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GREENLAND MINERALS LIMITED

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Greenland Minerals and Energy : Key Milestones Approaching in the Kvanefjeld Project Development

07/21/2014 | 10:28pm EDT

ASX: GGG

Company Announcement, July 22nd, 2014

Key Milestones Approaching in the Kvanefjeld Project Development


Greenland Minerals and Energy Limited ("GMEL" or "the Company") is pleased to provide this update on the Kvanefjeld Project development plans, as key milestones approach. Through the last twelve months, the Company has conducted extensive stakeholder engagement in Greenland, in the lead‐up to completing a mining license application. In addition, the Company has continued to advance discussions with a tier‐one rare earth development partner in China Non‐Ferrous Metal Industry's Foreign Engineering and Construction Co. Ltd (NFC) which has also provided positive feedback and technical input toward the development strategy for the Kvanefjeld project. Outlined below is an update on the status of the Kvanefjeld project, and the development strategy which underpins the upcoming permitting process, and commercial discussions with development partners.

Mineral resources - world class JORC‐code compliant rare earth - uranium resource established

Sample material from infill drill holes ready for assay, looking to establish measured category resources at Kvanefjeld deposit, and an initial mine reserve

Process development - prioritises 'critical' rare earth production, with by‐production of U3O8, La and Ce products, zinc sulphide and fluorspar; process design package complete

Aligned with top‐tier rare earth development partner in NFC - looking to negotiate a Strategic

Cooperation Agreement, with the aim of establishing a global rare earth business partnership

Integrating NFC's rare earth separation expertise and capacity with cost‐competitive production of critical rare earth concentrates from Kvanefjeld to create full value chain, and path to market

Extensive stakeholder engagement in Greenland, along with input from NFC, has firmed a preferred development scenario; both mineral beneficiation and refining process steps to be conducted in Greenland to produce RE intermediate products, U3O8, zinc sulphide and fluorspar

Feasibility Study - key work programs have been initiated to update engineering design and cost estimates

Permitting - looking to finalise a mining license application through 2014; Environmental and

Social Impact Assessments to be completed in this period World Class Resources, Non‐Refractory Minerals, Simple Processing Route

The Kvanefjeld Project centred on the northern Ilimaussaq Intrusive Complex, located near the southwest tip of Greenland, is underpinned by a world class rare earth‐uranium resource. As a result of extensive exploration drilling campaigns from 2007 to 2011, delineated JORC‐code compliant mineral resources include 956 million tonnes at 273 ppm U3O8, 1.08% TREO and 0.24% Zn hosted through three deposits. Significant tonnage of higher grade material (e.g. >120 Mt in the Kvanefjeld deposit @ >1.37% TREO, >400ppm U3O8) is hosted through the upper levels of the deposits, and is the focus of mine studies. There is clear scope to increase the resource base several fold, with less than 20% of the prospective project area evaluated to date.
While the resources are extensive, a key advantage to the Kvanefjeld project is the unique rare earth and uranium‐bearing minerals. These minerals can be effectively beneficiated into a low‐mass, high value mineral concentrate, then leached with conventional acidic solutions under atmospheric conditions to achieve particularly high extraction levels of both heavy rare earths and uranium. This presents a simple process route with low technical risk that translates to an economically‐robust project.
GMEL has access to cores from previously unsampled drill holes located in the middle of the
Kvanefjeld deposit. Assaying of this material will soon commence, with the aim of establishing
'measured' category resources at the Kvanefjeld deposit, then working to establish an initial mine reserve.

Advanced Process Development: Targeting the 'Critical Rare Earths'

Through the development of an efficient process flow sheet for Kvanefjeld GMEL has placed a strong emphasis on the recovery of a subset of rare earths for which demand is strong owing to their application in growth industries. These are commonly referred to as the 'critical rare earths'; a term generated through a United States Department of Energy study that was undertaken in 2010. This study identified the rare earth elements that are important to clean energy technologies, and investigated their supply risk for the short to medium term (5‐10 years).
The rare earths that are considered critical in this study include neodymium, europium, dysprosium, terbium, and yttrium. Reconnaissance studies to address future rare earth supply (e.g. Technology Metals Research, CRE Report, 2011), highlight that Kvanefjeld could supply 20‐30% of critical rare earths from the later part of this decade. GMEL anticipates that the global supply of the REEs lanthanum and cerium will increase significantly post‐2015, and has therefore focused on the critical RE's that are likely to remain in short supply for many years to come, while demand is set to continue to grow.

Table 1. The expected production of separated rare earths as oxides from the REE Separation Plant.

Product

REO

(tonnes/year)

Pr

933

Nd

2,850

Eu

27

Tb

31

Dy

213

Y

1,585

Total Critical

REO

6,376

In addition there are potentially further revenues from the sales of rare earth element oxides which are not included in the list considered critical. These include La, Ce, Sm, Gd and Lu, and total sales of these rare earths may vary from year to year, subject to demand.

Current Status of Development Plans

GMEL is currently completing the Feasibility Study for the Kvanefjeld Project. Through 2010‐12 GMEL finalised a comprehensive testwork and design program that focussed on identifying and evaluating the optimal process flow sheet for the Kvanefjeld project. Following the release of a pre‐feasibility study in 2012, continued test‐work served to further enhance the process flow sheet, and the process design package has since been completed.
The Kvanefjeld Project involves a number of processing stages to convert the ore into multiple high‐ value, marketable products. The first stage is a mine and concentrator that will produce a rare earth‐ and uranium‐rich mineral concentrate, in addition to zinc sulphide and fluorspar. This beneficiation stage has been the subject of two successful pilot plant campaigns, with outcomes provided in the Mine and Concentrator Study released in March 2013. This circuit will also be the subject of a demonstration plant operation in early 2015 for the EURARE program (see Company announcement July 1st, 2014). The next stage involves a hydrometallurgical refinery which includes a number of separation steps to extract the value components from the mineral concentrate and produce marketable products.
The hydrometallurgical refinery produces a critical rare earth intermediate product stream, a saleable uranium oxide product, as well as La and Ce rare earth products. The critical rare earth intermediate product stream requires further treatment to separate the rare earths into their individual oxides.

Alignment with a Top‐Tier Rare Earth Development Partner

In March 2014, GMEL announced that it had entered into a Memorandum of Understanding with China Non‐Ferrous Metal Industry's Foreign Engineering and Construction Co. Ltd (NFC). NFC has a strong reputation in engineering, financing, constructing and operating mines, smelters, and refineries in many parts of the world. NFC's participation in the rare earth industry comes through its subsidiary Guangdong Zhujiang Rare Earths Company, a recognised global leader in rare earth separation technology.
NFC intends to increase its participation in the global rare earth business, and has a new 7000tpa capacity rare earth separation facility expansion planned, with all approvals, design and financing in place. Upon completion, this will represent one of the world's newest, largest‐capacity and most technologically advanced rare earth separation facilities.
GMEL and NFC are currently negotiating a Strategic Co‐operation Agreement with the objective of establishing a global rare earth business partnership. This will be achieved by combining the cost‐ competitive production of critical rare earth intermediate products from Kvanefjeld with NFC's expertise and capacity in downstream rare earth separation. This business will utilize the Kvanefjeld product as the raw material feedstock for a new separation facility based in Xinfeng, China. The rare earth products would be jointly marketed by GMEL (outside China) and NFC (inside China). Importantly, the strategy provides access to rare earth separation, and a path to market for high‐ value end products.

Kvanefjeld Feasibility Study

The Feasibility Study is evaluating a mine, concentrator and hydrometallurgical refinery in Greenland treating 3 million tonnes of ore per annum (Figure 1). The concentrator will produce 230,000 tonnes per annum of a rare earth mineral concentrate which contains 14% REO and 0.25% U3O8. Refining of this mineral concentrate is expected to produce 7,000 tonnes per annum of critical rare earths (Pr, Nd, Eu, Dy, Tb, Y) 16,000 tonnes per annum of light rare earths (mostly Ce & La) and 1.1 million pounds per annum of U3O8.
Figure 4.1

Figure 1. The main processing steps involved in the Kvanefjeld project and their location.

GMEL has selected a number of key consulting groups to contribute to the Feasibility Study who are internationally recognized leaders in their respective fields of mining, engineering and project
development including:

1.

Geology

SRK Resource Estimation

2.

Mine

SRK Mine Design and Scheduling

3.

Process Plants

Tetra -Tech doing engineering based on in‐house process design

4.

Capital Cost

Cost estimation provided by Non Ferrous China (NFC)

5.

Port

Ramboll, a large Danish consulting group

6.

Power Supply

Istak for Hydropower and BWSC for Heavy Fuel Oil

7.

Logistics

Blue Water Shipping

Environmental and Social Impact Assessment (EIA and SIA)

In addition to the above, GMEL has been working in close association over the past 5 years with two leading Danish consultancies on the baseline monitoring for the EIA and SIA. Orbicon have completed the environmental baseline monitoring and will now be in a position to finalise the
drafting of the EIA. Grontmij have also largely completed the social baseline assessment. Further community consultation is planned in August of this year and the first draft of the SIA is expected to be finalized over the coming months.
Since project inception in 2007 GMEL has actively involved the local Narsaq community, the southern municipality (Kommune Kujalleq), various key departments of the central Greenlandic Government as well as other key stakeholders such as the SIK (local union movement) and the GA (Employer's Association) in the dialogue on the development of the Kvanefjeld Project.
In July 2011, after extensive consultation GMEL received approval for the Terms of Reference for the Environmental Impact Assessment (EIA) and the Social Impact Assessment (SIA). In 2013 GMEL commenced an additional round of key stakeholder consultation in order to assess an alternative option for the project, namely only constructing a mine and mineral concentrator in Greenland and relocating the hydrometallurgical refinery for separating the uranium and REO mixed carbonate off‐ shore.
Since August 2013, GMEL has conducted a number of constructive and informative workshops with representatives of the Mining Licence and Safety Authority (MLSA), the Ministry of Industry & Mineral Resources, the Environmental Agency for the Mineral Resources Area (EAMRA) and the Kommune Kujalleq, to discuss the various development options available.

Figure 2. An overview of the Narsaq peninsula, south Greenland, and the planned location of key infrastructure components of the Kvanefjeld project. Residue Storage Facility A (RSF A) is to store the tails of the beneficiation processing stage, which is largely untreated silicate minerals (e.g. feldspar, amphibole).

Negotiations on a global rare earth business partnership with NFC are progressing well, and based on the support from NFC and the advice from the local key stakeholders GMEL considers that the most suitable location for the hydrometallurgical refinery is in Greenland, adjacent to the mine and concentrator (see Figure 2). Consequently this scenario has been selected as the basis for the Feasibility Study and the Terms of Reference for the EIA and SIA (approved in 2011) will be updated to reflect this.
Following the recent successful completion of an over‐subscribed rights issue, GMEL is well placed to advance toward achieving key milestones; the completion and lodgement of a mining license application and the establishment of a Strategic Cooperation Agreement with NFC.
Both milestones represent critical steps in advancing the Kvanefjeld project into the development phase.
.
Yours faithfully,

Roderick McIllree

Managing Director

Greenland Minerals and Energy Ltd

ABOUT GREENLAND MINERALS AND ENERGY LTD.

Greenland Minerals and Energy Ltd (ASX - GGG) is an exploration and development company focused on developing high‐quality mineral projects in Greenland. The Company's flagship project is the Kvanefjeld multi‐ element deposit (Rare Earth Elements, Uranium, Zinc), that is rapidly emerging as a premier specialty metals project. A comprehensive pre‐feasibility study has demonstrated the potential for a large‐scale, cost‐ competitive, multi‐element mining operation. Through 2014, the Company is focussed on completing a mining license application in order to commence project permitting. For further information on Greenland Minerals

and Energy visit http://www.ggg.gl or contact:

Roderick McIllree David Tasker Managing Director Professional PR +61 8 9382 2322 +61 8 9388 0944

Greenland Minerals and Energy Ltd will continue to advance the Kvanefjeld project in a manner that is in accord with both Greenlandic Government and local community expectations, and looks forward to being part of continued stakeholder discussions on the social and economic benefits associated with the development of the Kvanefjeld Project.

The information in this report that relates to exploration targets, exploration results, geological interpretations, appropriateness of cut‐off grades, and reasonable expectation of potential viability of quoted rare earth element, uranium, and zinc resources is based on information compiled by Mr Jeremy Whybrow. Mr Whybrow is a director of the Company and a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Whybrow has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the

2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Whybrow consents to the reporting of this information in the form and context in which it appears.

The geological model and geostatistical estimation for the Kvanefjeld, Sorensen and Zone 3 deposits were prepared by Robin Simpson of SRK Consulting. Mr Simpson is a Member of the Australian Institute of Geoscientists (AIG), and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Simpson consents to the reporting of information relating to the geological model and geostatistical estimation in the form and context in which it appears.

This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

Statement of Identified Mineral Resources, Kvanefjeld Multi‐Element Project (Independently Prepared by SRK Consulting).

Multi‐Element Resources Classification, Tonnage and Grade

Contained Metal

Cut‐off

Classification M tonnes TREO2 U3O8 LREO HREO

REO

Y2O3

Zn

TREO

HREO Y2O3

U3O8

Zn

(U O ppm)1

Kvanefjeld ‐ March 2011

Mt ppm ppm ppm ppm ppm ppm ppm Mt Mt Mt M lbs Mt

150 Indicated 437 10929 274 9626 402 10029 900 2212 4.77 0.18 0.39 263 0.97

150 Inferred 182 9763 216 8630 356 8986 776 2134 1.78 0.06 0.14 86 0.39

150 Grand Total 619 10585 257 9333 389 9721 864 2189 6.55 0.24 0.53 350 1.36

200 Indicated 291 11849 325 10452 419 10871 978 2343 3.45 0.12 0.28 208 0.68

200 Inferred 79 11086 275 9932 343 10275 811 2478 0.88 0.03 0.06 48 0.20

200 Grand Total 370 11686 314 10341 403 10743 942 2372 4.32 0.15 0.35 256 0.88

250 Indicated 231 12429 352 10950 443 11389 1041 2363 2.84 0.10 0.24 178 0.55

250 Inferred 41 12204 324 10929 366 11319 886 2598 0.46 0.02 0.03 29 0.11

250 Grand Total 272 12395 347 10947 431 11378 1017 2398 3.33 0.12 0.27 208 0.65

300 Indicated 177 13013 374 11437 469 11906 1107 2414 2.30 0.08 0.20 146 0.43

300 Inferred 24 13120 362 11763 396 12158 962 2671 0.31 0.01 0.02 19 0.06

300 Grand Total 200 13025 373 11475 460 11935 1090 2444 2.61 0.09 0.22 164 0.49

350 Indicated 111 13735 404 12040 503 12543 1192 2487 1.52 0.06 0.13 98 0.27

350 Inferred 12 13729 403 12239 436 12675 1054 2826 0.16 0.01 0.01 10 0.03

350 Grand Total 122 13735 404 12059 497 12556 1179 2519 1.68 0.06 0.14 108 0.31

Sørensen ‐ March 2012

150 Inferred 242 11022 304 9729 398 10127 895 2602 2.67 0.10 0.22 162 0.63

200 Inferred 186 11554 344 10223 399 10622 932 2802 2.15 0.07 0.17 141 0.52

250 Inferred 148 11847 375 10480 407 10887 961 2932 1.75 0.06 0.14 123 0.43

300 Inferred 119 12068 400 10671 414 11084 983 3023 1.44 0.05 0.12 105 0.36

350 Inferred 92 12393 422 10967 422 11389 1004 3080 1.14 0.04 0.09 85 0.28

Zone 3 ‐ May 2012

150 Inferred 95 11609 300 10242 396 10638 971 2768 1.11 0.04 0.09 63 0.26

200 Inferred 89 11665 310 10276 400 10676 989 2806 1.03 0.04 0.09 60 0.25

250 Inferred 71 11907 330 10471 410 10882 1026 2902 0.84 0.03 0.07 51 0.2

300 Inferred 47 12407 358 10887 433 11319 1087 3008 0.58 0.02 0.05 37 0.14

350 Inferred 24 13048 392 11392 471 11864 1184 3043 0.31 0.01 0.03 21 0.07

Project Total

Cut‐off Classification M tonnes TREO2 U O

LREO HREO REO Y2O3

Zn TREO HREO Y2O3

U3O8 Zn

(U O ppm)1

Mt ppm ppm ppm ppm ppm ppm ppm Mt Mt Mt M lbs Mt

150 Indicated 437 10929 274 9626 402 10029 900 2212 4.77 0.18 0.39 263 0.97

150 Inferred 520 10687 272 9437 383 9820 867 2468 5.55 0.20 0.45 312 1.28

150 Grand Total 956 10798 273 9524 392 9915 882 2351 10.33 0.37 0.84 575 2.25

1There is greater coverage of assays for uranium than other elements owing to historic spectral assays. U3O8 has therefore been used to define the cut‐off grades to maximise the confidence in the resource calculations.

2Total Rare Earth Oxide (TREO) refers to the rare earth elements in the lanthanide series plus yttrium. Note: Figures quoted may not sum due to rounding.

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Sales 2020 0,16 M 0,12 M 0,12 M
Net income 2020 -3,08 M -2,30 M -2,30 M
Net cash 2020 36,0 M 26,9 M 26,9 M
P/E ratio 2020 -102x
Yield 2020 -
Capitalization 133 M 99,4 M 99,4 M
EV / Sales 2019 2 293x
EV / Sales 2020 2 018x
Nbr of Employees 28
Free-Float 81,4%
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