Defense Metals Outlines $992 Million After Tax NPV For Wicheeda Rare Earth Project
Defense Metals Corp (TSXV: DEFN) has released a prefeasibility study for its Wicheeda rare earth element deposit in British Columbia. The study has outlined a net present value of $992 million on an after tax basis, with the project having an IRR of 18.9% and a payback period of 3.7 years.
The study envisions a 15-year life of mine, based on an open pit operation that would feed a 5,000 tonne per day flotation concentrator. Average annual production would amount to 31,900 tonnes of total rare earth oxide in concentrate. After the removal of cerium and Ianthanum, 5,200 tonnes of TREO in a mix of rare earth carbonates is expected to be produced annually.
The proposed mine is expected to produce one of the highest grade floatation rare earth mineral concentrates globally thanks to the unique geology of the deposit. The concentrate is expected to contain 50% TREO, with recovery rates estimated at 81%.
Initial capital of the project is estimated at $1.4 billion, while cash operating costs are expected to average $165 million, or $37.42 per kilogram of NdPrO equivalent recovered. The study meanwhile is based on an average price of $136.60 per kilogram of NdPrO equivalent.
“With a pre-tax IRR of 24.6% and a pre-tax NPV of US$1.8 billion, our PFS confirms the robust economics this project has to offer. These results position the Wicheeda Project as one of the most compelling rare earth projects in North America or Europe. Given the increasing geopolitical tensions affecting rare earth supply chains, there is significant potential for rare earth prices to rise, further enhancing Wicheeda’s value and maximizing returns for our shareholders,” commented Mark Tory, CEO of Defense Metals.
“Looking ahead, we will focus on optimizing the project’s design to maximize operational efficiency and ultimately shareholder returns. Additionally, we will engage with potential strategic partners to support the project’s growth and development,” Tory continued.
Defense Metals last traded at $0.165 on the TSX Venture.
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