American Rare Earths Ltd (ARRNF)

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American Rare Earths’ Scoping Study confirms low-cost, scalable world-class REE project
American Rare Earths
Mon, Mar 18, 2024

DENVER, March 18, 2024 (GLOBE NEWSWIRE) -- American Rare Earths (ASX: ARR | OTCQX: ARRNF and AMRRY) (“ARR” or the “Company”) is pleased to announce the results of the “Halleck Creek Scoping Study Technical Report” (“Study”) compiled by Stantec Consulting Services Inc (Stantec - an independent engineering consulting firm). Located in the major mining hub of Wyoming, USA, the Halleck Creek project provides compelling economics and the ARR board has unanimously recommended the project advance to the next phase of development.

Highlights:

Under our base case 3Mtpa operating scenario, Scoping Study outlines NPV8 of US$673.9 and NPV10 of US$505.1m (pre-tax) at Halleck Creek, equating to an IRR of 22.5% and payback period of 2.9 years with total initial capex of US$456.1m (inc. US$76.0m contingency).


LOM average Cost (USD/kg NdPr Equivalent) = $38.38/kg, which is favorable when compared to the most recently reported US$50/kg cash cost of NdPr by China Northern Rare Earths1 – the world’s largest integrated producer. A full breakdown of operating costs by product is illustrated in the Project Metrics table below.


Low operating costs are attributable to favorable geology and mining economics, coupled with the beneficiation and concentration circuit (Density Separation and Wet High Intensity and Magnetic Separation (WHIMS), which provides a 10X upgrade in grade) along with good recovery/extraction via direct leaching, without the need for cracking. The recoveries are illustrated in the Project Metrics table below.


The Study is based on an initial phase of 3.0 Million tonnes per annum (Mtpa) of mining to create a low capital cost for market entry and financing. A 6 Mtpa economic case was also prepared to illustrate future potential.


The project had previously evaluated mining cases of 15, 10, 7 and 5 Mtpa before settling on this 3Mtpa mining case; making the project uniquely scalable over time, given the vast resource base (540 Mt total that were modeled in scoping exercise to identify grade for mine sequencing: 180 years at 3Mtpa and 90 years at 6Mtpa).


The Study was designed to include separation of individual rare earth products in Wyoming, avoiding sending a concentrate overseas and includes all capital costs to separate products (sorted by revenue % attributable). The products include the heavy rare earths Terbium and Dysprosium as separated products, contributing 30% of revenue:


66%: Neodymium (Nd)/Praseodymium (Pr) Oxide also referred to as “Didy”

16%: Dysprosium Oxide (Dy)

14%: Terbium Oxide (Tb)

2%: Samarium (Sm), Europium (Eu), Gadolinium (Gd) “SEG” concentrate

2% : Lanthanum (La) Carbonate

The mine plan averaged an in-situ grade of 3,805 ppm TREO, the entirety of the cash flow presented (20+ years) is limited to approximately 400 acres on Wyoming state lands, which provides a very compact footprint. The planned design allows future optionality and enhances project economics by accelerating permitting and leveraging established infrastructure in later stages.


Late in 2023 the US Treasury Department released a proposed rule for the Advanced Manufacturing Production Tax Credit, part of the Inflation Reduction Act (IRA), better known as 45X. This production tax credit, equal to 10 percent of the costs incurred by the producing taxpayer, seeks to incentivise the domestic production of, among other things, critical minerals, including rare earths. The Study has applied this 10 percent tax credit to costs incurred during the project’s production process, with certain exclusions as detailed in the full report.


A long-term price of US$91/kg of NdPr was used based on consensus estimates from leading investment banks along with those for Tb and Dy. Various sensitivity analyses are provided in this summary.


https://finance.yahoo.com/news/american-rare-earths-scoping-study-113200194.html