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Vital Metals logs rare earths first

Explorer drills in 2021 for larger prize in nearby Tardiff deposit Mining Explorers 2021 - January 27, 2022

When Vital Metals Ltd. purchased the rights to mine the mineral resources in the upper zones of the Nechalacho rare earth project from Avalon Rare Metals Inc. in 2019, the Australian junior hit the ground running. And the rest is history. Literally.

In July, Vital Metals became the first company to produce rare earth minerals in Canada – a country known to host vast undeveloped quantities of this suite of coveted elements. Vital is also only the second company to mine rare earth elements in North America.

The Nechalacho project at Thor Lake, Northwest Territories, hosts a rich polymetallic rare metals resource, with potential for economic recovery of lithium, zirconium, beryllium, niobium, and tantalum as well as REEs.

First staked in 1971, Nechalacho currently hosts a world-class resource of 94.7 million metric tons at 1.46% total rare earth oxides. The project's North T Zone hosts a high-grade resource of 101,000 metric tons at 9.01% light rare earth oxides (2.2% neodymium and praseodymium), making it one of the highest-grade rare earth deposits in the world.

Avalon Advanced Materials Inc. initially focused exploration at Nechalacho on the heavy REE-rich Basal Zone deposit, which was the subject of a positive 2013 feasibility study. Avalon and predecessor companies invested more than C$120 million in exploration of the property.

It is the high-grade, near-surface light rare earth (bastnaesite) resource enriched with the key magnet minerals, neodymium and praseodymium, that drew the eye of Australian miner Vital Metals because of its potential for near-term, small-scale development.

Vital acquires project

In June 2019, Avalon and a Vital subsidiary, Cheetah Resources Pty Ltd., signed an agreement under which Cheetah purchased majority ownership in the near-surface T-Zone and Tardiff Zone resources at Nechalacho for C$5 million. Avalon retained ownership of the property's mineral resources below a depth of 150 meters above sea level (including the Basal Zone deposit) and will continue to have and mining purposes. Avalon also continues to assist Vital, where needed, in executing its planned work programs, and it also retains a 3% net smelter royalty in Vital's project.

Simple mining commences

Today, Vital says its goal is to become the largest independent supplier of clean mixed rare earth feedstock outside China.

Cheetah began mining ore from the North T zone starter pit at Nechalacho in July, extracting some 28,000 metric tons of ore at the project during the season.

The Vital subsidiary used a TOMRA x-ray transmission sorter to upgrade the ore mined at North T to a concentrate expected to contain greater than 30% rare earth oxides.

Without the need for a complex processing facility or tailings storage, workers at Nechalacho simply crushed and sorted near-surface rock in a setting similar to a gravel quarry, identifying the best material with little or no water and zero chemicals.

The startup of the mining operation coincided with strong price gains for the neodymium and praseodymium found in the T zone. This reflects strengthening demand, especially among manufacturers of electric vehicles.

Thor Lake, located 100 kilometers (62 miles) southeast of Yellowknife, has good access to markets through its proximity to Great Slave Lake, providing access by barge in the summer and ice roads in the winter. Hay River is a nearby port with an existing barging terminal, railhead, and is accessible year-round by an all-season highway.

Vital reported in late October that preparations to ship some 500 one-metric-ton bags of ore from Nechalacho to Saskatoon, Saskatchewan, where the company is building a 1,000 metric-ton-per-year rare earths extraction plant.

"Construction of our custom-built facility is underway at the same time as the SRC Rare Earth Processing Facility being built by Saskatchewan Research Council, and it's exciting to see this 'rare earths' hub start to take shape in Saskatoon," Atkins said in October. "Our first shipment of ore is due to leave Nechalacho this month, and we expect to start feeding into the plant before the end of calendar year 2021, with commissioning to follow."

Plant can expand

Vital procured equipment for its extraction plant based on a startup production capacity of 1,000 t/yr. (excluding cerium), or the equivalent of 470 t/yr. of neodymium and praseodymium, but also with the capacity to scale up in a stage 2 expansion to 2,000 t/yr. (excluding cerium), or the equivalent of 940 t/yr. of neodymium and praseodymium.

This represents a 50% larger plant throughput than initially planned, which gives Vital the option to double its production in the future.

The company also signed an agreement to assist the SRC with technical support for its REE processing facility, which is adjacent to Vital's extraction plant.

Vital said its first ore shipment should supply the first nine months commissioning of the REE extraction plant, with further deliveries to be scheduled as required.

With the first feed at the Saskatoon Extraction Plant set for December, Vital expects commissioning activities to continue through the first half of 2022.

Offtake pacts signal interest

Vital intends to produce a minimum of 5,000 metric tons of contained REO at the project by 2025 and has signed offtake agreements with Norway-based REEtec for Stage 1 production with a supply of 1,000t REO (ex-Cerium) per year.

Under an amended agreement signed in early October, Vital will sell a rare earth carbonate product containing at least 750 metric tons of praseodymium and neodymium within 2,000 metric tons per year to REEtec for an initial five-year period.

This is a 50% increase over the commitment of midstream rare earths products containing 470 metric tons of praseodymium and neodymium stipulated in an earlier pact between the companies.

Vital also signed a non-binding memorandum of understanding in late October with Ucore Rare Metals Inc. for a supply of a mixed rare earth carbonate, beginning in the first half of 2024.

Ucore's Alaska Strategic Metals Complex facility is scheduled for commissioning in the first half of 2024, with an initial 2,000 short t/yr. TREO separation and purification capacity, ramping up to at least 5,000 t/yr. TREO by 2026.

Geoff Atkins, Vital Metals' managing director, said the MOU will position Vital as a key supplier of rare earths in the North American market, building on its offtake agreement with REEtec in Europe.

"We are continuing to grow our operations in Canada and are well-placed to supply both geographies (North America and Europe) with the complete suite of rare earths," he said.

Toward that end, Vital recently agreed to purchase 68% and 100% interest in Quebec Precious Metals Corp.'s Kipawa and Zeus heavy rare earth projects in Quebec, respectively, for C$8 million, to be paid in increments over five years

"The acquisition of the projects provides Vital with a unique opportunity to become a producer of both heavy and light rare earths," Atkins said. "The introduction of heavy rare earths into our product suite will increase the value of the rest of our offering as we will be a single supply source for both heavy and light rare earths."

2021 exploration success

In February 2021, Vital began exploration with plans to drill test three high-grade targets in the Tardiff deposit, zones 1, 2, and 3, and to evaluate potential expansion of the T Zone by targeting two additional zones, the South T and S zones, which lie adjacent to the North T pit, where the mining took place in 2021.

Vital said the drill program will assist in developing a mine plan for a stage 2 operation, drawing on ore from the much larger Tardiff deposit and defining additional resources in the vicinity of the pit where mining began in July.

The 30 holes drilled last year were driven to a depth of 72 meters. The explorer drilled holes in Tardiff zones 1 and 3 on 25-meter-by-25-meter spacing to upgrade resource confidence levels for mining and processing studies.

Holes across Tardiff zones 2 and 3 will also help define the company's stage 2 mine plan. The drill program is part of Vital's plan to transform Nechalacho into a larger-scale, longer-life rare earths project.

All the holes intersected thick intervals of total rare earth oxides, grading more than 2% TREO. The best results from the five holes drilled in Zone 2 include 25.1 meters averaging 3.03% TREO and 19 meters at 2.05% TREO.

These intersections occurred in the westernmost drill holes, indicating high-grade TREO is open in that direction, according to Vital. The high-grade TREO intercepts are also outside the Upper Zone mineral resource, indicating potential for an additional high-grade TREO resource in the Tardiff area.

Five holes drilled at Zone 3 hit shallow, high-grade REO intersections. The best results from Zone 3 include 51 meters at 2.13% TREO; and 36.7 meters at 1.96% TREO. All five holes also confirmed the high grades previously encountered.

With high-grade mineralization remaining open at all zones in all directions, Vital said it will undertake additional drilling to find the boundaries of the three Tardiff zones and identify the relationships between the zones.

Further drilling in these areas in 2022 will provide a better understanding of the mineralization and determine if the three zones are connected, the company added.


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