The owner of the Nechalacho rare earths property, east of Yellowknife, has published a new study outlining a potential “viable, long-term” mine at the site.
Vital Metals published its Tardiff scoping study on Monday, which the company has long suggested would be an important milestone for Nechalacho.
Tardiff is the name of a massive rare earths deposit at the site. The scoping study, which was many months in the making, uses everything Vital knows about Tardiff so far to set out what a mine there could look like.
Among the study’s key findings, Vital estimates the mine could:
- last for 11 years as an open-pit rare earths mine;
- deliver a pre-tax net present value (an estimate of lifetime cash value in today’s dollars) of US $776 million ($1 billion); and
- cost US $291 million ($400 million) to build.
Vital doesn’t have that money and there’s no sense that Nechalacho is on the verge of construction, but the company said the results of its scoping study were positive.
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“The study is an essential step towards moving the project forward,” Vital boss Lisa Riley was quoted as saying in a press release.
“It is a first step towards Vital playing a key role in building critical minerals supply chain in Canada. The study has outlined the potential to build a viable, long-term rare earths and niobium project at Tardiff.”
The $1-billion net present value of the Tardiff deposit drops to about $525 million if current market prices for the rare earths found at the site are used. The billion-dollar figure relies on forecasts that prices will meaningfully increase.
A scoping study is a preliminary economic assessment of what a company could get from a deposit. Importantly, its authors – consultants ERM, hired by Vital to produce the study – state their work “does not confirm a viable economic development case at this point,” though they assert Tardiff has the look of a “robust project with compelling economics.”
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Vital is now expected to move to a prefeasibility study, which is ordinarily the next step for a potential mine.
A prefeasibility study does more than just study the deposit. It’ll look at some of the socio-economic, regulatory and political factors that need to be accounted for before a mine is pursued.
The authors of the scoping study also say the North American rare earths market and supply chain need to be further developed before Tardiff can become a successful project.
Vital said it was already working as part of a consortium to build up a Canadian rare earths supply chain.
Nechalacho was briefly run as a “demonstration” mine several years ago. That small project used a different deposit at the Nechalacho site and has since ceased operation.
