INDUSTRY BULLETIN: Vital Metals Signs Off-Take Agreement for Nechalacho Rare Earths Product
Australian rare earths developer Vital Metals Limited (Vital), has executed a term sheet for an off-take agreement with a Norwegian rare earths separation company, REEtec AS, for the production of rare earths from the T-Zone resource on the co-owned Nechalacho Property, Northwest Territories.
Avalon Advanced Materials Inc. and Vital (acting through their subsidiary Cheetah Resources Ltd.) entered into a formal co-ownership agreement for the Nechalacho Property at Thor Lake in February 2020. Under the agreement, Cheetah acquired ownership of the near-surface resources on the property (including the T-Zone) for $5 million while Avalon retained 100% ownership of the heavy rare earth-rich Basal Zone, which was the subject of Avalon’s 2013 Feasibility Study.
Avalon and Cheetah have since established a jointly-owned special purpose vehicle, NWT Rare Earths Ltd. (NWTREL), to hold and manage the permits and authorizations to operate on the property. Vital/Cheetah is now preparing to develop the T-Zone resource in 2021, where it intends to utilize low impact, sensor-based ore-sorting technology to produce a rare earths mineral concentrate. It is planned that this concentrate will be transported to a new facility in Saskatchewan for further processing to produce a mixed rare earth oxide (REO) precipitate, which will then be shipped to REEtec for final REO separation.
On December 21, 2020, Vital announced a binding term sheet signed with REEtec that sets out the terms for an off-take and profit-sharing that will provide REEtec an annual volume of 1,000 of REO (ex-cerium) over five years. Both parties have an option to increase this off-take volume up to 5,000 tonnes REO (ex-cerium) per annum over 10 years.
Commented Avalon President and CEO, Don Bubar, “We are delighted to see the progress Vital and Cheetah are making towards initiating a new rare earths supply chain in Canada. We look forward to working with the Vital/Cheetah team towards expanding production at Nechalacho, as demand for these critical materials continues to grow around the world.”
For questions or feedback, please email Avalon at ir@AvalonAM.com.
About Vital Metals Limited (ASX: VML)
Vital Metals is an Australian mineral development company with several highly prospective projects, focusing on the world-class rare earth Nechalacho Project in Canada. Vital Metals aims to become the lowest-cost producer of mixed rare earth oxide outside of China by developing one of the highest grade rare earth deposits in the world and the only rare earth project capable of beneficiation solely by sensor-based ore sorting. Vital’s other projects include the high-grade Wigu Hill rare earth resource in Tanzania.
About REEtec AS
REEtec is a Norwegian company that has developed a completely new and potentially game-changing process for the separation of high purity rare earth elements. The patent-pending technology has been proven through the successful operation of an industrial scale demonstration plant at the Herøya Industrial Park close to Porsgrunn, Norway. The process combines high efficiency and a competitive cost structure with best-in-class environmental friendliness. REEtec reutilizes virtually all consumables in the production process. The energy demand is very low, and electricity consumption is 100% based on hydro-electric sources. REEtec was founded by Scatec Innovation. Over a period of more than thirty years, Scatec Innovation has taken a leading role in the industrialization of several ground-breaking technologies in renewable energy and advanced materials. Scatec Innovation holds significant ownership positions in both private and public companies. For further information about Scatec Innovation visit www.scatec.no.