Defense’s Wicheeda REE project one step closer to production

25th November 2021 By: Mariaan Webb - Creamer Media Deputy Editor Online

Minerals explorer Defense Metals on Wednesday announced a positive preliminary economic assessment (PEA) for the Wicheeda rare earth element (REE) project, in British Columbia.

The company reported an aftertax net present value of C$512-million and an internal rate of return of 16% for Wicheeda, which is located near Prince George.

The study contemplates a 1.8-million-tonne-a-year mill throughput openpit mining operation with a 19-year mine life, including three years of construction and early revenue generation through a phased openpit development.

The Wicheeda mine will produce an average of 25 423 t/y of rare earth oxide.

The PEA estimates that C$461-million of initial capital expenditure (capex) will be required and puts a $474-million price tag on expansion capex under a cash-funded scenario.

The initial capital payback is five years from start of production and it assumes partial self-funding of the hydrometallurgical plant from concentrate sales.

Defense director Luisa Moreno pointed out that the project had three main aspects for a successful rare earth project: favourable mineralogy dominated by coarse grained bastnasite family minerals, metallurgical process that yielded high grade flotation concentrate and great infrastructure in a friendly jurisdiction.

“With the positive PEA, the project is undoubtedly a step closer to production,” said Moreno.

While Defense was upbeat about its PEA results, the market does not appear to have been as excited. The company’s stock fell 15% on Wednesday to C$0.26 a share.