Greenland Minerals and Energy: Greenland Government uranium decision "momentous" for Kvanefeld

Greenland Minerals and Energy (ASX: GGG) is poised to benefit from the Government of Greenland amending the terms of the company’s exploration license that covers the world class Kvanefjeld multi-element project, such that it is now inclusive of uranium.

Highlighting the potential of Kvanefjeld, the project hosts the largest occurrence of rare earths (6.6 million tonnes total rare earth oxides (TREO)) as defined by internationally recognised standards, 350 million pounds uranium and 3 billion pounds of zinc.

Under the licensing framework in Greenland, the licensee maintains the right to apply for an exploitation (mining) license for all exploitable elements listed on the exploration license.

Importantly the exploration license (2010/02) now includes radioactive materials, providing the company with the clear right to apply for the exploitation of radioactive elements along with all other exploitable elements - which brings the potential production of heavy rare earths into play.

The granting of the exploitation license will be dependent on establishing an environmentally and socially sustainable development scenario that is economically robust.

Roderick McIllree, managing director of Greenland Minerals, commented on the good news and said:

"The company expects in the first few months of next year to announce its final flow sheet that will almost certainly see Kvanefjeld optimised on heavy rare earth production, underpinned by an economic keel of uranium production."

The company also anticipates it will stockpile, in easily accessible form, the light rare earths (‘LREO’) in a way that has little to no economic consequence to the company, thereby removing the “market risk” of being required to sell the light rare earths at a time the company expects they will be in oversupply.

McIllree added, "This development scenario is a paradigm shift in the way Rare Earth projects will move forward in the future and one which the company is confident the market will recognise as the only sustainable mechanism to produce REO’s long term.”


Greenland Government support and development scenarios

McIllree went on to say that this landmark decision by the nd Government demonstrates continued support for the project.

"The significance of this event is that it now allows the company to move into alignment with a strategic partner. The company currently has CA’s signed with four consortiums regarding development scenarios.

“All stakeholders recognise the economic and strategic importance of Kvanefjeld and associated satellite ore bodies.

"The inclusion of uranium onto the company’s license allows the company to now work within the existing framework of assessment as defined by Greenland and demonstrates a willingness by all parties to work together to realise what is a generational opportunity.”


Exploitation of Kvanefjeld timeline

The amendment comes around one year after the Government of Greenland issued Greenland Minerals with an evaluation permit to allow for comprehensive feasibility studies to be conducted on a mineral deposit that includes uranium.

Through the first half of 2011, the company conducted extensive stakeholder engagement to establish the terms-of-reference for environmental and social impact assessments.

These terms were approved by the government in July, and both the EIA and SIA are progressing on schedule, with the Greenland Minerals saying that it is extremely pleased with this critical development and expects to lodge an application for the exploitation of Kvanefjeld at the end of 2012.


Greenland Minerals moving to 100% of Kvanefjeld

In August this year in a transformative move, Greenland Minerals completed a pivotal agreement with Westrip Holdings (and Rimbal Pty Ltd) to acquire the outstanding 39% of the exploration license 2010/02 over the northern Ilimaussaq Complex in Greenland.


History

Since acquiring the license in 2007 the company implemented a systematic and intensive exploration program which included among other things an additional 50,000 metres of diamond core.

This work has led to the recognition that firstly mineralisation at Kvanefjeld is polymetallic in nature, being strongly enriched in rare earth elements and Zinc, and secondly, that mineralisation is far more prolific than had been previously documented and is now measure in terms of square kilometres.

As a key aspect of Greenland Minerals ongoing corporate development, the executive management recognised the strategic importance of securing 100% ownership of the Kvanefjeld project, at a time and manner that is value accretive for the company’s shareholders. With this aim firmly in place, the board is confident that the terms of the settlement, outlined below, clearly serve to fulfill this agenda.

McIllree told Proactive Investors at the time, "the acquisition (of the minority interest) has come at right time, a huge value add, for a company now worth $200 million and is buying the other 39%."  He said the (deal) from this point allows Greenland Minerals to look truly forward for the first time, moving on from the past.

McIllree also said the company was engaged with multiple parties regarding finance from project to equity and has 5 months within which to complete the financing of this acquisition." 

"The only condition precedent to this being completed is just the financing...it is such a big value add...focusing on the least dilutive method to shareholders."

Originally published at: http://www.proactiveinvestors.com.au/companies/news/22973/greenland-minerals-and-energy-greenland-government-uranium-decision-momentous-for-kvanefeld--22973.html