Defense Metals reports positive PEA results for its Wicheeda rare earths project in British Columbia
(Kitco News) - Today, Defense Metals (TSX-V:DEFN) announced positive results of its Preliminary Economic Assessment (PEA) and updated mineral resource estimate for the development of its Wicheeda rare earth element (REE) deposit located in British Columbia, Canada.
The company said that PEA delivers strong financial metrics, including the after-tax NPV of $512 million at 8% discount rate, as well as the after-tax IRR is 16%; the capital payback is 5 years from start of production, and assumes partial self-funding of construction of hydrometallurgical plant from concentrate sales.
The project's revenues average $397 million per year from sale of REE mineral concentrate (years 2-4) and mixed REE hydrometallurgical precipitate (years 5-16). Operating margin is 65.2%.
According to a press-release, the study contemplates a 1.8 Mtpa mill throughput open pit mining operation with 1.75:1 (waste:mill feed) strip ratio over a 19 year mine life that includes 3 years of construction, and early revenue generation via phased open pit development. Average annual REO production is 25,423 tonnes.
Importantly, the company said that updated Wicheeda mineral resource estimate comprises a 5.0 million tonne indicated mineral resource, averaging 2.95% TREO and a 29.5 million tonne inferred mineral resource, averaging 1.83% TREO, reported at a cut-off grade of 0.5% TREO. The current resource represents a 36% increase on a contained metal basis in comparison to the prior 2020 MRE.
CEO Craig Taylor stated, "We are pleased to have delivered a positive PEA for the Wicheeda REE Project that has the potential to be one of the top REE projects in the world. The results of the PEA reveal the Wicheeda Project demonstrates robust economics and relatively low initial CAPEX via a staged development scenario that provides the flexibility to capitalize on forecast REE demand pressure."
Defense Metals is a mineral exploration company focused on the acquisition of mineral deposits containing metals and elements commonly used in the electric power market, defense industry, national security sector and in the production of green energy technologies, such as, rare earths magnets used in wind turbines and in permanent magnet motors for electric vehicles. Defense Metals has an option to acquire 100% of the Wicheeda rare earth element property located near Prince George, British Columbia, Canada.