Greenland Minerals and Energy Ltd took control of the Kvanefjeld rare earth, uranium and zinc deposit in Greenland. As it obtained full ownership of the resource the company saw its shares rise 20%.
In a company statement it said that 100 per cent ownership will place Greenland Minerals and Energy Ltd in a strong position to engage potential strategic partners looking to gain access to the extensive resource base and facilitate its development.
The company has agreed to a deal to acquire the 39% stake in the exploration license that was held by its joint venture partner Westrip Holdings. They will pay $39 million in cash and shares in Greenland Minerals to acquire the 100% ownership of the Kvanefjeld resource from the estranged London based partner.
As per the company an estimated cost of $US2.31 billion will be needed to develop the rare earths mine at Kvanefjeld. They will need to raise funds, possibly via the issue of equity in the company. The end of hostilities with its joint venture partner will also free up time and money for Greenland Minerals. Mineral resources at Kvanefjeld now stand at 619 million tonnes, and three new deposits have recently been discovered in the broader project area. An interim Pre-Feasibility Study on the Kvanefjeld Project, completed in December 2009 evaluated an operation with nominal forecast production of 43,700 tonnes total REO, and 3,895 tonnes of U3O8 per year based on Indicated resources, and provide a Net Present Value of US$218 billion and a free cash flow of US$8.9 billion over a 23-year mining period, if developed.
Rod McIllree, Managing Director, said that over the last five years they had worked carefully to fully understand the genetic makeup of this deposit and had come to realise that unique doesn't mean difficult, it just means different.
The primary mining is to be for rare earths at the Kvanefjeld mine as the Greenland government is opposed to uranium mining. The company can still take the feasibility study forward so as to assess the environmental and social impacts of mining at Kvanefjeld.
With Kvanefjeld now completely owned by GGG the components for the completion of a successful bankable feasibility study will be aggressively pursued so we can develop a major global production source for industries needing to utilize the special properties of rare earths said Mr Rod Mclllree.