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Better economics at the Eco Ridge rare earths and uranium project has extended the life of the proposed mine by three years, Pele Mountain Resources (TSXV:GEM) announced on Thursday.
Better economics at the Eco Ridge rare earths and uranium project has extended the life of the proposed mine by three years, Pele Mountain Resources (TSXV:GEM) announced on Thursday.
The Toronto-based company is developing the Eco Ridge project in Elliott Lake, Ontario, a historical producer of heavy rare earths and the only Canadian mine to have reached commercial rare earth production, according to Pele Mountain.
A preliminary economic assessment (PEA) released in 2012 highlights an 11-percent increase in indicated resources, to 22.74 million tonnes, and a 116-percent increase in inferred resources. The latter includes a 136-percent increase in uranium oxide (U3O8), to 37.62 million pounds, and a 130-percent increase in total rare earth oxides, to 125.25 million pounds.
The economic review released Thursday increases the life of mine from 11 years to 14, with subsequent increases in both U3O8 and rare earth oxide (REO) production. The mine would produce 46 percent more REOs, for a total of 141.6 million pounds, and 55 percent more U3O8, at 42.7 million pounds. Most of the mine’s revenue, 90 percent, would come from neodymium oxide and U3O8. The deposit also contains dysprosium, yttrium and quantities of terbium, europium and scandium.
The project’s net present value remains the same, at $1.02 billion, but its pre-tax internal rate of return slipped from 50 percent to 43 percent due to a 30-percent decrease in REO prices, Pele Mountain said. Capital expenditures will also go up by $33 million due to the longer mine life.
“The economic review demonstrates, once again, that our Eco Ridge Mine Project has excellent economic potential. Eco Ridge is ideally situated in the historic Elliot Lake Mining camp, which contains one of the largest and most readily accessible concentrations of critical rare earths in North America. We are focused on the sustainable development of a safe, secure, and reliable Canadian REO supply chain that will support downstream value chain opportunities within North America,” said Pele Mountain President and CEO Al Shefsky.
Securities Disclosure: I, Andrew Topf, hold no direct investment interest in any company mentioned in this article.