Defense Metals to address RARE EARTH supply concerns
Defense Metals Corp. [DEFN-TSXV; DFMTF-OTCQB; 35D-FSE] is positioning itself to be a future supplier of critical material for the global green agenda.
It aims to achieve that goal by meeting the expected growing demand for North American-sourced rare earth elements (REE) by advancing its 100%-owned Wicheeda rare earths property, recently acquired by the takeover of Spectrum Mining Corp. The road-accessible project is located 80 km northwest northeast of Prince George, central British Columbia.
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.
In November 2021, Defense Metals announced an updated resource estimate for Wicheeda, marking a 36% increase in contained metal compared to previous estimates. The project is now estimated to contain an Indicated Resource of 5.03 million tonnes averaging 2.95% TREO (total rare earth oxide) and Inferred Resources of 29.5 million tonnes averaging 1.83% TREO, reported at a cut-off grade of 0.5% TREO contained within the Lerchs-Grossman (LG) optimized pit shell.
A recent Preliminary Economic Assessment (PEA) pegs the pre-tax net present value (NPV) at $760.585 million ($516.500 million after tax, at an 8% discount rated). The PEA envisages an initial capital expenditure of $440.068 million and average annual REO production of 25,423 tonnes. Mine life would be 16 years, a Post-tax IRR of 18% and a 5-year payback period with an average production rate after ramp-up of 1.73 million tonnes/year. Total operating costs would be $90.64/tonne. Net revenue from concentrate is $862.520 million and net revenue from precipitate is $5,236.095 million.
Conventional metallurgy has yielded high grade saleable REE flotation concentrates (52% REO in pilot plant). The company is hoping to begin small scale production at a demonstration plant in 2023.
Defense Metals recently appointed Dr. Luisa Moreno as president and director. Dr. William Bird has been appointed to the board of directors.
Craig Taylor, CEO, commented: “With the recent completion of a positive and robust PEA, and 100% acquisition of the Wicheeda project, Defense Metals is entering into a new phase of development, and we are delighted to have the extensive rare earth expertise of Dr. Moreno as president and Dr. Bird as a director.”
On February 2, 2022, Defense Metals shares were trading at 27.5 cents in a 52-week range of 75 cents and 21 cents, leaving the company with market cap of $44.16 million, based on 160,591,221 million shares outstanding.