Tasman Metals (CVE:TSM) (AMEX:TAS) said Wednesday that it has submitted its application for a mining lease for its heavy rare earth and zirconium Norra Karr project in Sweden, achieving a major step on the path toward development.
junior rare earths explorer has indeed come a long way since starting
the first drilling program at the property in December 2009. Shares rose
more than 3.3 per cent this morning, to $1.55.
released in March a positive preliminary economic assessment for Norra
Karr, detailing a project that boasts a pre-tax net present value in
excess of $1.46 billion at a 10 per cent discount rate, and an almost 50
per cent internal rate of return, with a payback period of 3 years from
the start of construction.
All these numbers are generated
using a conservative price basket of US$51 per kilogram - versus the
current China FOB basket price of US$184.85. Increasing the basket price
by 30 percent to US$66.30 per kilogram, the net present value of the
project jumps to $2.06 billion using a 10 percent discount rate, with an
IRR of 63.4 percent.
VP of corporate development for Tasman, Jim
Powell, says "a lot of work" behind the scenes went into the mining
lease application, spanning around 18 months, including "extensive"
environmental due diligence, social impact studies and community
The filing of the application also required that
Tasman complete flora and fauna surveys, ground water testing, leach
testing of the waste rock - which Powell says is benign with no harmful
elements - and basic infrastructure planning for the Norra Karr site.
The mining lease, under the Swedish Mining Act, will be valid for 25 years, at which point it can be renewed.
says the mining lease application will take about six months to process
to completion, and is a major step prior to attaining the actual
extraction permit, which is expected in late 2014.
of this project in Sweden, with a simple and well tested Mining Act,
easy all year round operating conditions and excellent existing
infrastructure has allowed progress to be made at a fast pace," said
Tasman's president and CEO, Mark Saxon, in a statement Wednesday.
Norra Karr is one of the largest and most economical projects among its
peers, due to the high contribution of the high value rare earth
elements like dysprosium (Dy), yttrium (Y), neodymium (Nd), and terbium
Demand for dysprosium is expected to soar over the next
decade from both the traditional automotive and emerging electric car
and wind turbine industries. Supply of the metal, which is a key
contributor to high temperature magnets, has become tight over the past
year, with prices increasing more than 600 percent since January 2011.
low radioactivity asset, with "trace levels of uranium and thorium", is
located in southern Sweden, 300 kilometres southwest of the capital
Stockholm and lies in mixed farming and forestry land. The site is well
serviced by power, roads, local skilled personnel, and water, allowing
all year round access and minimizing the need for offsite
infrastructure, Saxon says, with the CEO taking note of the "mining
friendly" region and low mining costs.
Since over 95 percent of
rare earth element supply is sourced from China, the European Union is
supporting policy to ensure the domestic supply of the metals.
total capital cost estimate for the project is a relatively low $290
million over a one and a half year construction period, with the
property also boasting simple mineralogy that "allows for ambient
temperature and pressure processing", the company noted in a statement.
magnetic separation and flotation tests yielded rare earth element
recovery rates of 86.6 per cent into 37.6 per cent of the mineral mass,
and 84.1 per cent into 26.5 per cent of the mineral mass.
Karr is the only NI 43-101 compliant rare earth element resource in
mainland Europe. The PEA was based on an open pittable recoverable
resource of 58.1 million tonnes grading 0.59% TREO (total rare earth
oxide) where 50.0 per cent of the TREO is the high value heavy rare
earth oxide (HREO) and 1.70% ZrO2 (zirconium oxide) in the inferred and
The report assumes a mining rate of 1.5
million tonnes per year with average TREO recoveries of 80 per cent and
average zirconium recovery of 60 per cent.
Average annual mixed
TREO concentrate production is forecast to be 6,800 tonnes including 290
tonnes of dysprosium oxide, 43 tonnes of terbium oxide, 773 tonnes of
neodymium oxide and 2,360
tonnes of yttrium oxide.
application documents for the mining lease were prepared by consulting
group Golder Associates AB and have been submitted to the Swedish Mining
The Scandinavian-focused miner also has the
Olserum project, which it acquired last October and is located 100
kilometres east of Norra Karr.
Last month, the rare earth
explorer acquired three new rare earth element exploration properties in
central Finland. The Korsnas South, Siilinjarvi and Laivajoki projects
are being acquired from private Finnish company Magnus Minerals Oy.