Emerging multi element exploration and development company Greenland Minerals and Energy Ltd (ASX:GGG) (“GMEL” or “the Company”) is pleased to announce the results of the interim report from its pre-feasibility study into the likely development scenarios for the multi-element Kvanefjeld Project (“Kvanefjeld”) located in Southern Greenland. 

 

The interim report from the GMEL pre-feasibility study provided a Net Present Value (NPV) of US$2.18 billion and free cash flow of US$8.9 billion over the life of the project using the following key assumptions:

·        a processing rate of 10.8mt pa,

·        conventional open pit mine,

·        waste to ore strip ratio of 0.8:1, 

·        a project life of 23 years,

·        un-geared capital costs of US$2.31 billion,

·        construction commencing in 2013 with production commencing in 2015,

·        mean operating costs of 7.50/t of ore treated, and

·        Rare Earth carbonate prices of US$13/kg uranium price of US$80/lb, growing annually at 5%

 

The Report provided a clear indication that the Kvanefjeld Project could be developed as a world class, economically robust, large-scale mining operation that would produce a rare earth concentrate and uranium oxide over a +20 year mine life. Initial estimates indicate the proposed output at Kvanefjeld could rival that of Bayan Ebo in China, the world’s largest rare earth producing mine that accounts for approximately 40% of current world production.

 

“Should the Kvanefjeld Project be developed as outlined in the interim report it is also highly likely it will play a leading role in alleviating a worldwide shortfall of rare earths,” Said Greenland Minerals and Energy Managing Director, Mr. Roderick Mcillree.

 

“The People's Republic of China satisfies a total of 97 percent of global demand and in recent months indicated their desire to cease the export of certain rare earths, therefore creating a significant supply deficit in the market.”

Kvanefjeld’s JORC compliant resource estimate, containing 4.79mt of rare earth oxides (“REO”) and 0.12mt of uranium oxide, is recognised as the world’s largest REO resource by either JORC or Canadian NI 43-101 standards.

 

“The interim report on the Kvanefjeld PFS has confirmed the company’s view that the project not only economically sound, but will provide substantial cash flow over the life of the mine”, Mr Mcillree added.

 

“The results confirm that Kvanefjeld can fill the looming void in global rare earth supply. This should be welcome news to rare earth consumers worldwide.”.

 

Based on the results of its pre-feasibility study and associated interim report GMEL has now taken the decision to accelerate further studies into mining operations at Kvanefjeld to further enhance the project economics. The 2010 work programme will focus on:

·        Social and environmental impact studies,

·        Beneficiation studies,

·        Improving rare earth recoveries,

·        Investigating zinc recovery,

·        Improving mine schedule,

·        Converting inferred to indicated resources, and

·        Defining new multi-element resources.

 

A full summary of the Report is attached.

 

For further information visit www.ggg.gl or contact:

 

Roderick Mcillree                          David Tasker (Australia)                    Laurence Read (UK)

Managing Director                        PPR                                                     Threadneedle PR

+61 8 9226 1100                           T: +61 8 9388 0944                            +44 20 7653 9855

 

Greenland Minerals and Energy Ltd (ASX: GGG) is an exploration and development company focused on unlocking the mineral riches of southern Greenland. The Company’s flagship project is the Kvanefjeld multi-element deposit (rare earth elements, zinc, uranium), that is rapidly emerging as the world’s premier specialty metals projects. Kvanefjeld has now entered the pre-feasibility phase that will ultimately map out a path to development and timeline to production.