Defense Metals set for significant progress at B.C. rare earths project

Defense Metals Corp. [DEFN-TSXV, DFMTF-OTCQB, 35D-FSE] Executive Chairman Guy de Selliers says the company is poised to make significant progress in developing its “world-class” Wicheeda rare-earths deposit in British Columbia.

Whiceeda is an advanced mineral project with a measured resource of 6.4 million tonnes, averaging 2.86% total rare earth oxides (TRE0), including an indicated resource of 27.8 million tonnes averaging 1.84% TREO, and an inferred resource of 11.1 million tonnes, averaging 1.02% TREO. The project is located 80 kilometres northeast of the City of Prince George.

In a letter to shareholders, de Selliers said the company recently strengthened its management team by naming Mark Tory as CEO and is expected to announce the results of a pre-feasibility study in early February, 2025.

“Having raised $4 million in October, we have the resources necessary to finalize our prefeasibility study,’’ de $1.7 million as part of that fundraise,’’ he said. “Because of the urgency of raising these funds and the difficult market conditions, this was done through a secured convertible note. I would like to stress that these notes automatically convert to equity in the context of any future equity financing over $4 million in order to eliminate any debt overhang that could be of concert to investors.’’

In the letter, de Selliers went on to say that  the company is in constructive discussions with a number of potential partners and offtakers, many of whom, he said, have received samples of the company’s concentrate/carbonate produced during pilot plant testing. “Rather pleasingly, all sample recipients have reacted positively and confirmed their potential interest,’’ he said.

Defense Metals shares were unchanged at 18.5 cents and trade in a 52-week range of 27.5 cents and $0.07.

Meanwhile, de Selliers said the rare-earths reference price has started to recover from the last’s summer’s lows and is projected to continue to do so as forecasted by Argus in a recent report and by most analysts. “Our share price has also now rebounded quite substantially.’’

Rare earth elements are a group of 15 elements with names like Neodymium, Terbium and Dysprosium, and which are vital to green technology and high-tech applications. For example, Neodymium-Praseodymium (NdPr)-based magnets are found in 93% of all electric vehicle motors, a scenario that could lead to a supply deficit if the electric vehicle adoption rates continue to rise.

But since China’s dominant position in this market has sparked supply concerns, the industry world is looking for alternative sources of supply.

Early in 2024, Defense Metals and the McLeod Lake Indian Band (MLIB) announced a strategic equity partnership and co-design agreement, a move that they say solidifies their joint commitment to the Wicheeda project.

The MLIB has acquired a “meaningful equity stake” of approximately 2.6 million common shares of Defense Metals, which aims to capitalize on the expected growing demand for North American-sourced rare earth elements (REE) by advancing its Wicheeda property. The project covers 8,301 hectares and is located on the traditional territory of the MLIB.