AIDEA affirms interest in funding Bokan
Potential Pentagon investments bolster value of REE project
Last updated 2/14/2020 at 4:57am
Ucore Rare Metals Inc. Feb. 10 announced that the Alaska Industrial Development and Export Authority (AIDEA) has reaffirmed its interest in funding the Alaska Strategic Metals Complex, a rare earth element separation facility that Ucore Rare Metals is planning to develop near Ketchikan, Alaska, and an eventual mine at the nearby Bokan Mountain REE project.
Created by the Alaska Legislature in 1967, AIDEA is the development finance arm of the state of Alaska. This authority established to advance economic growth in Alaska has financed hundreds of projects around the state from smaller businesses to larger infrastructure development projects. One of the largest and most financially successful projects in AIDEA's portfolio is the Delong Mountain Transportation System, a road and port project that connects the Red Dog zinc mine in Northwest Alaska to world markets.
More information on AIDEA and its investments in mineral related projects in Alaska can be found at A great Alaska AIDEA published in the November 2018 edition of North of 60 Mining News.
In 2014, the Alaska Legislature authorized AIDEA to invest up to US$145 million to help finance development of a mine at Ucore's Bokan Mountain rare earth deposit on Prince of Wales Island, which is located about 30 miles southwest of Ketchikan, which includes the Alaska Strategic Metals Complex.
During 2019, AIDEA reviewed Ucore's plans to develop the Alaska SMC and mine at Bokan Mountain. As a result of this evaluation, Alaska's powerful development finance arm continues to see the projects as a good investment.
One of the reasons for AIDEA's continued interest is the potential that its investments in Alaska SMC and Bokan could be leveraged by federal support for the project.
"According to media reports, the U.S. Army recently sent out memos to a select group of companies that are advancing potential U.S.-based rare earth processing plants requesting information on the costs to develop separation facilities that can produce heavy rare earths. The Army is considering funding up to two-thirds of the costs required to establish at least one domestic facility which can separate these heavy rare earths into the individual metals needed for military hardware," AIDEA CEO and Executive Director Thomas Boutin penned in a December letter to Ucore President and CEO Jim McKenzie.
Additional information on the Army's plans to invest in the processing facilities needed to ensure a reliable supply of rare earths can be read at Army probes rare earth facility funding in the Dec. 13 edition of North of 60 Mining News.
In addition to the US$145 million in bonds that have already been authorized, AIDEA has the ability to issue Ucore conduit bonds to potentially support financing the construction of a processing plant. The infrastructure development authority issues these bonds based on the revenue produced by a financed project. AIDEA has issued conduit bonds for a variety of projects and can issue this type of bond based on the approval of its board.
"We would be glad to provide the U.S. Army with any additional information it may need about AIDEA finance programs which could apply to Ucore," Boutin wrote in the letter to Ucore.
Ucore said the prospective financing from AIDEA is an integral component of its planned objective of developing Alaska SMC, which may get started with rare earth feedstocks from other projects within the U.S. or allied countries; and then eventually from concentrates produced at a mine developed at Bokan Mountain.
Further details of Ucore's plan for the Alaska SMC and Bokan Mountain can be read at Ucore lays out Bokan REE mine strategy in the Oct. 25 edition of North of 60 Mining News.
"Ucore is grateful to AIDEA for its continued support of our efforts toward project development in Southeast Alaska," said McKenzie. "The $145 million AIDEA bonds authorization by the Alaska Legislature for the Bokan rare earth project, and the recent notification regarding potential AIDEA conduit bond financing for the Alaska SMC, uniquely positions Ucore in its pursuit to advance these projects. The current U.S. government initiatives to liberate North America from Chinese dependence on REEs require an element of self-funding that the AIDEA financing may provide or contribute to, and it distinguishes the potential development of Bokan apart from other heavy REE projects."
Towards the goal of developing a feasibility study for Bokan Mountain, Ucore has engaged SGS Canada Inc. to advance the design of the prospective first-stage mineral processing plant at Bokan. This work is expected to optimize the beneficiation processes for the rare earths at Bokan and consider the recovery of other critical metals – niobium, zirconium, beryllium, hafnium, titanium, and vanadium – in the deposit.
Determining which metals will be recovered will help with the design of the Alaska SMC.
"Ucore is embarking on a series of incremental engineering and technical development activities to bolster its knowledge of Bokan and to enhance its capabilities regarding the planned Alaska SMC separation and purification facility," said Ucore Rare Metals COO Mike Schrider. "AIDEA's potential financing assistance will be fundamental as we look to aggregate these various technical initiatives within the eventual feasibility study that is ultimately required for the development of the Bokan mineral resource."