Vital Metals became the first rare earth producer in Canada by starting ore production from the Nechalacho project in June 2021. Image courtesy of Vital Metals.
The Nechalacho rare earth project is located in the Northwest Territories of Canada. Image courtesy of Vital Metals.
Det’on Cho Nahanni Construction is the mining services contractor for the project. Image courtesy of Vital Metals.

Nechalacho is Canada’s first rare earth mining project that commenced production in June 2021. Located in the Northwest Territories of Canada, the project comprises the development of near-surface Tardiff and North T deposits that are being developed in two stages in the initial phase.

Cheetah Resources, a Canadian subsidiary of Australia-based Vital Metals, is developing the project.

Avalon Advanced Materials had owned the entire Nechalacho rare earth property and completed a feasibility study in April 2013. Cheetah Resources purchased the near-surface rare earth resources of Nechalacho for a cash consideration of £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 to become the owner and operator of the Nechalacho upper zone project in the same month. It also received the necessary environmental and regulatory approvals to start mining operations at the site by May 2020.

Vital Metals finalised the key contracts as well the offtake agreement for the project in February 2021 and completed a £24m (A$43m) ($33.2m) institutional placement to fund the project development in March 2021.

Rare earth production at Nechalacho

Production started from a North T starter pit at Nechalacho in June 2021 making Vital the first rare earth producer in Canada and the second in North America.

Vital produced approximately 28,000 tonnes (t) of rare earth ore from Nechalacho’s North T pit as of September 2021.

The drilling operations at the larger Tardiff Zone were also started for the stage two development of the project in February 2021. The company targets to produce at least 5,000t of rare earth oxides (REO) from the project by 2025.

Location, geology, and mineralisation

The Nechalacho rare earth project is located at Thor Lake within the Mackenzie Mining District, Northwest Territories, Canada.

It lies approximately 100km south-east of Yellowknife and 5km north of the Hearne Channel on the eastern 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 being developed in stage one is located approximately 2km north of the larger Nechalacho rare earth project previously proposed by Avalon.

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% of 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

Open-cast mining method involving conventional blast, load and haul operations is employed to extract ore from Nechalacho’s near-surface deposits. The extracted ore is crushed, screened, and sorted out onsite using the X-Ray transmission (XRT) technology to separate bastnaesite minerals from the quartz gangue.

Vital Metals will send the ore material to its rare earth extraction plant at Saskatoon, Canada, to produce a mixed rare earth carbonate product. Scheduled for commissioning by the end of 2021, the rare earth extraction plant is being built on a site adjacent to Canada’s first rare earth processing facility, which is being constructed by Saskatchewan Research Council (SRC).

The SRC rare earth processing facility comprising a monazite processing unit (MPU) and a solvent extraction unit (SXU) is expected to be operational in 2024. It will convert the mixed rare earth carbonate product supplied by Vital Metals into commercial-grade, separated rare earth oxides.

Offtake agreement

In February 2021, Vital Metals entered a definitive offtake agreement with REEtec, a Norwegian rare earths separation company, to annually supply mixed rare earth carbonate product containing 1,000t of REO over five years.

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

Contractors involved in Canada’s first rare earth project

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

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 to supply 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 by 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.