22 December 2022
Vital Metals Limited (ASX: VML l OTCQB: VTMXF) (“Vital”, “Vital Metals” or “the Company”) provide an update on development of its rare earth mining and processing operations in Canada.
Strategy Update
Following recent management changes and a review of progress with construction and costs at the Saskatoon processing facility, the Company is pivoting to a sharper focus on advancing the world- class Tardiff Deposit at the Nechalacho Project in Canada’s Northwest Territories.
Tardiff is a large deposit (currently 95mt at 1.46% TREO including 0.35% NdPr for over 330,000 contained tons of NdPr) which has the potential to anchor what we believe will ultimately be a globally significant producer of rare earth minerals. Deposits of this quality, located in a stable and mining-friendly jurisdiction such as Canada, are very rare and demand a coherent development strategy.
While the Company is committed to completing the Saskatoon facility and establishing a sustainable business model for the plant, the primary focus for Vital will be the delivery of a Definitive Feasibility Study (“DFS”) and permitting for the larger Nechalacho Project.
As an interim step, the Company is commencing an initial economic assessment of Nechalacho incorporating the soon to be released 2023 Mineral Resource Estimate (“MRE”). This initial economic assessment will provide a roadmap for the potential of the broader Nechalacho Project and will form a key plank of our discussions to showcase Nechalacho to investors, offtakers and government partners. The initial economic assessment is due to be completed mid-2023.
Following completion of the initial economic assessment, Vital intends to move directly into the DFS process. The basis for the DFS will be an updated MRE which will be informed by the results of the Q1 2023 and Q1 2024 drilling campaigns. A key component of these campaigns will be to infill the inferred portions of the current resource with the objective of increasing confidence and ultimately providing sufficient measured and indicated material for the calculation of a significant reserve.
Core components of the DFS will include the process flow sheet design, capital and operating costs, environmental and permitting aspects as well as details of our engagement with our First Nations hosts. Vital looks forward to providing investors with regular reports as we progress through these items.
To support the efficient and timely delivery of these studies, the Company is in the final stages of appointing an experienced Study Director to assist and guide our technical team.
Saskatoon Processing Facility
Vital remains committed to the completion of its rare earth processing facility in Saskatoon, Saskatchewan. To better align capital expenditure with the anticipated timing of revenues based on Vital's offtake partner's plant completion, the Company has taken the decision to defer the completion of the rare earth hydrometallurgical leaching, purification and rare earth precipitation circuits of the facility until 2024.
This deferment will have the benefit of preserving cash reserves whilst aligning the timing of production of rare earth carbonate until Vital’s offtake partner, REEtec, completes its plant in Norway which is expected by H2 CY2024.
In the interim, Vital will continue construction activity to complete the calcine circuit at Saskatoon in Q3 CY2023. This will enable the Company to process material from its Nechalacho mine and produce an intermediate rare earth oxide product. Vital intends to sell an intermediate rare earth oxide to third parties ahead of commencing deliveries of the final rare earth carbonate product to REEtec in H2 CY2024.
The amount spent to date on the Saskatoon Refinery is approximately A$19.7 million with the cost to complete the full Saskatoon processing facility estimated at A$40.8 million for a revised total cost of approximately A$60.5 million for the full project. Increased capital costs are attributable to the decision to expand capacity of the processing facility from 500 to 1,000 tonnes per annum of NdPr, execution challenges, scoping changes and industry inflation.
The decision to defer the hydrometallurgical leaching, purification and rare earth precipitation circuits of the facility is expected to delay approximately A$17.4 million of the abovementioned cost to complete until CY2024. At this point, it is expected that REEtec’s facility will be ready to accept the rare earth carbonate product.
Vital Metals Managing Director John Dorward said: “After visiting Saskatoon last week, I came away impressed with the calibre of the new operations team under the leadership of our recently appointed Chief Operating Officer, Eben Visser. A large component of our efforts in 2023 will be to deliver a sustainable business plan for the Saskatoon Plant which will include securing additional feed from Nechalacho and potentially third- party sources”.
Nechalacho Drilling
Vital has received tenders from several local drilling companies and expects to commence drilling at Nechalacho in Q1 CY2023. The planned program will consist of 5,500 metres of diamond drilling with a focus on in-filling the Tardiff Deposit to increase confidence in the large resource. Given dependence upon logistics, including the establishment of ice-road access, this H1 CY2023 program may be shortened or extended as conditions permit.
Tardiff is a shallow, thick, flat-lying orebody with previous drilling by Vital indicating some impressive results including:
(See press releases dated 26 May 2021, 3 August 2021 and 22 July 2022)
In addition to the Tardiff drill program, the Company will undertake further infill and extension drilling of the high-grade North T deposit. This is anticipated to provide the inputs for a revised mining plan for North T in H2 CY2023.
Should conditions and logistics allow, Vital is also planning an initial drilling campaign on a shallow xenotime target between North T and Tardiff. Historical results have been encouraging, and the Company considers that there is sufficient encouragement to follow this up as a potentially attractive source of valuable heavy rare earth elements including terbium and dysprosium.
An updated resource estimate for Nechalacho is scheduled for release in Q1 CY2023 which will include the additional drill results from the 2021/2022 drilling programs.
Critical Minerals Strategy
Vital Metals congratulates the Government of Canada on its recently released and far-ranging Critical Minerals Strategy (CMS). Vital’s values of ESG, Indigenous participation, reducing environmental impact, and diversity and inclusion reflect the values and goals of Canada’s CMS. Guided by the CMS, Vital will continue to work closely with Canada to build the rare earth extraction and processing value chains to supply the green and emerging industries of Canada and its aligned countries.
Upcoming Catalysts
|
Updated resource estimate for the Tardiff Deposit at Nechalacho |
Q1 CY2023 |
|
Commencement of drilling at Nechalacho |
Q1 CY2023 |
|
Drilling results from Nechalacho |
Q2/3 CY2023 |
|
Completion of initial economic assessment |
Q3 CY2023 |
|
Completion of Saskatoon Calcine Circuit |
Q3 CY2023 |
- ENDS-