Ionic Rare Earths Limited (ASX: IXR) has received strong results from the Definitive Feasibility Study (DFS) for the Stage 1 development of the Makuutu Rare Earths Project in Uganda.
The DFS has been conducted and signed off by a series of independent competent persons.
Highlights
• The Mining Licence Application (MLA) focuses on the Stage 1 DFS and provides for a 35-Year mine life based on the Indicated Mineral Resource over Retention Licence 1693;
• Stage 1 DFS delivers an EBITDA of A$2.29B (US$1.60B), Post Tax Free Cash Flow total ~ A$1.46B (US$1.02B), Net Present Value (NPV8) (Pre-tax) of A$580M (US$406M) and an Internal Rate of Return (IRR) of 32.7%;
• Stage 1 production of a value-added product, mixed rare earth carbonate (MREC) (including Scandium), via a modular heap desorption processing plant, amounts to a total Capital Expenditure (CAPEX) of US$120.8M;
• Stage 1 plant capacity is 5.0 million tonnes per annum (Mtpa) Run of Mine (ROM) throughput;
• Stage 1 TREO production of 40,090 tonnes (t) REO equivalent product, with 71% magnet plus heavy REO content;
• Stage 1 Rare Earth Oxide (REO) anticipated production capacity is ~ 1,300tpa REO over first 10 years, averaging ~1,160tpa over 35-years of production;
• Maiden Ore Reserve for the Makuutu Stage 1 over RL 1693 of 172.9Mt at 848ppm TREO, or 584ppm TREO – CeO2, and 30ppm Sc2O3;
• Uniquely positioned to be a long-term sustainable magnet and heavy REO producer, with first MREC production targeted for Q4 2024; and
• Further staged development and expansion options will consider the total mineral resource at Makuutu.
Much of the hydrometallurgical flowsheet for the Project has been developed by expert competent persons specifically for Makuutu, being a large near surface ionic adsorption clay deposit. This bespoke Intellectual Property (IP) will remain a valuable asset in optimizing financial returns from Makuutu as further activity, including a Demonstration Plant, progresses to unlock further value through providing scale up data to adopt more informed information on grade control, material handling and heap desorption conditions including heap stack height.
Makuutu is being developed by Rwenzori Rare Metals Limited (RRM), a Ugandan private company which owns 100% of the Makuutu Rare Earths Project. IonicRE is a 51% owner of RRM and moving to 60% with the completion of the DFS. IonicRE also maintains a first right over the remaining 40% of the Project.
Mining Licence over RL 1693, via Mining Licence Application (MLA) TN03834 which RRM initiated in September 2022, and as such covered only the central area of the greater Makuutu resource area. It is anticipated that following the DFS, the Mining Licence over RL 1693 will be granted in Q2 2023. A further staged development approach, including additional MLAs over the other five (5) tenements at Makuutu will progressively be considered which will cover the total Mineral Resource at Makuutu.
“The outcome of this study, which focuses solely on the central Makuutu zone, provides the required inputs for Rwenzori Rare Metals Limited to now finalize the Mining Licence Application for RL 1693,” IonicRE’s Managing Director, Tim Harrison, said.
“These Stage 1 results support what we think is a unique, geopolitically strategic asset to supply magnet and heavy rare earths into western supply chains. Evidence currently shows that countries are motivated to secure sustainable, traceable supplies of these critical raw materials to support their domestic manufacturing ambitions and to support both the energy transition, and increasingly, military and defence requirements to provide sovereign capability and global security.
“Furthermore, this Stage 1 study provides a path to production at Makuutu, which has the potential for significant growth into the future through the conversion of the other tenements at Makuutu towards additional MLAs over the coming decade. The intent is to significantly increase production from the Stage 1 initial focus at Makuutu, and expand into the forecast increase in demand that will far exceed supply for the most readily sought after rare earths, being Dysprosium and Terbium. These rare earths, are critical for the production of the magnets required to drive electric vehicles, offshore wind turbines and support a number of specialized defence applications.
“Makuutu is now advancing towards a Final Investment Decision with the capability to provide more heavy rare earths per annum from our initial Stage 1 Project than existing western light rare earth hard rock mines in production today.
“The next phase of work at Makuutu, is to build the Demonstration Plant to further drive value by proving the potential to achieve high desorption heap stack heights to improve capital efficiency with a view to further increasing production capacity, whilst optimizing desorption conditions to explore improved extractions and minimizing the dissolution of impurities, to further optimize economics.”
For further information please visit: https://ionicre.com.au/
