The initial Nechalacho rare earth project development in the Northwest Territories of Canada comprises the near-surface Tardiff and North T deposits that are being developed in two stages by Cheetah Resources, a wholly-owned subsidiary of Australia-based Vital Metals.

Originally, the Nechalacho rare earth property was entirely owned by Avalon Advanced Materials, which completed a feasibility study for the project in April 2013.

Canada-based Cheetah Resources acquired the ownership of the near-surface rare earth resources of Nechalacho for a total cash consideration of approximately £2.9m (C$5m) in October 2019, while Avalon Advanced Materials retained the ownership of the deeper Basal Zone resources.

Vital Metals completed the acquisition of Cheetah Resources becoming the owner and operator of the Nechalacho upper zone project in the same month. It also received necessary environmental and regulatory approvals to start mining operations at the site by May 2020.

Vital Metals finalised the key contracts as well the off-take agreement for the project in February 2021 and completed a £24m (A$43m) institutional placement to fund the development of the project in March 2021.

The project is expected to commence production from a North T starter pit in the second quarter of 2021, while the drilling operations at the larger Tardiff Zone were started for the stage two development of the project in February 2021. The company targets a total production of a minimum of 5,000 tonnes (t) of contained rare earth oxides (REO) from the project by 2025.

Location, geology, and mineralisation

The Nechalacho rare earth project is located on the Thor Lake property within the Mackenzie Mining District in the Northwest Territories of Canada.

It lies approximately 100km southeast of Yellowknife city and approximately 5km north of the Hearne Channel on the east side of the Great Slave Lake.

The Nechalacho rare earth deposit is held by the syenite intrusion that forms part of the Blatchford Lake Intrusive Complex.

The deposit is broadly categorised into three distinct mineralised zones, including the near-surface T Zone and North T Zone, and the deeper Basal Zone that lies below a depth of 150 metres above sea level (masl).

The upper mineralised zones contain high-grade, light rare earth resources enriched in neodymium-praseodymium (Nd-Pr).

The North T Zone which is being developed in stage one by Vital Metals is located approximately 2km north of the larger Nechalacho rare earth project previously proposed by Avalon Advanced Materials.

Near-surface rare earth reserves at Nechalacho

The Tardiff Zone is estimated to hold approximately 94.7 million tonnes (Mt) of measured, indicated, and inferred ore resources grading 1.46% total rare earth oxides (TREO), while the total ore resources at the T Zone are estimated to be 101,000t grading 9.01% TREO.

Mining and ore processing

The ore extraction at the North T and Tardiff zones will be carried out through the open-cast mining method. The extracted ore will be crushed, screened, and sorted out on site using the X-Ray transmission (XRT) technology for the separation of bastnaesite minerals from the quartz gangue.

In September 2020, Vital Metals and Saskatchewan Research Council (SRC) signed a binding term sheet to negotiate definitive agreements for the construction and operation of a rare earth extraction plant to produce a mixed rare earth carbonate product near SRC’s rare earth separation plant in Saskatoon, the first such facility in Canada, to convert mixed rare earth carbonate to commercial-grade, separated rare earth oxides.

Off-take agreement

In February 2021, Vital Metals entered into a definitive off-take agreement with REEtec, a Norwegian rare earths separation company, for the supply of mixed rare earth carbonate product containing an annual volume of 1,000t of REO over a period of five years

Both the companies have also the option to increase the annual off-take volume to 5,000t of REO over a period of ten years.

Contractors involved

The local company Det’on Cho Nahanni Construction was awarded the mining services contract for the North T Zone in February 2021. The scope of the contract also includes site clearing, preparation of retention pond, and the construction of site roads and the run of mine (ROM) pad, apart from mining, crushing, and screening.

Aurora Telecom Services was engaged in the construction of an ice road connecting the project site with Yellowknife for the mobilisation of plant and equipment, while TOMRA was contracted for the supply of a COM tertiary XRT sorting machine for the project in January 2020.

North Tech was engaged for drilling operations at the T-Zone, while Orelogy Consulting was appointed for the design of the North T open-pit.

Consultants involved in Avalon’s Nechalacho rare earth project

SNC-Lavalin (SLI) completed the feasibility study (FS) of the Nechalacho rare earth project Avalon Advanced Materials in 2013.

Tetra Tech supported the environmental assessment and review processes, as well as the feasibility study and regulatory permissions for the project.