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Greenland Minerals And Energy's Ore Selected For Demonstration Plant

Greenland Minerals and Energy (ASX:GGG) has been selected by the EURARE program to provide rare earth ore samples from its massive Kvanefjeld rare earth-uranium project in Greenland for large-scale demonstration plant operations.

This highlights the demonstrable quality of the ore that comprises the Kvanefjeld deposit.

GGG is a key participant in the EURARE program, which is designed to support the development of a sustainable exploitation scheme for Europe's rare earth ore deposits, and is funded by the European Union.

EURARE has already collected 30 tonnes of ore from the Kvanefjeld project area and prepared for shipping.

The bulk sample is sourced from extensive ore material that was extracted during historic work programs from an adit, which had been driven for over 800 metres through the middle of the Kvanefjeld resource.

The 30 tonne sample will be sent to Outokumpu in Finland for the mineral processing demonstration plant, where a crushing, grinding and flotation pilot plant will be performed by GTK Finland.

GTK has already performed a number of bench scale flotation tests which show a high upgrade ratio and produced mineral concentrates with grades greater than 15% REO, which mirrors those achieved by GMEL's prior pilot plant operations.

The 30 tonnes of ore is expected to produce around 2 tonnes of mineral concentrate as part of the demonstration plant, with plant activities currently expected to take place in early 2015.

Once the demonstration plant mineral concentrate has been produced, hydrometallurgical refining is needed as the next stage of processing.

The EURARE refinery demonstration plant work is planned to take place in Germany in the second half of 2015 and will produce a mixed rare earth carbonate, which is suitable as a direct feed to a separation plant.

EURARE Demonstration

MEAB have extensive metallurgical laboratories in Aachen, Germany, which will be used for the Separation Plant Demonstration.

This involves a number of stages of solvent extraction to produce light, middle and heavy fractions of rare earths.

From the light fraction, a mixture of praeseodymium and neodymium oxide will be produced in significant testwork quantities.

RWTH Aachen has significant pyrometallurgical and electro-refining expertise and will be utilised to convert the mixed praeseodymium and neodymium oxide in metal.

This is performed by electrowinning the metals from a molten rare earth fluoride salt.

Finally, the metal produced will be evaluated as a feedstock for the production of high strength rare earth magnets.

This demonstration work is fully funded by the European Union through EURARE, and production of final products through a complete European processing chain using European technology will be a milestone achievement for the EURARE program.

Importantly, GMEL's involvement in the EURARE program is independent of the projected timeline for the Kvanefjeld project, and the progression of discussions with strategic development partners.

However, the program of work will serve to consolidate the ongoing technical de-risking of the Kvanefjeld project, and also serves to complement GMEL's rigorous testwork conducted over a multi-year development campaign.

Resource

Kvanefjeld is underpinned by one of the world's largest resources of both rare earth elements and uranium with an overall resource inventory of 956 million tonnes containing 575 million pounds of U3O8, 10.33 million tonnes of total rare earth oxides and 2.25 million tonnes of zinc.

With sentiment for uranium slowly but surely turning around, and rare earth demand forecast to continue to grow, GGG is in prime position to capitalise.

GGG's zinc resource also should not go unnoticed, especially given the recent substantial rise in zinc prices.

Funding

Earlier this month, GGG initiated an $8.87 million rights issue at $0.10 to finalise a mining licence application for Kvanefjeld.

The fully underwritten issue received strong support from institutional and sophisticated investors in Australia and Europe, in addition to Danish pension funds.

Combined with existing cash reserves of $5 million, the rights issue will allow rapid progression of Kvanefjeld.

This progression is to include Environmental and Social Impact Assessments, improving the quality and confidence of mineral resources, and engineering design work and updated cost estimates.

GGG will also continue to progress discussions with key development partners, including tier-one rare earth industry participant China Non-Ferrous Metal Co, with which it has already signed a Memorandum of Understanding.

Analysis

Selection of GGG's rare earth ore from its flagship asset for a major European demonstration plant is a ringing endorsement of the Kvanefjeld project, and is testament to the invaluable industry network that GGG has built.

With ample funding, community and industry support, and a giant rare earth, uranium and zinc deposit in the newly uranium-friendly Greenland, GGG's market cap of $65 million is looking increasingly attractive.

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