Great Western Minerals (TSXV:GWG) announced positive results from it’s Preliminary Economic Assessment for the Steenkamskraal rare earth project in South Africa.
On March 18, Great Western Minerals (TSXV:GWG) announced positive results from it’s Preliminary Economic Assessment for the Steenkamskraal rare earth project in South Africa. The results of the PEA show a strong potential for GWMG’s integrated business model.
President and Chief Executive Officer Marc LeVier for GWMG said, “The PEA conducted on the Steenkampskraal project confirms our internal projections of a high grade and excellent distribution of the critical rare earth elements”.
The release of GWMG’s PEA comes on the heels of the announcement from the company that its wholly owned subsidiary Less Common Metals (LCM), began commercial production with its first rare earth alloy strip casting. The company is one of the few rare earth companies outside of China that are vertically integrated. LCM has successfully sold and shipped its specialty alloys to three existing customers with subsequent orders schedule for deliver by in Q1 2013. A second casting furnace has been commissioned and is scheduled for early Q2 2013.
Highlights from the company’s PEA include:
- $555 Million after-tax net present value (“NPV”) applying a 10% discount rate and a 28% South African corporate tax rate
- 66% after-tax internal rate of return (“IRR”)
- 4.3 year estimated Project payback period, on an after-tax basis, from start of underground mining production.
- 11 year potential life of mine
The PEA was filed based on the Mineral Resource Estimate for the Steenkamskraal deposit filed earlier in March which included a 278,000 tonnes of inferred mineral resources at an average grade of 15.2% TREO and 176,000 tonnes of indicated mineral resources at an average grade of 18.2% TREO, each using a 1% TREO cut-off grade.
LeVier commented that ” The impressive, high-grade nature of Steenkampskraal translates into lower tonnages for processing, which in turn, results in low capital cost requirements relative to other REE projects.”
LeVier went on to say that work undertaken on the project so far includes accelerated metallurgical testing program aimed at enabling GWMG to advance the project rapidly. “This ‘early mover’ status, combined with GWMG’s existing alloy manufacturing capacity, positions GWMG very favourably.”
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.