China Can’t Stop This Rare Earths Project

Defense Metals (TSX-V: DEFN)(OTC: DFMTF) — currently trading just above C$0.20 per share — has released positive assays from the first two holes of its ongoing drill program at the flagship, 100%-owned Wicheeda Rare Earth Element (REE) project in British Columbia, Canada.

China Can’t Stop This Rare Earths Project.

Highlights include:

  • Hole WI22-64: 1.78% total rare earth oxide (TREO) over 192 meters, including 3.13% TREO over 73 meters; one of the deepest holes drilled to-date at a downhold depth of 284 meters; assays for deepest 101 meters due in coming days 
  • Hole WI21-64: 1.39% TREO over 167 meters, including 2.29% TREO over 48 meters

Kristopher Raffle, P.Geo. and Director and QP of Defense Metals commented via press release: 

“We are pleased to have started receiving assays for our ongoing 2022 Wicheeda REE Deposit infill drilling campaign. These initial results compare very favorably to our PEA mineral resource cut-off of 0.5% TREO and continue to demonstrate continuity of mineralization over significant widths. We expect additional results in the coming days, weeks, and months ahead. With the 2022 drill campaign now 96% complete, we look forward to finishing a small number of remaining pit slope geotechnical and hydrogeological holes designed to inform any Preliminary Feasibility Studies.”

The phase-one infill and exploration drill program is being deployed primarily to upgrade the existing resource at Wicheeda, which currently stands at:

5,031,000 tonnes Indicated averaging 2.95% total rare earth oxide (TREO) and 29,467,000 tonnes Inferred averaging 1.83% TREO reported at a cut-off grade of 0.5% TREO contained within a Lerchs-Grossman optimized pit shell.

To-date, 15 of the planned 18 holes have been completed with additional assays due over the coming weeks and months. 

The Wicheeda project yielded a robust 2021 PEA demonstrating an after-tax net present value (NPV@8%) of $517 million and 18% IRR. 

A unique advantage of the Wicheeda REE project is the production of a saleable high-grade flotation-concentrate. The PEA contemplates a 1.8 Mtpa (million tonnes per annum) mill throughput open pit mining operation with 1.75:1 (waste:mill feed) strip ratio over a 19-year mine life producing an average of 25,423 tonnes REO annually.

A Phase 1 initial pit strip ratio of 0.63:1 (waste:mill feed) would yield rapid access to higher grade surface mineralization in year one and payback of $440 million initial capital within 5 years. 

In terms of mining address, having a resource-stage REE project in a stable tier-one jurisdiction such as British Columbia, Canada, is a key advantage that cannot be overstated.  

With drills turning now and additional assays forthcoming, now is an excellent time to be looking at Defense Metals, which has the potential to become a globally significant rare earth metals producer at a time when China controls the sector to the tune of about 85%.

Yours in profits,

Mike Fagan

Mike Fagan
Editor, Resource Stock Digest