19 April 2023
Vital Metals Limited (ASX: VML l OTCQB: VTMXF) (“Vital”, “Vital Metals” or “the Company”) provides the following update to stakeholders.
As outlined in the Company’s 22 December 2022 ASX announcement, Vital’s increased focus on advancing the Tardiff Project accompanied a review of the Saskatoon Rare Earth Processing Facility. The Company planned to complete the initial calcine circuit and defer the calcine leaching, purification and rare earth carbonate precipitation circuits of the facility to better align its completion with the readiness of its offtake partner to receive the final mixed rare earth carbonate product produced, from mid-2024. Completion of the calcine circuit would enable the Company to investigate the sale of an intermediate product to generate revenue ahead of completing the balance of the facility. However, at the current time, the Company has been unable to secure intermediate product sales on commercially satisfactory terms.
Subsequent review of the economic viability of mining and beneficiating ore at North T has indicated that the scale of operations and associated unit operating costs will not achieve positive cashflow from the project.
As a result, the Company is pausing all construction-related activities at the Saskatoon processing facility, to allow the Company to focus on conserving cash and to seek alternative funding sources and partnering with third parties to potentially build a sustainable business model for the Saskatoon business. The Company expects the strategic review of the Saskatoon Project to be completed in three-months. The Company intends to retain its Saskatoon-based workforce, as these important stakeholders will be integral to allowing for a quick re-start of construction and commissioning activities when the foundations for a long-term, sustainable business model are put in place.
Construction of the full Saskatoon processing facility, including calcine, hydrometallurgical leaching, purification and rare earth precipitation circuits, is approximately 50% complete.
Vital’s Interim Chairman Richard Crookes said the Company has worked hard in recent months to refine the business case for the Saskatoon Project in light of the increased cost profile, lack of an immediate market for our products and lower rare earth prices, leading to a renewed focus on Tardiff. “There is no economic imperative to complete this demonstration Project at the current time; however the Saskatoon processing facility can provide valuable intermediate processing capacity for a downstream
rare earth hub in Saskatchewan. North America needs independent downstream processing to further enable the transition to the green economy and Vital is looking forward to working with like-minded parties to deliver a completed project.”
Vital planned to undertake a 5,500-metre drilling campaign on the Tardiff Deposit during the current winter drilling season at Nechalacho to increase the measured and indicated component of the recently released Mineral Resource Estimate (“MRE”) (see ASX announcement dated 14 February 2023).
This program concluded this week and the target was substantially exceeded with a total of 6,667 metres completed (21% above plan).
The Company expects to start receiving assays from this program in the coming months and looks forward to sharing them with stakeholders. A similar scale project is anticipated for 2024 which will continue to target infill drilling in an effort to raise the classification and confidence in the large Tardiff Deposit.
Vital’s Chief Operating Officer Eben Visser commented that it was very pleasing to see this high level of productivity. “We have made several key hires for Nechalacho this year in health and safety, geology and operations and we are already seeing the benefits of a team of dedicated, experienced professionals. This drilling will underpin the economic studies that are currently planned for the Tardiff Deposit.”
With the recently released Mineral Resource Estimate (MRE), Tardiff is estimated to contain 1.67 million tonnes of TREO within a total mineral resource of 119.0 million tonnes at 1.4% TREO. Within this total, Tardiff is estimated to include 416,000 tonnes of neodymium and praseodymium (“NdPr”), making it one of the largest single deposits in the Western World, with the potential to be one of the largest suppliers of permanent magnet motor minerals in North America.
In addition to the recently completed 2023 drilling program work, VML has continued to advance the Tardiff Project on a number of fronts, including:
In support of the long-term development of the Tardiff Project, the Company recently appointed Steven Woolfenden as Vice President, Sustainability. Steven brings over 25 years of mining industry experience and a history of leading environmental, community, governance and regulatory processes. Previously, Steven held positions as Vice President of Environment and Community Affairs for McEwen Mining and IAMGOLD’s corporate Environment Director where he was responsible for environmental, regulatory and community engagement teams to develop major resource projects and large-scale infrastructure works. He also has more than 10 years of experience in the public sector, with Fisheries and Oceans Canada and the Canadian Environmental Assessment Agency (CEAA).