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A Vital pivot in rare earths strategy

To take a more measured approach to Saskatchewan REE facility in favor of a larger mine at Nechalacho in NWT, Canada Metal Tech News - January 4, 2023

Following an AU$45 million (US$31.6 million) infusion of cash in July, Vital Metals Ltd. has gone through some significant changes that are being reflected in a new strategy that slows the ramp-up of production at the company's rare earths separation plant in Saskatchewan and focuses the company's resources on expanding production at its Nechalacho Mine in Canada's Northwest Territories.

Shortly following this financing anchored by AU$30 million (US$21 million) contributed by Lionhead Resources Fund, a private equity fund focused on mid-tier clean energy mineral producing companies, former managing director Geoff Atkins resigned, and Lionhead partner Russell Bradford filled the top executive position on an interim basis.

Lionhead Resources Fund is shepherding Canada's first and only rare earths mining company in a new direction.

In November, John Dorward, a mining executive that most recently served as president and CEO of Canada-based Roxgold Inc., was named Vital's new managing director.

A new chief financial officer and chief operating officer were also appointed to Vital management team following the financing.

Under Atkins' leadership, Vital focused on an incrementally growing complete rare earths supply chain approach that involved a small mining operation that focused on fantastically high-grade ore at Nechalacho and a processing plant in Saskatchewan that produced a mixed rare earth carbonate that would be shipped to third parties for final separation.

Upon reviewing the construction progress and costs at the Saskatoon processing facility, the new management team is pivoting Vital's strategy to a sharper focus on advancing the world-class Tardiff deposit at Nechalacho, "which has the potential to anchor what we believe will ultimately be a globally significant producer of rare earth minerals," according to the company.

Tardiff-sized strategy

Over the previous two years, Vital has focused its mining at North T, a Nechalacho deposit with 101,000 metric tons of mineral resources averaging 9.01% total rare earth oxides. While this deposit hosts fantastically high grades, it is small.

Tardiff, on the other hand, hosts 95 million metric tons of resources averaging 1.46% (138,700 metric tons) total rare earth oxides. While much lower grade than North T, this deposit is still much higher grade than the average deposits being mined globally. Tardiff is also well enriched with neodymium and praseodymium – the highest demanded rare earths due to their use in the permanent magnets that go into electric vehicle motors and a wide range of high-tech devices – which make up roughly 24% of the total rare earth content.

"Deposits of this quality, located in a stable and mining-friendly jurisdiction such as Canada, are very rare and demand a coherent development strategy," Vital penned in a statement.

The new Vital management team is already working on an initial economic assessment that will provide the framework for that coherent strategy.

"This initial economic assessment will provide a roadmap for the potential of the broader Nechalacho Project and will form a key plank of our discussions to showcase Nechalacho to investors, offtakers and government partners," the company explained.

This scoping-level study will incorporate a soon-to-be-released mineral resource estimate that incorporates the results from drilling over the past two years.

Highlights from Vital's drilling into the shallow, flat-lying orebody at Tardiff include:

31.8 meters averaging 4.35% TREO from a depth of 11.5 meters.

60.9 meters averaging 1.92% TREO from a depth of 11.4 meters.

40 meters averaging 2.54% TREO from a depth of 16 meters.

51 meters averaging 2.13% TREO from a depth of 11 meters.

48.1 meters averaging 2.03% TREO from a depth of 13 meters.

The initial economic assessment is due to be completed mid-2023.

Immediately following the completion of the scoping study, slated for midyear, Vital intends to move directly into developing a definitive feasibility study for establishing a mine at Nechalacho's Tardiff deposit.

The feasibility study will include an updated resource estimate that will include results from targeted drill programs carried out in the first quarter of this year and 2024.

The primary objective of this drilling is to upgrade inferred resources into the higher confidence measured and indicated categories, which can then be converted to reserves upon completion of the feasibility study.

This year's program is expected to consist of 5,500 meters of diamond drilling. In addition to Tardiff infill drilling, the company plans to carry out resource expansion and upgrade drilling at North T to support a revised mining plan for this very high-grade deposit.

Saskatoon not forsaken

While much of Vital's focus is on expanding mining operations at Nechalacho, the company has not forsaken the Saskatoon processing plant. Instead, the company is taking a more measured approach to this second link in the rare earths supply chain.

"A large component of our efforts in 2023 will be to deliver a sustainable business plan for the Saskatoon Plant, which will include securing additional feed from Nechalacho and potentially third-party sources," said Dorward.

The company says this decision is to better allocate cash and align with the completion of this facility with the timeline of REEtec, a Norway-based company with an offtake agreement to separate mixed concentrates produced at Vital's Saskatoon plant into individual rare earths ready for market.

Vital says roughly AU$19.7 million (US$13.4 million) has been invested in the Saskatoon plant so far and roughly another AU$40.8 million (US$27.8 million) will be needed to complete the rare earths processing facility. The company attributes the ballooning AU$60.5 million (US$41.2 million) price tag to double annual neodymium-praseodymium production at the plant to 1,000 metric tons, execution challenges, and industry inflation.

Vital says it can defer roughly AU$17.4 million (US$11.8 million) of the additional funds for the Saskatoon plant to the end of 2024 by aligning development plans with the completion of REEtec's separation plant in Norway.

In the meantime, the company will work towards completing the calcine circuit at Saskatoon – a preparatory step that makes rare earths easier to separate – in the third quarter of this year.

"After visiting Saskatoon last week, I came away impressed with the calibre of the new operations team under the leadership of our recently appointed Chief Operating Officer, Eben Visser," Dorward said in late December.

Overall, Vital says its plan is being guided by Canada's recently unveiled critical minerals strategy and the refocused company will "work closely with Canada to build the rare earth extraction and processing value chains to supply the green and emerging industries of Canada and its aligned countries."

Author Bio

Shane Lasley, Metal Tech News

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With more than 15 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.


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