate produced from a bulk sampling program at Nechalacho to REEtec.
The company also has prepared additional samples of carbonate which it will make available to other prospective customers.
Larger stage two
As Vital quickly implements the initial steps of its strategy to produce rare earths at Nechalacho, the company is already exploring the potential of a larger second stage – to begin mining at Tardiff, a Nechalacho deposit with 94.7 million metric tons of combined measured, indicated, and inferred resources averaging 1.46% (1.3 million metric tons) total rare earth oxides.
While North T offers an early supply of rare earths, the much larger Tardiff deposit could provide long-term and large-scale security to the rare earth supply chain.
A 1,800-meter drill program currently underway is testing three high-grade targets in the Tardiff, as well as evaluating potential T Zone expansion targets – South T and S zones.
Previous drilling at Tardiff was primarily focused on Basal, a larger but deeper rare earths zone. This earlier drilling involved multiple holes fanned out from widely spaced drill pads. While this provided good coverage of Basal, it resulted in tight clusters of holes just below each pad at Tardiff.
This year's drilling at Tardiff is focused on filling in between the pads in higher grades subzones identified by the previous drilling.
In addition to assays, the core will be used for metallurgical testing.
"The commencement of this drilling program marks the start of development activities for the larger stage-2 operation," Atkins said in February.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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