Defense Metals (TSXV: DEFN; OTCQB: DFMTF) has completed phase 1 of its hydrometallurgical testing of rare earth samples from the Wicheeda project near Prince George, B.C. The pilot tests were conducted at SGS Lakefield, in Ontario. The main objective was to test the flowsheet for operability and identify any changes that might be required before a longer test campaign.
Currently, the company has reported that the extraction of praseodymium and neodymium from the acid bake calcine was in excess of 90%. Minor changes will be made to the circuit ahead of phase 2 and an alternative product precipitant will be used.
The Wicheeda property in B.C. has a pre-tax net present value (NPV) of $761 million, at 8% discount rate, and after-tax NPV of $517 million. The pre-tax internal rate of return (IRR) is 22%, and the after-tax IRR is 18%. Capital payback could occur within five years from start of production, assuming partial self-funding of hydrometallurgical plant. Revenues could average $381 million per year from sales of rare earth mineral concentrates and mixed rare earth hydrometallurgical precipitate.
Production of a high-grade flotation concentrate, with an average grade of 43% total rare earth oxide (TREO), is planned for sale directly to the market directly for the first four years and then for feed to a project hydrometallurgical plant.
Base-case economics were calculated using rare-earth-oxide (REO) prices of US$5.76/kg TREO for flotation concentrate and US$14.04/kg TREO for mixed REE carbonate precipitates. A study on Wicheeda contemplates a 1.8 million t/y mill throughput, over a 19 year project life, which includes three years of construction.
The updated Wicheeda resource estimate comprises a 5.0 million indicated tonnes averaging 2.95% TREO and a 29.5 million inferred tonnes averaging 1.83% TREO, reported at a cut-off grade of 0.5% TREO within a conceptual Lerchs-Grossman (LG) pit shell.
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