Greenland Minerals and Energy slashes Kvanefjeld capital costs
Thursday, September 17, 2015 by Proactive Investors
proactiveinvestors.com.au
Greenland Minerals and Energy ( ASX:GGG) has reduced capital costs at its Kvanefjeld rare earth-uranium project in Greenland by US$118 million, or 14% of total plant direct costs.
This was achieved through the reduction in civil earth works by locating both the concentrator and refinery on a single site instead of separate sites as originally considered in the Feasibility Study.
A completed Feasibility Study in May 2015 showed that the Kvanefjeld Project can be developed as a long-life, low-cost producer of critical rare earth elements.
This estimated project CAPEX at US$1.36 billion including direct plant costs of US$804.8 million.
Ongoing optimisation in product recoveries, and third party infrastructure financing strategy could see further reductions in CAPEX.
The consolidation is also expected to result in operating costs savings of about US$2.12 million.
These optimisation studies will incorporate the latest developments from metallurgical test work, including recent pilot plant operations.
The pilot plant operation of the Refinery circuit is currently being concluded in Finland, as part of the EURARE collaboration.
Optimisation work is also targeting operating cost reductions from greater work flow effectiveness, which will further entrench Kvanefjeld as a low cost source of rare earths, as well as the third party infrastructure financing strategy,
The company is currently raising up to $6,142,198 through a 1 for 4 rights issue priced at $0.035 to finalise mining licence application for the project.
Kvanefjeld is one of the most advanced, undeveloped rare earth and uranium projects globally with a maiden Ore Reserve of 108 million tonnes (Mt) at 362ppm U3O8, 2,600ppm zinc and 14,300ppm total rare earth oxides.
This is sufficient to underpin an initial 37 year mine-life.
It is poised to be a globally significant producer of high-value critical rare earth concentrates, in the lowest cost quartile, that will also produce by-products such as uranium oxide, zinc concentrate, lanthanum and cerium products, and fluorspar.
Optimisation Studies
Since completing the Feasibility Study in May 2015, GGG has initiated a series of optimisation studies that are expected to lead to significant capital cost reductions.
The first point of focus has been on the project lay-out.
The original Feasibility Study was based on the use of two separate process plant sites for the concentrator and the refinery, with the run-of-mine (ROM) ore stockpile located within the footprint of the concentrator site.
A detailed review of potential plant layouts has subsequently taken into consideration the impact of plant modularisation, the impact of potential recovery improvements and the requirement to provide flexibility for future capacity expansions.
GGG has established that by moving the ROM ore stockpile from the concentrator site to the mining area, reconfiguring the concentrator and refinery plants and removing common equipment and facilities, the concentrator and refinery plants can be accommodated within the originally identified concentrator site.
This will result in a capital cost saving of US$118.3 million due to reduced blasting, excavation and hauling along with reduced pipeline requirements and sharing of facilities.
It also reduces operating costs by US$2.12 million per annum from operational synergies and sharing facilities.
Analysis
Greenland Minerals and Energy has made a successful first step in optimising its Kvanefjeld Project with the consolidation of the concentrator and refinery reducing capital costs by US$118.3 million.
Further optimisation studies are being carried out that could further reduce the cost of developing the project, which could be a producer of high-value critical rare earth concentrates and by-products such as uranium oxide, zinc concentrate, lanthanum and cerium products, and fluorspar
Other news flow ahead includes the ongoing exploitation (mining) licence application.
The company currently has $2 million in cash at hand. |
