Read Full Company Report 13 December 2011
Maiden JORC Resource for Zone 2 at Kvanefjeld complex.
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 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.
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.
|Buy||Expected to outperform the overall market|
|Hold||Expected to perform in line with the overall market|
|Sell||Expected to underperform the overall market|
|Not Rated||Shaw has issued a factual note on the company but does not have a recommendation|
|High||Higher risk than the overall market – investors should be aware this stock may be speculative|
|Medium||Risk broadly in line with the overall market|
|Low||Lower risk than the overall market.|
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