Published On: March 26th, 2024
Vital Metals Limited (ASX: VML) (Vital or the Company) is poised to make significant strides in the rare earth elements (REEs) market with its strategic focus on the Nechalacho Rare Earth Project in Northwest Territories, Canada. The Company has ambitious plans to develop the Tardiff deposit on Nechalacho REE Project, which shows a substantial scale and offering potential longevity in a future operation. With a measured and indicated mineral resource of 119.0 million tonnes at 1.4% Total Rare Earth Oxides (TREO), containing 1.67 million tonnes of TREO as of December 31st, 2022, Tardiff stands out as one of the largest and higher-grade rare earth elements deposits globally.
Figure 1: Geological Map of Nechalacho Layered Suite
Tardiff is a shallow, large rare earth deposit within the Nechalacho Layered igneous complex, which makes it attractive. Situated in the shallow parts of a layered magmatic body, it boasts high concentrations of Neodymium and Praseodymium, and importantly high ratios of NdPr:TREO (total rare earths) that are crucial elements for various applications in the transitioning global landscape toward technology-driven, low-emission solutions. This positioning aligns perfectly with the growing demand for rare earth metals in industries driving the shift towards renewable energy and electrification.
The Essential Role of Rare Earth Elements (REEs)
Rare Earth Elements (REEs) are indispensable in modern technologies, from electric vehicle motors to renewable energy solutions. Key REEs like neodymium and praseodymium are crucial in high-strength magnets and are vital for green energy technologies. REEs also play roles in catalytic converters, specialty glass, and telecommunications, highlighting their diverse applications.
There is a growing imbalance between supply and demand for rare earth elements.
China is a dominating player in REE supply. By 2025, predictions suggest that China will start importing more rare earths than it exports, and they’re already obtaining projects beyond their borders. Diversification of global supply points is essential to mitigate dominated supply risks. Vital Metals Limited has an opportunity to develop assets like the Nechalacho Rare Earth Project outside China. These projects aid international REE supply diversification and meet increasing demand as the world transitions towards a greener, technology-driven future.
Figure 2: Rare Earth Market Outlook
Neodymium-praseodymium oxide is crucial in crafting permanent magnets for electric vehicles (EVs) and offshore wind turbines. Neodymium demand is projected to increase by 48% by 2050.
Vital Metals Limited Projects Update:
Vital Metals holds one main REE project: the Nechalacho Project in Canada. This project positions the Company as a pivotal player in the global rare earth elements market, poised to meet the increasing demand for these Vital Metals in the evolving landscape of sustainable technologies.
Nechalacho Rare Earths Mine
Figure 3: Nechalacho Rare Earth Elements Project Location
Vital Metals are now focusing on maturing the Tardiff Deposit toward development. With a Measured & Indicated Mineral Resource of 119.0 million tonnes at 1.4% Total Rare Earth Oxides (TREO), Tardiff is among the higher grade rare earth deposits with a highly attractive NdPr:TREO ratio (~25%) compared to peers.
Figure 4: Tardiff Upper Zone Deposit – Mineral Resource Estimate at 1.0% Cut-off as of December 2022
Tardiff Shallow High-Grade Drilling Highlights Expansion Potential
The latest results from the 2023 drilling program at the Tardiff deposit reveal exciting expansion opportunities, particularly towards the west, east, and southern margins. With a comprehensive program comprising 74 drill holes totalling 6,664 meters, these findings underline the growth potential in the shallow, higher-grade areas of rare earth mineralisation within the altered syenite.
This recent batch of results, encompassing 10 drill holes, forms an integral part of the resource conversion program at Tardiff. Noteworthy intersections include 18.90 meters at 2.40% Total Rare Earth Oxides (TREO), emphasizing the presence of elevated grades within the deposit.
Figure 5: 2023 Drill Program With A Simplified Blachford Lake Complex Geological Underlay
Key highlights from the 2023 drilling program include significant intersections such as:
- 31.76 meters at 2.1% Total Rare Earth Oxides (TREO) from 34.24 meters
- 23.85 meters at 2.0% TREO from 9.15 meters
- 33.45 meters at 2.2% TREO from 47.00 meters
- 15.50 meters at 2.7% TREO from 30.50 meters
- 20.45 meters at 2.2% TREO from 6.25 meters
These results underscore Vital Metals’ portfolio’s substantial rare earth mineralization potential. As the company continues to refine its understanding of the scale and grade of its assets, targeted drilling initiatives remain pivotal in driving value creation and informing future development strategies.
As assay results from additional holes are expected within approximately three months, the focus shifts to the imminent Mineral Resource Estimate update slated for Q1 CY24. Drill results will be expected by June 2024 onwards, and the maiden economic study (Scoping Study) by December 2024.
Figure 6: Nechalacho Rare Earth Project – Upcoming Catalysts
Given NdPr’s substantial share in the rare earth market and its pivotal role in technologies like high-strength magnets, Vital’s focus on Tardiff is strategically aligned with market demand. This underscores the company’s position as a critical player in the rare earth sector, poised to capitalise on the evolving industry landscape.
Vital Metal’s Managing Director and CEO, Dr Geordie Mark, commented,
“These results support an evolving narrative around grade and continuity of shallow higher-grade zones across the 2023 drill pattern that remain open for future drill testing. Shallow higher-grade drill results across several areas of the 2023 drill pattern foster our aim to add in-ground value potential that could facilitate project de-risking by expanding areas of higher grade and conversion to higher confidence resource categories. Several areas of higher grade remain open for expansion – particularly along the northwest, where drilling has identified a target zone with a 300-metre-plus strike length – more drilling is warranted to examine the extent of mineralisation, with results incorporated into a resource update for use in our ongoing scoping study, due for release later this year.”
Exploring Regional Lithium Potential at Nechalacho
Despite its significant potential, historical lithium exploration at the Nechalacho Project has been limited. However, the recent focus on lithium-bearing pegmatites in the vicinity indicates promising prospects. The Nechalacho Project is strategically situated near numerous lithium-bearing pegmatites, which have become the target of current exploration efforts. These pegmatites, predominantly trending in an N-NE direction, offer an exciting avenue for lithium exploration and development.
Figure 7: Regional Scale Potential
Ongoing regional analysis aims to characterise these lithium-bearing pegmatites further, leveraging known occurrences of outcropping pegmatites across the Nechalacho Project area.
Moreover, Vital’s extensive landholding of over 5,000 hectares adjacent to recent regional pegmatite exploration and discoveries positions the company favourably to capitalise on emerging opportunities in the lithium market. With continued exploration and assessment, Nechalacho’s lithium potential could significantly contribute to the project’s overall resource portfolio.
Dr Geordie Mark: Leading Vital Metals as Managing Director & CEO
Figure 8: Managing Director and CEO of Vital Metals Limited Dr Geordie Mark
Dr Geordie Mark brings over 25 years of diverse global experience in the resources sector to his role as Managing Director & CEO of Vital Metals. With over 15 years as an industry-leading resources analyst based in Canada, Dr. Mark possesses extensive expertise across various commodities and at asset scale.
Dr. Mark’s background includes Canadian exploration and management experience. He served as Vice President of Exploration earlier in his career and has contributed to the field as a lecturer in Economic Geology at Monash University, Melbourne.
His academic achievements include completing a PhD at the National Key Centre in Economic Geology at James Cook University, which solidified his expertise and understanding of the geological complexities within the resources industry.
Dr Mark’s wealth of experience and comprehensive sector knowledge make him a valuable leader at Vital Metals, guiding the company towards continued success and growth in the ever-evolving resources landscape.
Investor Outlook: Vital Metals
- Strong Positioning: Vital Metals boasts a robust balance sheet anchored by a significant rare earth elements deposit and a renewed development strategy
- Flagship Asset – Tardiff Deposit on the Nechalacho Project area has the potential to become a cornerstone asset in the North American rare earth elements supply chain
- Development Initiatives: Vital Metals is conducting a maiden Scoping Study to assess Tardiff’s grade and scale, as well as detailed mineral characterisation, chemical deportment analysis, and metallurgical domain model studies.
- Future Growth Catalysts: The Company is well-positioned to leverage governments’ emphasis on reshaping supply chains and achieving clean energy while exploring lithium and other potential on the Nechalacho Project
- Market Outlook: With a compelling long-term outlook for the rare earth market driven by global decarbonisation efforts, Vital Metals presents an exciting investment opportunity for sustained growth and value creation.
- Stock Price: Vital Metals’ stock price currently stands at AUD 0.004, with a 52-week range from AUD 0.003 to AUD 0.022 as of March 12th, 2024
- Market Capitalisation: Vital Metals’ market capitalisation is currently valued at AUD 23.58 million, with 5,895 million shares in issue as of March 12th, 2024
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