Greenland Minerals and Energy Announces Kvanefjeld Feasibility Study

Greenland Minerals and Energy (ASX:GGG) announced results of a feasibility study for its Kvanefjeld rare earth-uranium project in Greenland. According to the company’s release, the project features favourable metallurgy and includes several changes from a 2013 mine and concentrator study for the project.

As quoted in the press release:

• The Kvanefjeld resource (>1 billion tonnes, JORC-code 2012) will support an initial mine life of 37 years and provide scope to both expand production and extend the life of the mine significantly.
• The Project will produce rare earth products, uranium oxide, zinc concentrate and fluorspar.
• The capital cost of the Project is $1,361M, comprising $1,121 M of project costs (plant, utilities, indirect costs and contingency) and US$240 M of associated infrastructure costs (power, port, village).
• The cost of producing the primary product, a critical rare earth concentrate, is US$8.56/kg REO (after by-product credits) making Kvanefjeld one of the world’s lowest cost rare earth producers.
• The Project has an after tax net present value of US$1.4 Billion (at a discount rate of 8%) and an internal rate of return of 21.8%.
• The forecast basket price for the Company’s critical rare earth concentrate is US$78.6/kg REO producing an operating margin of approximately US$70/kg.
• The incremental cost of recovering the uranium from the high-grade mineral concentrate is less than US$6/lb U3O8, which will place Kvanefjeld into the bottom quartile of the cost curve for current uranium production

Changes from the previous study included:

The capital cost of the Project has increased since GMEL released the results of its ‘Mine and Concentrator Study’ in 2013. The increase reflects the fact that, in order to comply with Greenland’s Mining Act, which requires that as much downstream processing as feasibly possible be conducted in Greenland, the Project’s refinery has been relocated to Greenland. The Mine and Concentrator Study had considered the establishment of a dedicated rare earth refinery outside of Greenland in an industrial environment served by appropriate infrastructure. In addition to this change, lanthanum and cerium separation has been introduced to the refining circuit. Despite the increase in capital cost, the NPV generated by both studies is similar, largely due to improved processing efficiency and product recoveries.

Click here to read the Greenland Minerals and Energy (ASX:GGG) press release