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Greenland Minerals And Energy Finalising Kvanefjeld Environmental Study

Jul. 27, 2015 8:44 PM ET
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Greenland Minerals and Energy (ASX:GGG) is focused on finalising the Environmental and Social Impact Assessments (ESIA) for its Kvanefjeld Project in Greenland through the third quarter of 2015.

Kvanefjeld is one of the most advanced, undeveloped rare earth and uranium projects globally.

Along with the Feasibility Study, the ESIA is a key input for the exploitation (mining) licence application.

In the last quarter, the Feasibility Study confirmed the project to be a highly profitable, low-cost diversified producer of rare earth products, uranium, zinc and fluorspar.

A maiden Ore Reserve of 108 8 million tonnes, sufficient to underpin an initial 37 year mine-life, has been established.

The company has successfully completed a large-scale beneficiation pilot plant operation in Finland in association with the EURARE program that processed 26 tonnes of ore to generate 2 tonnes of mineral concentrate.

This concentrate will be used in the pilot plant operation of the refinery circuit, which is scheduled to take place in September 2015.

Dr John Mair, managing director, told Proactive Investors:

"Finalising all the documentation for a mining license application and commencing the permitting process is really one of the major project milestones.

"Permitting is such an important aspect of developing a project, and is really a culmination point of extensive technical studies, environmental work, and years of stakeholder engagement.

"We're now close to reaching this point which is really exciting, and serves to further strengthen and de-risk the Kvanefjeld Project.

"We will look to update on the status of the impact assessments within the next couple of weeks, as we work through final stages."

Kvanefjeld Feasibility Study

Kvanefjeld is one of the very few projects in the rare earth or uranium sectors that is now underpinned by a comprehensive feasibility study, with an Ore Reserve estimate to sustain an initial 37 years of mine operation.

The Feasibility Study proposes a development strategy to see 3 million tonnes per annum mined to produce 250,000 tonnes of rare earth and uranium rich mineral concentrate, and 15,000 tonnes of zinc concentrate (sphalerite).

The rare earth and uranium rich mineral concentrate is then refined to produce:

- 7,900 tonnes of high-purity critical mixed rare earth concentrate (neodymium, praseodymium, europium, terbium, dysprosium, yttrium);
- 512 tonnes of uranium oxide
- Lanthanum and cerium by-products
- Fluorspar is recovered from the flotation circuit

The production of the above products will take place in Greenland. The key strengths of the project include:

- A world-class multi-element resource base that remains open to expansion, allowing for further development opportunities;
- A simple process flow sheet that has been rigorously developed, which concentrates the key value minerals into a low-mass, high grade mineral concentrate for efficient refining;
- Unlike many projects in the rare earth sector (developed or emerging), the mineral concentrate can be treated by a simple atmospheric acid leach circuit, without complex and costly mineral cracking, presenting significant cost benefits with reduced technical risk;
- By-product credits reduce the costs of rare earth production significantly;
- Incremental cost of recovering uranium is low at less than $5.80/lb U3O8;
- Ability to land lanthanum and cerium products in Europe for - Long term price forecast for the critical mixed rare earth concentrate of $78.6/kg, which provides a high margin to the net unit operating cost of US$8.56/kg critical rare earth oxide (net of by-product credits).

Maiden Ore Reserve Estimate

Following the release of the Feasibility Study, GMEL released a maiden Ore Reserve Estimate for the Kvanefjeld Project of 108Mt at 362ppm U3O8, 2,600ppm zinc and 14,300ppm total rare earth oxides.

The Ore Reserves are situated in the upper part of the Kvanefjeld Deposit, the largest of three defined mineral resources within the broader project area.

At the projected production rate of 3 million tonnes per annum, the initial reserves are sufficient to sustain 37 years of operation, inclusive of ramp-up.

The resource base of greater than 1 billion tonnes will allow for both capacity expansions, and mine-life extensions.

Regulatory Matters

A series of conventions that deal with safety and protection in relation to radioactive materials are now in public hearing in Greenland, with the hearing period closing in early August.

The necessary conventions have been identified through work conducted by Greenland and Denmark on regulations pertaining to the mining and handling of radioactive materials.

While Denmark is a signatory to all the conventions in the current public hearing, Greenland's status requires independent ratification, following public hearing.

Pilot Plant Operation - Concentrator Circuit

During Q2, GGG conducted a successful pilot plant operation of the concentrator (beneficiation) circuit.

The pilot plant operation was conducted through the EURARE program, at the laboratories of GTK Finland.

Froth flotation was used to produce a 2 tonnes of mineral concentrate rich in rare earth elements and uranium, and a zinc concentrate.

Notably, the plant operated at feasibility design criteria following ramp-up.

The next test work stage will produce high-purity rare earth concentrates that will benefit the EURARE program by providing feed for the subsequent rare earth separation work.

This was the third pilot plant operation of the concentrator circuit, with each run conducted at an increasing scale.

The beneficiation circuit has been rigorously developed over a number of years.

Extensive test work confirms the ability to cost-effectively concentrate the main rare earth minerals into less than 10% of the original ore mass, using a single, low-risk method in froth flotation.

The second and third (most recent) pilot plants have incorporated Jameson Cell technology, which has over 20 years of commercialisation with more than 300 installations, and is well suited to the Kvanefjeld ore-type.

Analysis

Greenland Minerals and Energy is finalising the key Environmental and Social Impact Assessment for its Kvanefjeld Project through 3Q 2015.

Once completed, the company will proceed with securing the Mining Licence, one of the major project milestones.

It has also identified some areas of the project that it is looking to optimise.

This includes some obvious cost savings that will improve the economic metrics of the project.

GGG is well funded with $3.4 million in cash as at 30th June 2015.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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