Norra Kärr REE Project
Leading Edge Materials is the 100% owner of the Norra Kärr rare earth element (REE) deposit. The deposit was discovered in 2009 by Tasman Metals Ltd and progressed to Pre-Feasibility Study (“PFS”) stage by 2015.
Norra Kärr is one of the world’s principal heavy REE resources, with an unusual enrichment in the most critical REEs that are essential for high strength permanent magnets (dysprosium (Dy), terbium (Tb), neodymium (Nd) and praseodymium (Pr). Located in southern Sweden approximately 300km SW of Stockholm, Norra Kärr is the only heavy REE deposit of note within the European Union (see ERECON project, 2015) and provides the EU with the long-term capacity to reduce reliance on imported REE. Development of Norra Kärr will reduce the need for European industry to import REEs from China that are produced under environmentally & socially unsustainable conditions.
In addition to REEs, Norra Kärr has the capacity to be a major supplier of hafnium (Hf) for super alloys, zirconium (Zr) for chemical resistive materials and the industrial mineral nepheline.
Norra Kärr is surrounded by a network of transport infrastructure, services, electricity, and skilled labour. The extensive existing infrastructure in the Norra Kärr region, along with the proximity of a skilled workforce, means REE production can be done with the lowest possible impact on the environment and with a low carbon footprint. Due to the high grades of heavy REEs, an annual mining rate of less than 1% of Sweden’s largest operating mine can provide a material and positive impact on REE security within Europe.
The Norra Kärr project is held by Leading Edge Materials’ Swedish subsidiary Tasman Metals AB. The project was initially claimed via exploration licence “Norra Kärr No.1” valid for three years, first granted 31st August 2009. This exploration licence has been renewed on two prior occasions, and a request for a further five year extension was submitted to the Swedish Mining Inspectorate (‘Bergsstaten”) during August 2019. The extension was granted in June 2020 with the permit being valid until August 2024. In July 2020 the permit was further extended to August 2025 due to the introduction of new legislation to minimize impact of COVID-19. The granting of the extension has subsequently been appealed, however the permit is valid until a final decision is taken regarding the application (see www.sgu.se/en/mining-inspectorate/legislation/minerals-act-199145/ for further information).
A 25-year Mining Lease (exploitation concession) was granted to Tasman Metals AB covering Norra Kärr in 2013 following submission of substantial application documents. Both relevant permitting authorities (Bergsstaten and Länsstyrelsen) approved the granting of the Norra Kärr Mining Lease.
In 2016, following an appeal to the Supreme Administrative Court in Sweden regarding the decision-making process of the Bergsstaten under the Minerals Act, the Norra Kärr Mining Lease reverted from a Granted to Application status. The Bergsstaten has requested further information from the Company, which is now being collated and submitted. This information includes a Natura2000 assessment regarding the potential future impact of a mine on Natura2000 sites in the region. Natura2000 areas do not exist on the Mining Lease Application area.
For the period that the Norra Kärr Mining Lease is being assessed by the Bergsstaten, exploration licence Norra Kärr No.1 remains valid (see www.sgu.se/en/mining-inspectorate/legislation/minerals-act-199145/ for further information).
Geology and Mineralogy
Norra Kärr is a peralkaline (agpaitic) nepheline-syenite intrusive complex. The intrusion has been dated at 1,489 ± 8Ma, and intrudes older gneiss and granite of the Trans-Scandinavian Igneous Belt (dated at 1.81 – 1.76Ga) along a long-lived north trending regional fault. The intrusion covers an area some 450m x 1,500m in size, beginning below a thin soil cover and exceeding depth of drilling at 350m.
The Norra Kärr intrusion is enriched in zirconium (Zr), heavy REEs, yttrium (Y), niobium (Nb) and hafnium (Hf) resulting in the presence of minerals that are uncommon on a global scale. Mineralogical studies show nearly all of the REE in Norra Kärr is found within the mineral eudialyte, with only trace britholite and mosandrite. Eudialyte at Norra Kärr is relatively rich in REEs compared to most other similar deposits globally, and also contains a very high proportion of the highest value heavy REEs. REE grade, mineral grain size and heavy REE/total REE% varies only slightly across the deposit in a concentric manner.
For a detailed description of the Norra Kärr project, see “Geology, mineralogy, and metallurgical processing of the Norra Kärr heavy REE deposit, Sweden” published November 2015.
Large and Long Lived Resource
The Norra Kärr deposit is one of the world’s largest heavy REE resources, with the capacity to supply all of Europe’s heavy REE requirements for more than 20 years. Under a PFS published January 2015, the Mineral Resource has been optimized to allow production of 5,000 tonnes per year of separated REO (rare earth oxide) over a mine life constrained to 20 years. This production rate was chosen due to the globally significant output of dysprosium (approximately 15% of current demand), yttrium and terbium from Norra Kärr under this scenario. See tables 1 and 2 for Mineral Resource and Reserve estimates, and table 3 for REE distribution.
The Norra Kärr deposit has an unusually high percentage of the heavy and critical rare earths in its REE distribution, with a heavy REE/total REE ratio of 53%. This high % means capital and operating expenditure is directed toward high value critical metals (Dy, Tb, Y, Nd, Lu) not the over-supplied markets of Ce and La. Norra Kärr has the highest HREE ratio of all large REE deposits.
Simple Metallurgical Flowsheet with High Recovery
Extensive metallurgical testwork has been completed on representative samples from Norra Kärr. Mineralogy has shown that the only REE-bearing mineral with significant abundance at Norra Kärr is the zirconosilicate eudialyte. Eudialyte is weakly magnetic (paramagnetic) and dissolves rapidly in weak acid at low temperature. As a result, an uncomplicated flow sheet (see Figure 1) has been developed that can be achieved with standard mining/processing equipment and widely available chemicals.
Under the process model envisaged by the 2015 PFS, ore is processed via a simple flowsheet, comprising crushing, grinding, magnetic separation, sulphuric acid leaching and precipitation of a purified mixed REE-oxalate which is calcined to form a mixed REO product.
Eudialyte beneficiates efficiently using Metso’s HGMS magnetic separation equipment, providing a clean and high recovery eudialyte-rich mineral concentrate. Beneficiation recovery higher than 90% is now anticipated and targeted. The non-magnetic fraction is a high purity nepheline and feldspar concentrate, for which markets are now being considered.
Subsequent to publication of the PFS in 2015, additional process research was completed under the European Commission funded EURARE project. This identified substantial process improvements with a flowsheet referred to as “dry digestion” and produced 25kg of REE-carbonate from Norra Kärr feed.
For a review of recent developments in the processing of eudialyte, see “Leaching of Eudialyte—The Silicic Acid Challenge” published January 2020.
Pre-Feasibility Study January 2015: Leveraged to the Magnet Industry
In March 2015, Tasman published a comprehensive PFS for the Norra Kärr project. The project stands out as one of few advanced heavy REE projects globally, and the only one that can produce more than 200 tonnes per year of dysprosium oxide for more than 20 years with a capital investment of less than US$400 million.
PFS conclusions are supported by very extensive drilling, sampling, process testwork and REE consumer discussions. The PFS is a complete study, addressing in addition to mining and processing, all required on site and off site infrastructure, land access, reagent and fuel transport and storage, power access, water recycling and purification, waste rock and tailings storage, and final closure.
Engineering work focused on applying the lowest risk process solutions using commercially available technology. Project design aimed at maximising local employment opportunities in the region.
The PFS and economic assessment is based on conventional open pit mining at an average annual rate of 1.18 million tonnes and a grade of 0.59% total REO, constrained to provide for a 20-year mine life. Ore is processed via a simple flowsheet, comprising crushing, grinding, magnetic separation, sulphuric acid leaching and precipitation of a purified mixed REE-oxalate which is calcined to form a mixed rare earth oxide product. An average annual REO output of 5,120 tonnes is forecast, reflecting the recommendations of a market study for the most critical REE’s. The PFS model provides for REE separation to individual saleable oxides by an external partner on a commercial basis. Such REE separation facilities operate within Europe today.
Based on assumed prices, 23% by volume and 74% by value of the REE output shall be supplied to the permanent magnet industry. Dysprosium, which is consumed in high temperature magnets in the automotive, wind energy and engineering sectors is the largest revenue contributor at 42%.
The Norra Kärr project has the lowest construction capital requirements among its peers of large/long mine-life heavy REE projects, due to the projects unique ability to leverage existing infrastructure (road, rail and power), and the presence of a nearby supplier of sulphuric acid. Assuming a 10% discount rate, the after-tax NPV is US$313 million. The after-tax IRR is 20% with a 4.9 year payback period.
Summary: An REE Industry Leader
Leading Edge Materials presents a clear, industrially relevant and low risk business model to be a leader in the expanding western REE industry. The flagship Norra Kärr deposit will be a major producer of the most critical REEs, and is the only project that can produce more than 200tpa of Dy oxide for more than 20 years with low start-up capital expenditure. With European customers on the doorstep, and daily driving access to the deepest and most intact REE industry outside of China, Leading Edge Materials has the capacity to be a long term, secure and sustainable REE supplier with a very low environmental, carbon and social footprint.
NI 43-101 Compliance
A technical report supporting the PFS is available in its entirety, on the SEDAR website at www.sedar.com. The PFS was prepared by GBM under the guidance of Michael Short, Principal Consultant for GBM who is a “Qualified Person” in accordance with NI 43-101.
The Mineral Resource and Mineral Reserve estimates were completed by Wardell Armstrong International Limited under the supervision of Greg Moseley and Mark Mounde, who are both “Qualified Persons” in accordance with NI 43-101. The process for the integrated processing plant for the PFS was completed by GBM under the supervision of Thomas Apelt who is a “Qualified Person” in accordance with NI 43-101. The infrastructure design and cost estimation for the PFS was completed by GBM under the supervision of Michael Short who is a “Qualified Person” in accordance with NI 43-101. The environmental and social section and the permitting review for the PFS was completed by Golder Associate Oy under the supervision of Gareth Digges La Touche who is a “Qualified Person” in accordance with NI 43-101.