Rare earths, that make the world’s strongest permanent magnets, are central to clean energy manufacture and drive the growth of several emerging clean technologies contributing to reducing greenhouse gas emissions and dependence on fossil fuels. They are a cornerstone of global government macro-initiatives and have a strong macro outlook.
Greenland Minerals Limited (ASX: GGG) is an emerging Australian company tapping the huge rare earths opportunity and operational in Greenland since 2007, with the current focus on the development of the Kvanefjeld rare earth project in south west Greenland.
The Project is believed to be a potential foundation to the global rare earth supply, and post its development, is likely to be a low-cost and huge-scale supplier - expanding the revolution in the effective use of energy.
The Kvanefjeld rare earth project
The Project, with the potential to become the most significant western world producer of rare earths, is centred on the globally unique Ilimaussaq Alkaline Complex and has several unique attributes:
- Massive bulk resources, mostly outcropping;
- Location, <10km from tidewater, with year-round direct shipping access, and
- The ores are conducive to simple, cost-competitive processing.
Through 2017 and 2018, GGG was conducting optimisation of the Project with a focus on metallurgical performance and civil design and engineering. A multidisciplinary team of specialist engineering firms including Nuna Logistics, Tetra Tech, PND Engineers and China Communications Construction Co, contributed to an updated civil design with construction costs reduced substantially.
The outcomes of the feasibility study were finalised during Q2, 2019:
- Capital cost reduced by 40% to US$505 million;
- Operating costs reduced by 40%, resulting in unit costs of <US$4/kg of REO;
- Project has a smaller footprint and lower impacts, while producing more rare earths;
- Reduced reagent consumption, and reduced power requirements.
Furthermore, GGG filed an application for an exploitation license for the Kvanefjeld Project to the Government of Greenland. A navigational safety investigation study along with an environmental impact assessment and a social impact assessment for the Project were included with the application.
Recently, on 22 October 2019, GGG intimated that the environmental impact assessment review was completed by Greenland’s Environmental Agency for Mineral Resource Activities (EAMRA) and their advisors, the Danish Centre for the Environment (DCE). Further meetings are planned with EAMRA and the DCE in order to finalise the EIA in a timely manner, as GGG intends to pace up public consultation.
Adhering to a vital element of GGG’s Community Support, the Company had entered into a MoU for a Participation Agreement with Kommune Kujalleq and Kujalleq Business Council. This complements the Impact Benefit Agreement (IBA), which will be part of a lucrative mining licence application for the Project.
In the Agreement, the three parties have considered community capacity development in terms of needs identification and skills development for the local workforce and businesses, besides sharing knowledge about local culture and land use practices with the projected influx of Project workers.
Technical Needle on GGG
GGG Weekly Chart (Source: Thomson Reuters)
On the weekly chart, the stock gave a breakout from the downtrend with a sudden spike in the volume. Post the trend breakout, the stock rose to the level of approx. $0.165 and retraced back to the current level of $0.097.
The stock has now retraced 61.8 per cent of the up rally observed from the level of approx. $0.048 to the level of $0.165, and the consolidation at the level of 61.8 per cent with higher volume could indicate buyers’ interest.
GGG Daily Chart (Source: Thomson Reuters) (Ichimoku Studies)
On further applying the Ichimoku on the weekly chart, we can observe that the stock is currently trading below the Span A of the Ichimoku, which is currently marked at $0.119 and is the mean of the conversion line (navy blue) and the base line (light blue).
The spread between Span A and Span B is narrowing down slightly, which in turn, suggests that the corrective phase post the breakout is nearing end. The grey-shaded area in the chart could act as the immediate support if the correction resumes to retest the breakout levels.
The conversion and the base line have given a positive crossover previously; and with the RSI approaching the oversold zones, the stock price could enter a consolidation phase.
GGG last traded at $0.097, down by 2.02% as on 25 October 2019. In the past six months, the stock has provided a return of 37.50%.
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