The Australian-owned Kvanefjelds project in South Greenland, which must be broken rare earths – including the controversial uranium – given high priority of the new government in Greenland.

By: Bent Sørensen Højgaard bso@berlingske.dk

With Greenland’s first female prime minister, Ms Hammond, at the helm rates of the new social democratic Siumut-control unyielding that Greenland within a few years could become an exporter of especially rare earth metaller.Det Australian owned project at Kvanefjeld in South Greenland, where the plan is to break Rare earth in a big way – including extraction of the controversial element uranium – will therefore be a high priority of the new government in Greenland.

Greenland has been a political leader who, like his predecessor Kleist struggling to get boosted mining to raise tax revenue to the community.

But the two chief executives policy to make it happen are very different. While Kleist from the socialist Inuit Ataqatigiit (IA) has been keen to get the particular the giant iron mining project Isua at Nuuk to 13 billion by cheap Chinese labor, puts Ms Hammond a somewhat different line. She and her Government considers that the recently been adopted, storskalalov is flawed and therefore requires a revision of the law.And it will take some time.

Therefore, Landsstyre soon initiate legislative work to pave the way for mining of ore with rare earths in particular Kvanefjeld at Narsaq in South Greenland and a handful of other places. The popular elements can not be broken without also comes with uranium as biprodukt.Minen and a production plant in Kvanefjeld, according to the Australian mining company Greenland Minerals and Energy built for 2.6 billion addition an investment of 2.1 billion kr . the refining of uranium and rare earths outside Greenland. “It is important that Greenland decides to repeal of zero tolerance towards uranium. But for us in government is also important to have a law that protects the environment, safety and health. We’ll be quick at the pace that is needed in order to submit a bill in the Greenlandic parliament, “said Premier.

If The government gets the legislative process completed before the autumn session of the Parliament, the Minister of raw materials, Jens Erik Kirkegaard, Siumut, submit a bill repealing zero tolerance towards uranium at the meeting.

More projects on the way
Premier Ms Hammond argue that Kvanefjelds project is one of my projects that can both provide much needed revenue to Greenland and help to reduce the record-high unemployment Greenland.

“It is not the only mine, we would like to have started. But it is one of the mines, our priorities in our government’s agenda. Greenland wants greater economic independence and flexibility. We need new revenues, as it is too vulnerable mainly to base its economy on fishing, “says Ms Hammond.

“Our government think it is important that Greenland can use options to ensure economic growth, based on our own resources. We will also send a clear signal to the mining companies that will extract rare earths that we will here. ”

One of the other mining projects involving rare earths, and the Cabinet of minister Jens Erik Kirkegaard want promoted, the Australian mining project Kringlerne in South Greenland. In addition, a project by Motzfeldt Lake in the same region and one in Kangerlussuaq in West Greenland.

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Read Full Company Report 13 December 2011

Event

Maiden JORC Resource for Zone 2 at Kvanefjeld complex.

Highlights

• GGG has announced its maiden JORC-compliant resource for Zone 2 of 242M tonnes @ 304ppm U₃O₈ and 1.1% TREO (Total Rare Earth Oxide). This adds 46% to the existing uranium inventory, bringing the total to 512M lbs and over 39% to its total rare earth resource, bringing the total to 9.2M tonnes. GGG has also announced that a higher grade area within Zone 2 has been identified and drilled. This high grade area contains 119M tonnes of ore at 400ppm U₃O₈ and 1.2% TREO.
• Zone 2 is only 6 km away from the existing Kvanefjeld deposit which has 619M tonnes @ 257ppm U₃O₈ and 1.05% TREO. It now seems that the mineralogy of Zone 2 is similar to Kvanefjeld with metallurgical synergies expected. Zone 2 is still open towards the Kvanefjeld deposit with the possibility that the two deposits may indeed be one giant deposit.
• A total of 23 holes have been drilled in Zone 2, totaling 10,351m. These were used for the independent calculation of the JORC-compliant resource by SRK Consulting.
• GGG’s rare earth resource inventory now includes 330,000 tonnes of heavy REO, 740,000 tonnes of Yttrium.
• We are now waiting for drill results for Zone 3 and Steenstrupfjeld, two other deposits in the region. It is now likely that we could see over 1.0 billion tonnes of ore in the region at +250ppm U₃O₈ and +1.1% TREO making this deposit the largest in the world with over 10M tonnes of rare earths.

Recommendation

• GGG’s Kvanefjeld rare earth and uranium complex is now growing to mega proportions. Indeed, there is probably little added drilling required as the deposit contains over 70 years’ the entire global consumption of rare earths. The game plan appears to be uranium and a major push by GGG in seeking a relaxation to the “Zero Tolerance” stance to uranium by the Greenland Government. With outstanding metallurgical recoveries achieved and very strong beneficiation results via atmospheric leaching, the next stage in the company’s history will be a positive move by the government to give uranium exploitation on the Island the go-ahead. The fact that the Government has only ever issued one licence for the exploration of radioactive materials (to GGG), we believe this is a positive sign to future relaxation to the Zero Tolerance stance. We have a $1.80 price target on GGG and a Buy recommendation.

One of the Great Accumulations of Rare earths & Uranium

The Kvanefjeld complex consists of the main Kvanefjeld orebody, Zone 2 & 3 and a smaller deposit called Steenstrupfjeld. A JORC-compliant resource now exists of 861M tonnes containing 9.22M tonnes of rare earths and 512.8Mlbs of U₃O₈. Over 340,000 tonnes of “Heavy Rare Earths” also exist in the main deposit. Zone 3 & Steenstrupfjeld resources are expected to be released over the coming weeks with a high chance to extending the total deposit past 1.0 billion tonnes. Chart 1 outlines the location of the four (4) mineral deposit on-site.

Zone 2

Zone 2 is 6km away from the main Kvanefjeld deposit and has now added 242M tonnes to the overall resource of the area. The ore appears to be similar to Kvanefjeld and metallurgical testing is expected to see similar results. The important aspect to Zone 2 is the grade, where the grade of rare earth is 5% higher and that of uranium is 18.3% higher. Zone 2 contains 162Mlbs of uranium at a grade of 304ppm. At a valuation of US$1-2/lb, this would underpin the valuation of GGG in itself.

Other Matters

GGG is expected to complete the buyout of its joint venture partner in Kvanefjeld by June 2012. Currently, GGG has 61% of the project and Westrip has the remainder 39%. A cash payment of $35m or equivalent remains. Recent metallurgical and beneficiation test-work by GGG has revealed that the ore can be beneficiated to <15% of its original mass. This will
have a dramatic reduction in mine site infrastructure requirements. The leaching of this concentrated ore under atmospheric conditions has yielded a recovery of between 90-95% of both uranium and rare earth products. These results will form part of the pre-feasibility work on Kvanefjeld project expected to be released by the company in the next 3-4 weeks.
GGG is now looking at a staged development of the project up to 40,000 tonnes per annum of rare earth product and 4-6M lbs of uranium production per annum. A feasibility study is expected to be released in the June quarter 2012. GGG and its joint venture partner have the only licence in Greenland to explore for radioactive minerals. We see this as a positive
move by the Government of Greenland towards the granting of a future Exploitation Licence, subject to all Environmental and Social Impact Studies being completed and endorsed by the Government.

Rating Classification

Risk Rating

Disclaimer

Shaw Stockbroking Limited ABN 24 003 221 583 (“Shaw”) is a participant of ASX Limited and holder of Australian Financial Services Licence number 236048.

ANALYST CERTIFICATION

The Research Analyst who prepared this report hereby certifies that the views expressed in this document accurately reflect the analyst’s personal views about the Company and its financial products.

The Research Analyst has not been, is not, and will not be receiving direct or indirect compensation for expressing the specific recommendations or views in this report. As at the date of this report the Research Analyst does not have an interest in the financial products of the Company.

DISCLAIMER

This report is published by Shaw to its clients by way of general, as opposed to personal, advice. This means it has been prepared for multiple distribution without consideration of your investment objectives, financial situation and needs (“personal circumstances”). Accordingly, the advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not the advice is appropriate for your personal circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of your Shaw client adviser.

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If you rely on this report, you do so at your own risk. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Shaw disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.

DISCLOSURE

Shaw will charge commission in relation to client transactions in financial products and Shaw client advisers will receive a share of that commission. Shaw, its authorised representatives, its associates and their respective officers and employees may have earned previously, or may in the future earn fees and commission from dealing in the Company’s financial products.

RISK STATEMENT

The analyst has determined that the risk profile for this company is significantly higher than for the market as a whole, and so may not suit all investors. Clients should make an assessment as to whether this stock and its potential price volatility is compatible with their financial objectives. Clients should discuss this stock with their Shaw advisor before making any investment decision.

Read Full Company Report

Statement of Identified Mineral Resources, Kvanefjeld Multi-Element Project.

1. Introduction Greenland Minerals and Energy Limited (“the Company”) and its subsidiaries acknowledge the benefits to the Company and all stakeholders arising from employee and board diversity. The Company is committed to workplace diversity and to ensuring a diverse mix of skills and talent exists amongst its directors, senior management and employees, to enhance Company performance. Diversity includes, but is not limited to, diversity in gender, age, ethnicity and cultural backgrounds.

   To the extent practicable the Company will address the recommendations and guidance provided in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations.

2. Objectives
   • Creating a culture conducive to attracting and the appointment of employees, senior management and board candidates with skills best suited to the requirements of the Company.
   • Fostering a work environment that values and encourages contributions of employees from diverse backgrounds, experiences and perspectives.
   • Appreciating and respecting the unique attributes that each individual contributes to the workplace.
   • Improve employment and career development opportunities for women.
   • Taking action to prevent and stop discrimination, bullying and harassment.

   The Diversity Policy does not impose on the Company, its directors, officers, agents or employee any obligation to engage in, or justification for engaging in, any conduct which is illegal or contrary to any anti-discrimination or equal employment opportunity legislation or laws in any State or Territory of Australia or of any foreign jurisdiction.

3. The Board’s commitmentThe Board is committed to workplace diversity, with a particular focus on supporting the representation of women at senior level of the Company and on the board.

   The Board is responsible for developing measurable objectives and strategies to meet the objectives of the Diversity Policy (“Measurable Objectives”) and monitoring the progress of the Measurable Objectives through the monitoring, evaluation and reporting mechanisms listed below.

   The Board may also set Measurable Objectives for achieving gender diversity and monitoring their achievement.

4. Strategies

   The Company’s diversity strategies include:

   • Recruiting, where possible from a diverse pool of candidates from diverse backgrounds, including employees, senior management and board positions.
   • Identifying specific factors to take account of in recruitment and selection processes to encourage diversity.
   • Ensure that employees, senior management and the board attend programs to increase awareness of issues in relation to the employment of staff from diverse backgrounds.
   • Developing a culture which takes account of domestic responsibilities of employees.
   • Any other strategies the Board or Remuneration Committee develops from time to time.
5. Monitoring and evaluationThe Chairman will monitor the scope and currency of the Diversity Policy.

   The Managing Director and senior management of the Company are responsible for implementing and reporting on the Measurable Objectives to the Chairman and the Board. This will include:

   • Ensuring that clear reporting processes and procedures are in place regarding implementation of this policy.
   • Measuring the effectiveness of the Company’s selection process and other diversity initiatives.
   • Measure the effectiveness of the Company’s diversity education and training.
   • Actively monitor recruitment, promotions and staff turnover within the Company and communicate statistics to the Board with reference to the policy

Mr Roderick McIllree is a corporate Geologist. A graduate of Curtin University of Technology School of Mines he has worked extensively throughout the globe from grassroots to mine development. After completing a Graduate Diploma in Mineral Economics, Roderick moved into the finance sector and worked as a mining analyst and equities advisor in mining and resources raising in excess of AU$250M from the Australian and international capital markets during the last decade. This broad based experience in terms of both capital markets and the minerals business provided the platform necessary to be an active member of the various teams that have established several successful mining ventures including Medusa Mining, Anvil Mining, and Kingsrose Mining.

Roderick was the founding Managing Director of Greenland Minerals and Energy Ltd, and planned and executed the push into Greenland with the acquisition of the Kvanefjeld project in 2007 being the outcome. During the last 6 years as the CEO of the company he has built an organisation of top level industry professionals, whilst successfully establishing the international profile of what is certain to be one the world’s largest mining operations of both heavy rare earths and uranium.

Read Recent ASX announcement :
Atmospheric Leaching Extracts 90-95% of Uranium and Heavy Rare Earths

23 February 2012

Read Full ASX announcement

Atmospheric Leaching Extracts 90-95% of Uranium and Heavy Rare Earths

Greenland Minerals and Energy Limited (“GMEL” or “the Company”) is pleased to provide an update on metallurgical developments that continue to enhance the Kvanefjeld multi-element project (rare earth elements, uranium, zinc). Kvanefjeld is recognised as one of the world’s largest resources of rare earth elements and uranium, and is favourably located near existing infrastructure in southern Greenland.

In June 2011, GMEL announced that it had identified a means to effectively beneficiate the Kvanefjeld REE-U mineralisation utilising froth flotation. This method was then piloted successfully under continuous operation to produce bulk mineral concentrates (announced October, 2011). Hydro-metallurgical leach studies on the mineral concentrates have now been completed.

Key outcomes:

• Beneficiation through froth flotation has now been well-tested, and reveals industry-leading upgrade ratios from ore to mineral concentrate representing <15% of the original mass
• Leach studies on the mineral concentrates demonstrate that the REE-uranium bearing minerals are highly amenable to conventional acid leach/solvent extraction
• Mineral concentrates can be leached under atmospheric conditions to yield extractions of 90-95% for uranium and heavy REEs
• Favourable leach solution chemistry allows for the generation of both heavy and light rare earth products
• Major advances in beneficiation and atmospheric leaching allow for the development of an enhanced, efficient flowsheet utilising conventional methods with low technical risk
• Developments eliminate the need for whole-of-ore pressure leaching and significantly reduce the scale of leach circuits, leading to a substantial reduction in capital expenditure
• The Company is looking to finalise its preferred flowsheet and development scenario through Q1 2012, before finalising pre-feasibility work on the Kvanefjeld project

Background
Greenland Minerals and Energy Limited (‘GMEL’ or ‘the Company’) has been advancing the Kvanefjeld project, located favourably in southern Greenland, since 2007. A large, outcropping multi-element resource of REEs, uranium and zinc has been defined at Kvanefjeld, with attention now focused on delineating resources at the high-grade satellite deposits Zones 2 and 3.

In parallel with resource development, the Company has been conducting comprehensive metallurgical and process development studies to optimise the Kvanefjeld processing route. A base-case flow sheet was established, as outlined in the Interim Pre-Feasibility Report on Kvanefjeld, released to the ASX in January 2010. The study drew upon extensive historical metallurgical studies generated by Danish Government research agencies, as well as initial studies conducted by GMEL through 2008 and 2009. The 2010 study clearly demonstrated that Kvanefjeld could be developed as a large-scale, long-life and cost effective producer of uranium and rare earth concentrates.

Through 2010 and 2011 focused metallurgical studies continued to advance processing alternatives. Breakthroughs in both mineral beneficiation and hydrometallurgical leaching have firmed up multiple flowsheet options, with trade off studies currently underway to establish the most robust scenario.

In 2011 GMEL commenced environmental and social impact assessments on the Kvanefjeld project, following an extensive phase of stakeholder engagement in Greenland. These studies are scheduled for completion in late 2012, and form key components of an exploitation (mining) license application. Infrastructure studies are also well-advanced. Engineering studies and stakeholder workshops have identified potential locations for key infrastructure items including port, processing plant, accommodation village and tailings storage facilities. Mining studies support a conventional open-pit operation, with a low-strip ratio (1:1) over life-of-mine.

TECHNICAL EVOLUTION

• In Q1 2010, GMEL released an Interim Pre-Feasibility report on the Kvanefjeld project. The study drew upon extensive historical metallurgical studies generated by Danish Government research agencies, as well as initial studies conducted by GMEL through 2008 and 2009. The 2010 study clearly demonstrated that Kvanefjeld could be developed as a large-scale, long-life and cost effective producer of uranium and rare earth concentrates.
• In 2011, GMEL released a new mineral resource estimate for Kvanefjeld that saw an increase in overall tonnage, and the definition of high grade domains through the upper level of the resource.  This allowed for an improvement in both REO and U3O8 grades in the mine schedule.
• Improvements were also made in REO recoveries in the base-case flowsheet that formed the basis of the Interim Pre-Feasibility report.
• Major beneficiation breakthroughs were achieved in 2011, with the establishment of a flotation method to concentrate the bulk of REOs and uranium into <15% of the original mass. The flotation circuit was scaled up and successfully piloted in Q3 2011. This development opened up a number of alternate flowsheet options to the base-case scenario.  By removing the non-economic minerals from the ore, conventional acid leaching methods can be considered along with alkaline leaching methods. Leach circuits can also be significantly downsized.

LEACHING OF FLOTATION CONCENTRATES

The beneficiation stage was piloted in Q3 2011, and importantly produced bulk mineral concentrates for metallurgical leach studies. These studies have now been completed with very positive results.

Controlled atmospheric leaching of the mineral concentrate in tanks produces extractions of 90-95% for both uranium and heavy REOs; the two main value drivers to the Kvanefjeld project. Light REOs are also recovered, but at a slightly lower level of extraction.

Following leaching, uranium and REOs can be recovered from pregnant leach solutions with commercially proven solvent extraction and ion exchange techniques.

The ability to achieve high extractions of uranium and heavy REOs using conventional acid solutions under atmospheric conditions is another critical breakthrough in establishing a cost-competitive, efficient flowsheet with low-technical risk. The synergies in leaching uranium and heavy REOs with a single leach circuit are anticipated to improve the economic metrics of the project significantly.

ESTABLISHMENT OF AN ENHANCED FLOWSHEET

The beneficiation and leaching developments form the basis of a flowsheet which consists of sequential froth flotation to firstly concentrate sphalerite (zinc sulphide), and then REE-uranium phospho-silicate minerals, which are then leached using conventional acid solutions under atmospheric conditions (Figure 1). This enhanced flowsheet is designed to produce uranium oxide, a heavy rare earth concentrate, light rare earth concentrate, and zinc concentrate (sphalerite). The Company views this scenario as a logical first phase of a staged development program.

The enhanced flowsheet represents an efficient and scalable development option. Its development reflects the ‘mineral-driven’ approach that the Company has taken throughout its metallurgical studies. The beneficiation-step provides a highly effective means of concentrating the dominant REE-uranium mineral group, from which uranium and REEs can then be simply and efficiently leached. The leach solution chemistry allows for the production of both heavy and light REE concentrates.

The Kvanefjeld project offers the potential for multiple product streams and revenue drivers. GMEL is primarily focused on optimising the project towards uranium and heavy REO production, which then provides greater flexibility in the marketing and pricing of light REE products.

Figure 1. A conceptual representation of the enhanced Kvanefjeld process flowsheet. Flotation produces a zinc concentrate, then a uranium- and REE-rich mineral concentrate that is leached using conventional acid solutions under atmospheric conditions. Uranium is recovered by solvent extraction prior to a stage of impurity removal before REOs are recovered. The majority of ore feed (gangue minerals) is stored as untreated flotation tailings, with only a small proportion (economic minerals) treated chemically to leach uranium and REOs.

In contrast to the base-case that featured an alkaline pressure leach circuit (uranium extraction) then an acid leach circuit (REO extraction), the enhanced flowsheet features a single leach circuit to extract both uranium and rare earths. That single leach circuit delivers high extraction rates from the flotation concentrate for both uranium and heavy REEs under atmospheric conditions. The leach circuit will also be of significantly smaller scale than those in the base-case as it will be treating a higher-grade mineral concentrate that represents <15% of the original ore mass.

As part of a staged development program future increases in uranium and rare earth output can be readily achieved through ramping-up mine throughput. This will be facilitated by expansion of the project’s global resource base following the imminent release of initial resource estimates for the Zones 2 and 3 satellite deposits.

The Company is extremely pleased with the technical developments that have been achieved by the in-house process development team in conjunction with external consultants, and is looking forward to finalising the pre-feasibility program in the coming months.

For the complete ASX announcement go to http://www.ggg.gl/docs/ASX-announcements/Technical-Breakthrough-Atmospheric-Leaching.pdf

Greenland Minerals & Energy [ASX: GGG]

Event
Dec.’11 Quarter Production & Cash Flow Report

Key Elements

• During the December quarter 2011, GGG’s mineral license EL 2010/02 was upgraded to the “right to exploit all economic components of the world‐class Kvanefjeld resource, pending outcomes of environmental and social impact assessments”. This was a major plus to the project’s future dynamics and paths the way for future development.
• Through the first half of 2011, GGG conducted extensive stakeholder engagement to establish the terms‐of‐reference for the Environmental Impact Statement [EIA] and [Social Impact Assessment [SIA]. These terms were approved by the Greenland Government in July 2011, and both the EIA and SIA are progressing on schedule. Both studies are expected to be completed by late 2012. The EIA and SIA form a critical part of an exploitation license application.
• A second zone of mineralisation, Zone 2, was subject to further drilling in the quarter with best results being 66m @ 474ppm U3O8 & 1.55% TREO, 60m @ 486ppm U3O8 & 1.15% TREO and 65m @ 417ppm U3O8 and 1.36% TREO. GGG is expecting to have its first JORC on this zone by the end of the March quarter 2012.
• Drilling at Zone 3 was also conducted during the quarter with a number of results expected in the next few weeks. Again management is expecting to release a JORC resource on this zone by the end of the March 2012 quarter.
• In June 2011, GGG announced it had established an effective means of beneficiating the Kvanefjeld ore to produce a high‐grade, low mass concentrate. This step has paved the way for a number of alternate development scenarios. Piloting of the beneficiation step was successfully conducted in September 2011, and the mineral concentrates produced provided the basis for hydro‐metallurgical leach studies. Detailed evaluation of the possible flow‐sheet scenarios is now underway taking into account project economics and sensitivities, market risk and technical risk. GGG is aiming to firm up the optimal process flow‐sheet for the project through Q1 2012.
• Agreement to buy-out the 39% equity partner [Westrip] in the project advanced with settlement by June 15th 2012. Pursuant to the buy-out agreement, GGG will pay the sum of A$39,000,000 in cash, 7,825,000 shares, and 5,000,000 options (ex $1.50) in a predetermined proportion to all shareholders of Westrip Holdings, the joint venture vehicle.
• In November 2011, GGG negotiated terms to acquire a 3% royalty on the net profits of GME A/S, the Greenlandic subsidiary company through which the Kvanefjeld project is owned. The acquisition of the 3% net profit royalty will be finalised when GGG completes the transaction with Westrip to move to 100% ownership of GME A/S, and thereby full ownership of the Kvanefjeld project. GMEL will issue 17,500,000 ordinary shares to acquire the royalty.

Project Location

Kvanefeld uranium, rare earth and speciality metals project

JORC Resources

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