Australia-based Ionic Rare Earths (IonicRE) has unveiled the results of a Definitive Feasibility Study (DFS) for the Stage-1 development of the Makuutu rare earths project in Uganda.

According to the DFS, the company needs $120.8m in capital investment to support the project, which will be developed to have a five-million-tonne-per-annum capacity.

Makuutu is a large near-surface ionic adsorption clay deposit, being developed by Rwenzori Rare Metals (RRM), a company which fully owns the project.

IonicRE owns the project through a 51% stake in RRM, which increases to 60% with the completion of the DFS, and maintains a first right over the remaining 40% of the project.

IonicRE and RRM prepared the DFS report based on a review of project-specific information, including geological reports, maps, assessment files, retention and exploration licenses, technical papers, and spreadsheets over the past four years.

Makuutu Stage 1 study supports the company’s Mining Licence Application (MLA) seeking a licence covering RL 1693, submitted in September last year.

With the completion of DFS, the Mining Licence covering RL 1693 is expected to be granted in the second quarter of this year.

IonicRE managing director Tim Harrison said: “The outcome of this study, which focuses solely on the central Makuutu zone, provides the required inputs for Rwenzori Rare Metals Limited to now finalise the Mining Licence Application for RL 1693.

“These Stage 1 results support what we think is a unique, geopolitically strategic asset to supply magnet and heavy rare earths into western supply chains.

“Evidence currently shows that countries are motivated to secure sustainable, traceable supplies of these critical raw materials to support their domestic manufacturing ambitions and to support both the energy transition and increasingly, military and defence requirements to provide sovereign capability and global security.”

The DFS shows that the stage 1 project would produce a value-added product, mixed rare earth carbonate (MREC) totalling $120.8m, through a modular heap desorption processing plant.

The Stage 1 project will have the capacity to produce about 1,300tpa Rare Earth Oxide (REO) in the first 10 years, with an average of about 1,160tpa over 35 years of life-of-mine.

It will have a TREO production of 40,090 tonnes (t) REO equivalent product, with 71% magnet plus heavy REO content.

The study delivers an EBDTA of $2.29bn, with post-tax-free cash flow of about $1.46bn, a pre-tax net present value (NPV8) of $580m and an internal rate of return (IRR) of 32.7%.

The company intends to follow a further staged development approach, including additional MLAs over the other five tenements, covering the total mineral resource at Makuutu.