Australia-listed American Rare Earths on Monday announced the results of a scoping study for its Halleck Creek project, in Wyoming, showcasing its potential to be a world-class rare earth element (REE) project.
The study has confirmed the saleability of the project, with an initial phase of three-million tonnes a year of mining creating a low capital cost for market entry and financing, with the capacity for future expansion highlighted by a six-million-tonne-a-year economic case.
The project previously evaluated mining cases of 15-, 10-, 7- and 5-million tonnes a year.
The Phase 1 mine plan will produce an average of 1.5-billion tonnes a year of neodymium and praseodymium (NdPr) oxide, 17-million tonnes of terbium oxide and 91-million tonnes a year of dysprosium oxide. Operating costs are estimated at $38.38/kg of NdPr oxide.
Phase 1 will require initial capital expenditure $456.1-million and yields an aftertax net present value, using an 8% discount, of $582.2-million and an internal rate of return (IRR) of 21%.
The study used a NdPr oxide price of $91/kg and American Rare Earths noted that at currently depressed spot prices of $54.6/kg, the project still provided a 12% IRR at a 10% discount factor.
CEO Donald Swartz commented that the work presented in the scoping study was a culmination of several years of hard work that highlighted the potential of Halleck Creek to be the next world-class REE project.
“The study has revealed a truly elegant solution, as its simplicity unlocks the potential to decouple Western supply chains from Chinese oligopolies. The favourable geology combined with conventional technology, low-operating expenses, and modest initial capital expenditures associated with an expedited path to production have converged to offer a project that is compelling – even when compared against the heavily subsidised Chinese State-owned entities.
“As the Western downstream industries for rare earths are being advanced from a nascent stage, we have right-sized the initial phase of development to produce a reasonable amount of separated rare earths, within a project area which is highly scalable over time. This is a project that could yield transparent pricing, provide reliable supply, and allow the US to reshore this industry,” he said.
The study also emphasised the project’s ability to separate rare earth products locally, enhancing revenue and reducing dependency on international processing.