Greenland Minerals And Energy Closes In On Kvanefjeld Feasibility Study 0 comments

Mar 2, 2015 10:32 PM

Greenland Minerals and Energy (ASX:GGG ) is drawing closer to completing the Feasibility Study for its Kvanefjeld uranium and rare earth project in Greenland.

With a total resource of over a billion tonnes and a measured resource defined, Kvanefjeld is by any stretch a massive project. There is also an initial mine reserve on the way.

In addition, the Environmental and Social Impact Assessments are due to be completed early in the third quarter. These collectively comprise documentation for project permitting.

The company is now looking to firm up permitting timeline with regulatory bodies and will soon establish initial mine reserves.

Pilot plant operations will be conducted this year with funding through the EURARE program.

Co-operation is continuing with China Non-Ferrous Metal Industry (NYSEMKT:NFC ) on establishing a fully integrated rare earth supply chain.

GGG is well-funded with access to a $20 million facility with Hong Kong-based Long State Investments and $5.57 million in cash and deposits at call as at 31st December 2014.

Feasibility Program

Through 2014, and into 2015, GMEL has been focused on completing the feasibility study, and environmental and social impact assessments (EIA and SIA) on the Kvanefjeld Project.

These studies collectively form the material required for the permitting process.

The feasibility study follows on from the prefeasibility study on Kvanefjeld, released in 2012, and the ‘Mine and Concentrator’ study (a feasibility-level study on the mine and beneficiation circuit) that was released in 2013.

The primary development strategy for Kvanefjeld was finalised in 2014 following extensive stakeholder engagement in Greenland.

This involves an operation to mine and process 3 million tonnes of ore per year.

It will have a concentrator (flotation) circuit that will produce a rare earth and uranium rich mineral concentrate, a zinc concentrate, with fluorspar also produced in this stage.

A refinery facility will also be established in Greenland to produce a critical rare earth concentrate (neodymium, praseodymium, europium, dysprosium, terbium, yttrium), uranium oxide, and lanthanum and cerium by-products.

Resources and Reserves

GGG recently updated resources for Kvanefjeld, outlining 143 million tonnes of resources in the ‘measured category’ in compliance with the JORC 2012 code.

Following the finalisation of the feasibility study, an initial mine reserve will be defined, which represents a major project milestone.

The measured resources form the uppermost, high-grade and accessible portions of the Kvanefjeld deposit.

Regulatory Status

GGG is advancing discussions with the Greenland government to firm up the permitting timeline for the Kvanefjeld Project.

With the priority development strategy for Kvanefjeld set, and as a precursor to finalising technical studies for permitting, a public pre-hearing process was conducted in Greenland in late-2014.

Responses to questions generated through the pre-hearing have been finalised by GMEL and handed over to Greenland’s Minerals Licensing and Safety Authority (MLSA).

The government, elected late in 2014, is focussed on providing a stable environment for foreign investment, developing priority mining projects, and is of a pro-uranium position.

Regulatory matters associated with uranium are being addressed by both Greenland and Denmark, with substantial advances made through 2014, and continuing in 2015.

The company will be conducting meetings with representatives of the Greenland government in the coming weeks, and will look to update on regulatory matters accordingly.

The EURARE Program — Upcoming Pilot Plant Operations

In 2015, with the feasibility study and impact assessments in the drafting phase, technical work programs comprise pilot plant operations of both the beneficiation and hydro-metallurgy (refinery) circuits, which are planned for April and August respectfully.

Bulk ore material was shipped from Greenland to Finland in 2014 where the first of the two pilot plant operations will take place. These operations are being conducted under the EURARE program, which is funded by the European Union.

The pilot plant operations are independent of the feasibility study, but will provide further data to increase the technical rigour underlying the Kvanefjeld project, and assist in moving toward bankable status.

To have these large-scale programs funded through the EURARE program is of immense benefit to the company.

Cooperation with NFC

GGG continues to advance cooperation with NFC’s Foreign Engineering and Construction Co. Ltd.

NFC’s rare earth division is a long-standing and highly-reputed operator in rare earth production having pioneered rare earth separation technology, and is looking to expand its participation in the rare earth industry significantly.

In addition, NFC is a highly-reputed EPC contractor with extensive global experience.

Following the signing of a Memorandum of Understanding in March 2014, both parties have conducted senior management meetings in Greenland, Perth and Beijing, with regular technical meetings as the feasibility study is finalised.

This phase has aimed to develop a thorough technical understanding of the Kvanefjeld project, learn about Greenland, and to jointly establish a rigorous understanding of the project cost structure.

Greenland Minerals and Energy is on track to achieve significant milestones in 2015. It is well funded with a $20 million facility on standby as it looks to execute on its business plan this year.

This includes release of the much anticipated upcoming Feasibility Study as well as the EIA and SIA, which comprise documentation for project permitting.

Adding to the work are major technical programs that will be funded through the EURARE program.

In addition, with uranium prices rising since the latter half of 2014, with many analysts outlining a positive outlook, this year looks to be pivotal for GGG.

Importantly, rare earth prices are also rising with an increasingly clear outlook as the Chinese rare earth industry consolidation program progresses in earnest.

This is expected to result in improvements to both market conditions and sector sentiment.

Therefore, share price kickers include:

- Release of the Feasibility Study;

- Regulatory permitting timelines;

- Defining an initial mine reserve; and

- The EURARE pilot plant operations.

Proactive sees 2015 as a year that is likely to see significant headway made by GGG at Kvanefjeld, already one of the most advanced emerging rare earth and uranium projects globally.

As GGG executes on project timelines in 2015, we would expect to see additional investment by pension, sovereign and private equity funds as they look to weight in the stock — given its scale and dimensions.

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