The door is open to Indigenous groups to become part-owners of the Nechalacho rare earths deposit.
That's the word from Geoff Atkins, managing director of Australian-based Vital Metals, which made its final payment in October to complete a $5-million purchase of the upper portion of the Nechalacho rare earths deposit, 100 km southeast of Yellowknife.
“We're certainly open to those conversations and that's something that we have discussed,” Atkins said of a potential partnership.
Paul Gruner, president and CEO of Det'on Cho Corporation, the economic development arm of the Yellowknives Dene, said his organization is contemplating a stake in Nechalacho, but coming up with the capital for equity would be a hurdle to clear.
“It's great to have the opportunity but we've got to be able to pay for it and for some of this stuff we've got to look at pretty quick payback periods,” said Gruner, who added that the smaller scale of the operation would make it a good entry-point for an ownership position.
Atkins said Avalon's efforts to build a strong relationship with Indigenous groups was part of the appeal of the project.
“That's something that Don Bubar (president and CEO of Avalon) and his team really need to be congratulated on,” he said. “Our intent is we hope to be able to continue those relationships and build on them,” he said.
There are still many details for Vital Metals to hammer out, much of which will be contained in the finalized mine plan.
“We need to complete a bit more test work first. Once we have that test work completed we'll be able to finalize our timelines of when we'll be able to commence operations,” said Atkins.
Cheetah Resources, which was recently taken over by Vital Metals, had initiated negotiations and a purchase agreement with Avalon Advanced Materials, the longtime project owner that still retains rights to the remaining Nechalacho resource.
Vital Metals owns the high-grade rare earths to a depth of approximately 100 metres below the surface.
The historical resource at the site – measuring 160 million tonnes of ore with a rare earths grade of close to 1.5 per cent – is “certainly enough for us to define our project,” said Atkins.
The company's test work and engineering studies will also determine the tonnage rate, the design of the processing plant, the number of jobs and the life of the mining project.
Vital Metals is still lining up customers to buy the rare earths, which could be used in products such as computers, cellphones, televisions, rechargeable batteries and magnets found in wind turbines and hybrid cars.
“We have commenced discussions with potential customers but we have not signed any agreements,” Atkins said on Oct. 17.
One part of the research that Vital Metals is carrying out is to ensure a sorting method that requires no chemicals or re-agents, and water use would be limited to dust control, according to Atkins. It would eliminate the need for tailings dam.
“We believe the best way to get into production as quickly as possible is by simplifying an operation,” said Atkins.
The rare earths concentrate could be flown out but Atkins sounded keen on the possibility of using a barge to ship it to Yellowknife or Hay River.
“Because the site of the project is very close to (Great Slave Lake), it provides that option and the scale would work a lot better from our perspective,” he said. “Once again, that's obviously a discussion we need to have with the regulators to ensure that any risks are mitigated and we have the appropriate management plans in place to be able to do that.”
Avalon had already acquired regulatory permits for Nechalacho, but Vital Metals will need to amend the permits in accordance with the scope of its project.