WICHEEDA PROPERTY

100% OWNED
KEY HIGHLIGHTS

PEA Highlights 

Strong Financial Metrics

  • Strong Financial Metrics​

  • The project has a pre-tax net present value (NPV) of $761 million, and after-tax NPV of $517 million, at 8% discount rate.

  • The pre-tax internal rate of return (IRR) is 22%, and the after-tax IRR is 18%.

  • Capital payback could occur within 5 years from start of production, assuming partial self-funding of hydrometallurgical-plant construction from rare-earth concentrate sales.

  • Revenues could average $381 million per year from sales of rare-earth mineral concentrates (years 1-4) and mixed rare-earth hydrometallurgical precipitate (years 5-16).

  • Operating margin is expected to be 60%.

  • Production of a high-grade flotation-concentrate, with an average grade of 43% total rare-earth oxide (TREO), is planned for sale directly to the market directly for the first four years and then for feed to a project hydrometallurgical plant.

  • Project is near to key infrastructure.

  • Base-case economics were calculated using rare-earth-oxide (REO) prices of US$5.76/kg TREO for flotation concentrate and US$14.04/kg TREO for mixed REE carbonate precipitates. 

Significant Production Potential

  • The study contemplates a 1.8 Mtpa (million tonnes per year) mill throughput, open-pit mining operation with 1.75:1 (waste:mill feed) strip ratio over a 19 year project life, which includes 3 years of construction, and early revenue generation via phased open-pit development. Phase 1 initial-pit strip ratio of 0.63:1 (waste: mill feed) yields rapid access to higher-grade surface mineralization. Pre-production and first mill feed both occur in year 1.

  • Average annual REO production is planned to be 25,423 tonnes.

  • Operating costs average $148 million per year over a 16-year life of mine (LOM). 

Development Capital

  • Initial capital expenditures (CAPEX) are calculated at $440 million (includes a contingency allowance of 20% to 25% for major items), and the expansion capex under a cash-funded scenario is $390 million. Sustaining expenditures for the life of the project are $409 million.

  • A scenario that uses concentrate sales to partially self fund the construction of a hydrometallurgical plant reduces overall project cash requirements, compared to constructing the hydrometallurgical plant as part of Phase 1. This development scenario provides significant optionality to accelerate or defer the investment in the hydrometallurgical plant according to market conditions

 

  • A scenario that uses concentrate sales to partially self fund the construction of a hydrometallurgical plant reduces overall project cash requirements, compared to constructing the hydrometallurgical plant as part of Phase 1. This development scenario provides significant optionality to accelerate or defer the investment in the hydrometallurgical plant according to market conditions.

     Independent Preliminary Economic Assessment for the Wicheeda Rare Earth Element Project, British Columbia,
Canada, dated January 6, 2022, with an effective date of November 7, 2021, and prepared by SRK Consulting (Canada)
Inc. is filed under Defense Metals Corp.’s Issuer Profile on SEDAR (www.sedar.com)

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Mineral Resource Estimate

  • The updated Wicheeda Mineral Resource Estimate (MRE) 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 within a conceptual Lerchs-Grossman (LG) pit shell. The current resource represents a 36% increase in contained metal, when compared to the prior 2020 MRE, which is due to the estimation of additional economically significant medium and heavy REE’s and to a lower cut-off grade (based on consideration of concentrate TREO payables, metallurgical recovery, and operating-cost assumptions).

Notes for Resource Table:

  • The MRE was prepared by Warren Black, M.Sc., P.Geo. of APEX Geoscience Ltd under the supervision of the QP, André M. Deiss, Bsc (Hons), Pri.Sci.Nat. of SRK Consulting (Canada) Inc., in accordance with CIM Definition Standards.

  • The MRE is classified according to the CIM "Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines" dated November 29th, 2019, and CIM "Definition Standards for Mineral Resources and Mineral Reserves" dated May 10th, 2014.

  • Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no guarantee that any part of the mineral resources discussed herein will be converted to a mineral reserve in the future.

  • All figures are rounded to reflect the relative accuracy of the estimates. Total may not sum due to rounding. 

  • Mean rock densities supported by 795 measurements applied: 2.94 g/cm3 (dolomite-carbonatite), 2.87 g/cm3 (xenolithic-carbonatite), 2.70 g/cm3 (syenite), and 2.74 g/cm3 (limestone).

  • The reasonable prospect for eventual economic extraction is met by reporting the Mineral Resources at a cut-off grade of 0.50% TREO (total rare earth oxide, sum of 10 oxides: CeO2, La2O3, Nd2O3, Pr6O11, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3 and Ho2O3), contained within a Lerchs-Grossman (LG) optimized pit shell

  • The cut-off grade is calculated, and the LG pit is optimized based on the assumption that the hydrometallurgical processes can produce mixed REE carbonate precipitates. The parameters utilized include the following considerations: 

    • TREO price: $18.66/kg

    • Exchange rate of 1.30 C$:US$

    • Precipitate production grades of 81.09% of TREO 

    • Processing cost includes $21.47/t of mill feed for flotation plus a variable cost for hydrometallurgical plant that varies based on the feed grade. The average cost of hydrometallurgical plant is assumed to be $1,204/t of concentrate.  

    • Mining cost of C$2.00/t for mill feed and waste

    • G&A Costs included in the processing cost is C$6M/yr.

    • The overall process recoveries: For TREO>=2.3%, recovery is 69.6%; between 2.3% and 1.5% TREO, recovery is 65.3%; and less than 1.5% TREO, recovery is 52.2%. These assume variable flotation recoveries and a constant 87% hydrometallurgical recovery.

    • Overall pit slope angles vary by zone between 40 and 48 degrees 

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Exploration Upside

  • During 2021, in anticipation of a positive PEA outcome, Defense Metals completed a 29-hole 5,349-metre resource-expansion diamond-drill program at Wicheeda. The results of drilling released after the completion of the PEA. The drilling is expected to support ongoing advanced economic studies through the development of an updated geological model and mineral-resource estimate.

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SIGNIFICANT ASSAY RESULTS (2021)

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View full PEA news release (dated November 24, 2021 as amended January 6, 2022) by clicking here

The 100% owned Wicheeda Property consists of 9 mineral claims covering an area of 4,244 hectares, located approximately 80 km northeast of the city of Prince George, British Columbia.

Favorable mineralogy and lanthanide distribution make Wicheeda a very attractive light-rare-earth (LREE) deposit.

The rare-earth mineral monazite and a group of rare-earth carbonates (bastnaesite-parisite-synchysite) occur in approximately equal proportions. Mineral grains are coarse and well crystalized, which facilitates metallurgical separation and concentration.

Ideal opportunity for vertical integration, to support rapidly growing market, reducing reliance on China.

PROPERTY GEOLOGY

 

REE-enriched carbonatites of the Wicheeda Deposit are part of an elongate, northwest trending intrusive carbonatite-syenite sill complex. The carbonatite is intruded into syenite, mafic dikes, limestone, and calcareous sedimentary wall rocks. The Wicheeda REE Deposit has dimensions of approximately 400 m north-south by 100-250 m east-west.

Diamond drilling data supports the interpretation of a moderately north-northeast dipping, shallowly north plunging, layered sill complex having syenite at its base. It is overlain by hybrid matrix to clast-supported limestone or mafic intrusive xenolithic carbonatite (fenite), as well as significantly REE-bearing dolomite-carbonatite rocks, which form the main body of the Wicheeda REE Deposit outcropping at surface. This layered sill complex occurs within an unmineralized limestone waste rock.

PROPERTY LOCATION

Strategically positioned along a major forestry service road, which connects to BC Highway 97

A major hydroelectric power line, a major gas pipeline, and a Canadian National Railway line are available nearby

Prince George, British Columbia, a mining centre with a skilled workforce, is 80km to the southeast.

​Port of Prince Rupert is 500km to the west and accessible by rail and road

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Wicheeda Deposit Looking Northwest Showing Resource Block Model and Pit Shells
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WICHEEDA PLAN DEPOSIT VIEW
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