Australia-based Vital Metals (ASX: VML; US-OTCQB: VTMXF) says it is pivoting from completing the rare earths separation plant in Saskatoon to better align with its Norwegian offtake partner while the cost of the processing facility has doubled.
The cost of the Saskatoon plant has been estimated at "over $20 million" as recently as Vital's Sept. 20 press release. It now says the amount spent to date totals $18 million, and it expects the cost to complete the entire Saskatoon processing facility at $37 million, for a revised total cost of about $55 million for the complete project.
The company announced it will defer completing the facility's rare earth hydrometallurgical leaching, purification and rare earth precipitation circuits until 2024. It says the deferment will have the benefit of preserving up to $15.8 million in cash reserves while aligning the timing of the production of rare earth carbonate until Vital's offtake partner, REEtec, completes its plant in Norway to the second half of 2024.
In the interim, Vital will continue construction to complete the calcine circuit at Saskatoon by the third quarter of 2023, in time to process material from its Nechalacho mine and produce an intermediate rare earth oxide product. Nechalacho is the first rare earth mine in Canada.
Vital intends to sell the product to third parties before starting deliveries of the final rare earth carbonate product to REEtec.
Vital says it will sharpen its focus on completing the permitting process for the high-grade Tardiff deposit at the Nechalacho project in the Northwest Territories. The Nechalacho project is still only classified as a demonstration project by the Mackenzie Valley Land and Water Board and has not yet completed the permitting process.
Vital says it will fast-track an initial economic assessment by mid-2023 for Nechalacho, incorporating an impending initial resource. It will feed into a definitive feasibility study incorporating another updated resource estimate incorporating results from planned Q1 2023 and Q1 2024 drilling campaigns.
The Tardiff Zones of the Nechalacho deposit, located 110 kilometres southeast of Yellowknife, contain an inferred resource of 1.3 million tonnes at 2.2% total rare earth oxides at 0.3% neodymium sesquioxide.
The bastnaesite subzone of the North T Zone has an indicated resource of 33,000 tonnes at 7.8% light rare earth oxides for 2,574 tonnes of light rare earth oxides, according to the company. It calls it one of the world's highest-grade rare-earth projects.
The stock fell to a fresh 12-month low in Sydney on Friday morning at A1.7 ? per share on the news. The stock is down 63% over the past 12 months. The company has a market cap of A$95.5 million.