Australian rare earths metals and mining pioneer operational in Greenland since 2007, Greenland Minerals Limited (ASX: GGG), is best known for its 100 per cent owned Kvanefjeld Rare Earth Project, enabling the company to be well-positioned to be a future cornerstone to global rare earth supply.
As per the company, Rare earth products are expected to produce over 80 per cent of the project's revenue, with fluorspar, zinc and uranium by-products contributing the rest.
In this article, we would discuss the major developments of the Kvanefjeld Rare Earth Project that unfolded in the recent months, and decode the growth route of the Project, which when developed is likely to be:
- long term supplier of products;
- unfolding the revolution in the efficient use of energy.
Let’s dive right in!
Major Kvanefjeld Developments of 2019
Success of the Technical Optimisation Test
Enhancing the same, in the beginning of 2019, the company pleasingly notified about the completion of the test work to conclude and further de?risk the project’s optimised flotation circuit.
This test work was undertaken by China’s BTMR Laboratories, which developed and tested new simpler project configurations, stating that the optimised grade?recovery produces over 22 per cent REO concentrate grades with recovery in excess of 80 per cent.
Engineering Optimisation Studies’ Progress
Renowned engineering companies- Nuna Logistics, PND Engineers, Tetra Tech and China Communications Construction Co had been dedicated towards the Project’s engineering studies, with the intent to optimise its civil design and construction strategies, which resulted in the following outcomes:
- Civil design and construction were completed: Port Off?shore design by PND Engineers, Port On?shore design by C?CCC First Harbour Consultants, Civil Design by Tetra Tech and Civil Construction by Nuna Logistics;
- Civil construction costs were reduced by 44 per cent (US$138 million), with the revised civil costs estimated to be US$175 million, including indirect costs and contingency.
- Capital and operating cost reductions;
- It should be noted here that in the project’s rare earth refinery circuit, as per GGG’s half-yearly report for the period ending June 30 2019, there was a 40 per cent reduction in the annual operating costs, where unit costs reduced to less than US$4/kg of rare earth oxide, net of by-product credits.
- The capital cost was reduced by 40 per cent to US$505 million.
- The updated capital cost estimate (US$505 million) is regarded transformational for the Project, as it has the lowest capital intensity of budding ASX-listed rare earth projects.
Improvement in Rare Earth Recoveries
Acknowledging the developments at the Project would be incomplete without understanding the increase in projected output of commercially important rare earths and the average annual by-product output:
MoU Pertaining to the Impact Benefit Agreement
GGG signed an MoU with Kommune Kujalleq and Kujalleq Business Council (a municipal authority and local organisation, respectively) wherein the three parties agreed to a Participation Agreement to support and supplement the IBA (Impact Benefit Agreement), which would be part of a mining licence application for the Project.
The intent of the Agreement was to enhance community capacity development, needs identification and skills development for the local workforce and businesses along with sharing knowledge about local culture and land-use practices.
Social Impact Assessment Completion and Related Documents
A very significant milestone in Greenland’s mining license application process was marked by Greenland’s Ministry of Industry and Energy accepting the Social Impact Assessment for the Project, which was prepared by Australian consultant Shared Resources Pty Ltd.
Subsequently, Environmental Impact Assessment and navigational safety investigation study for the Project, along with the Social Impact Assessment have been submitted to Government of Greenland as a part of the mining lease application.
The company is eyeing the next step of the permitting process - a period of public consultation in respect to the Application, which is open to stakeholder feedback, before the company representatives travel to Greenland to discuss the outlook and next steps in the licensing process.
With the noticeable and rapid developments at Greenland Minerals’ Kvanefjeld Project, the improved metallurgical performance and increased recoveries, it is safe to say that the Project is well-positioned with the lowest projected unit costs of rare earth production.
Involvement and acceptance of the local community and authorities is a huge bonus, which is keeping the industry experts optimistic and eager to seek further developments at the Project.
Stock Price Information
By the close of the trade session on the ASX on 11 October 2019, the GGG stock was trading at $0.120, with a market cap of $149.92 million and approximately 1.19 billion shares outstanding. In the last six months, the stock has delivered a return of 81.82 per cent with a YTD return of 76.47 per cent.
To get an insight into GGG’s recent half-yearly report for the year ended 30 June 2019, we encourage you to READ HERE.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is sponsored but NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. We are neither licensed nor qualified to provide investment advice through this platform.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.