Defense Metals (DEFN.V), our go-to REE explorer and developer, is advancing its 1,708-hectare Wicheeda Rare Earth Element (REE) Project at a pace that should begin attracting a much wider audience.
Just the other day, on January 14, the company reminded us of its significant 2019 milestones. It also updated us on its plans for 2020—plans to push Wicheeda further along the development curve.
First, in the event you’ve just landed on our pale blue planet and are still scoping things out, REEs—often referred to as the ‘Vitamins of Chemistry’—are everywhere.
Exhibiting an extraordinary range of electronic, optical and magnetic properties, REEs are in the satellites orbiting our planet, the nuclear reactors animating our abodes, the electric vehicles (EVs) whipping past us in the Andretti lane… the palm of our hands when liaising with Chuck E. Cheese.
Speaking of EVs, we live a world that is making greater demands on clean, renewable, and zero-emission energy sources. The pace at which they’re rolling off the assembly line is accelerating.
UBS Report Indicates Rare Earth Demand For EV’s Would Rise 655% (In 100% Electric Mobility World)
There are concerns here in the West regarding supply, and it’s not exaggerated. China controls the lions share of the current global REE supply.
There’s no replacing REEs. Their properties are so unique—so unequaled—we’d be right-screwed if Xi Jinping were to suddenly slap a ban on exports.
China is well aware of the card it holds. Chinese state media has acknowledged as much in recent months referring to its domination of REE supply as “an ace in Beijing’s hand.”
In response to this looming threat, Canada and the U.S. are pushing to secure REE supply chains in their own back yards—it’s a matter of (tech) survival.
Canada and U.S. Finalize Joint Action Plan on Critical Minerals Collaboration
“The Action Plan will guide cooperation in areas such as industry engagement; efforts to secure critical minerals supply chains for strategic industries and defence; improving information sharing on mineral resources and potential; and cooperation in multilateral fora and with other countries. This Action Plan will promote joint initiatives, including research and development cooperation, supply chain modelling and increased support for industry.”
You don’t need to be clairvoyant see the potential here—Defense’s (current) resource of some 11,370,000 tonnes averaging 1.96% LREEs puts the company, and its shareholders’, in an enviable position.
But this current resource represents only a first pass estimate. An update, expected in Q1 of this year, could see Wicheeda’s REEs grow in both scale and grade.
Four things regarding the above map (great map guys):
- Note the long intercepts of mineralization in ALL 13 holes drilled in this recently concluded diamond drilling campaign.
- Note the grades along ALL 13 holes drilled.
- Consider that a 1% LREE grade is the value equivalent of roughly 2.5 grams per tonne gold (I thank Bob Moriarty for that bit of research and math).
- Note the deposit itself (the rubber ducky shape in grey) and the number of intercepts that tagged significant mineralization outside the main mineralized area (Wicheeda is open to the North, to the Southwest, to the East, and at depth).
Wicheeda appears destined to grow, perhaps significantly so.
The one aspect of exploration and development that can trump all others—just ask any seasoned CEO in this arena—is metallurgy.
Metallurgy is the science (some prefer the word ‘art’) of extracting valuable metals from their ores and modifying said metals for their intended use.
On October 23rd, Defense dropped news that should have prompted an arena wide standing oh.
The company was optimistically targeting a total rare earth oxide (TREO) metallurgical recovery rate of 80%, and a TREO high-grade concentrate of 40% from these tests.
These (final) numbers were impressive:
- a TREO metallurgical recovery rate of 85.7%;
- a 48.7% TREO high-grade concentrate of cerium, lanthanum neodymium, and praseodymium oxides (Ce2O3+La2O3+Nd2O3+ Pr2O3)
The 85.7% recovery rate exceeded expectations. Taking a 4.81% head grade and achieving a 10.1 times concentrate of 48.7% also exceeded expectations.
This was a huge milestone. It de-risked Wicheeda measurably… and the market gave it a yawn.
Wake-up market!
There is more work to be done on the metallurgy front, but these results place Wicheeda among the best REE deposits on the planet.
Ya hear that market?!
The 2019 review and strategy/goals for 2020
2019 Wicheeda REE Project Highlights:
- Collection of 30 Tonne Bulk-Sample – In late-2018, before the onset of winter, a 30-tonne bulk sample was sent to SGS Canada Inc. (SGS) in Lakefield, Ontario for metallurgical and processing test work.
- Positive Flotation Metallurgy – SGS flotation test work returned 48.7% LREO (light rare earth oxide) high-grade concentrate of cerium, lanthanum, neodymium, and praseodymium oxides, at 85.7% recovery in locked cycle tests, 10.1 times upgrading ration from head grade of 4.81% LREO, low 8.2% mass yield concentrate.
- Hydrometallurgical Studies Initiated – initial indications from SGS are that high REE extractions can be achieved through acid leaching and caustic conversion techniques. Impurity removal tests are positive.
- Successful Diamond Drilling Campaign – 13 core holes totaling 2,005 meters further delineated the main body of high-grade dolomite carbonatite and expended REE mineralization northward with deposit open to expansion. One of the highest grade REE intercepts to date within drill hole WI19-31 yielded 4.43% LREO over 83 meters; including 5.47% LREO over a drill core interval of 33 meters (true width is estimated to be 70-100%).
- Defense Metals has exceeded its Year 1 and Year 2 exploration spend commitments within 12 months of its option of the Wicheeda REE Project demonstrating its commitment to rapid advancement of this project.
Craig Taylor, President and CEO of Defense Metals:
“I am extremely pleased with our progress in 2019, and proud of each past and present member of the Defense Metals team. During the year, we remained focused on ensuring each step was strategic to provide a clear path to adding real value to the Wicheeda REE Project, which we believe is one of the highest quality North American REE assets. Defense Metals stands to benefit from upward REE demand pressures as the world moves toward widespread adoption of electric vehicles; in addition to being strategically positioned as a domestic North American REE source the importance of which is highlighted by the recent announcement of finalization of the Canada-US Joint Action Plan on Critical Minerals Collaboration, designed to advance our mutual interest in securing critical mineral supply chains. I would like to thank each of our shareholders for their support during 2018-19 and in addition to the dedication of our amazing team in British Columbia. We expect 2020 to be a watershed year of significant re-rating for Defense Metals, and an elevated presence amongst our peers.”
A quote from another key guy on the Defense Metals crew:
Kris Raffle, P.Geo., Director and Manager of Exploration:
“During 2019, Defense Metals metallurgical studies have shown the Wicheeda REE Deposit material exhibits exceptional flotation performance, and diamond drilling has further delineated and expanded the zone of high grade REE mineralization. Defense Metals will continue to de-risk and prove-out the value of the deposit during 2020. We see the potential to increase the size, and our confidence in, the Wicheeda REE Deposit mineral resource based on the strength of the 2019 diamond drill results; in addition to capturing additional up-side through incorporation of potentially economically significant praseodymium values, which were not assayed for historically.”
2020 promises to be a banner year for Defense Metals as it pushes the Wicheeda deposit further along the development curve.
On Deck for 2020:
- Completion of detailed Hydrometallurgical Test Work.
- Initiation of Flotation Pilot Plant Processing of 30-tonne bulk-sample to establish viability of bench test results during large-scale continuous operation.
- Update Wicheeda REE Project Mineral Resource Estimate.
- Diamond Drilling to further define newly discovery North Zone of Wicheeda REE Deposit.
- Baseline Environmental Study scoping and commencement.
- Initiate Economic Scoping Studies
The metallurgical test work is key. The smart money in the market will be watching developments on this front closely.
Pure speculation on my part, but the upcoming drilling campaign—a program that will test Wicheeda for extensions to the North and at depth—will be a big one. My guess is twice the meters as the 2019 campaign.
Final thought
At the top of the page, we pondered the possibility of Defense attracting a wider audience. All things considered geologically and geopolitically, it most certainly should.
It should also attract a new audience, one that understands the tech side—the strategic significance and value of a high-grade REE deposit in our own backyard. That could be a whole new set of eyes (and pockets).
END
Greg Nolan
Full disclosure: Defense Metals is an Equity Guru marketing client.
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