Defense Metals (DEFN.V) saw an important piece of the rare earth processing puzzle fall into place when the government of Saskatchewan announced it will make C$31M in funding available for a REE processing facility to be owned and operated by the Saskatchewan Research Council. This could potentially be important for Defense Metals as the company’s current plan is to produce a mineral concentrate on its Wicheeda REE project in British Columbia. As a mineral concentrate only has a payability of 20-25 cents on the dollar, additional upgrades to said mineral concentrate will be necessary to improve the economics. According to the release of the government of Saskatchewan, the plant will take care of the second value-add step as it plans to have a pure REE end product (with a higher payable percentage). This will obviously still takes time, and Defense Metals will very likely keep a close eye on the developments in Saskatchewan as it would be pretty easy to just ship the mineral concentrate on a train from BC to Saskatchewan.

Defense also completed the final run of the summer metallurgical test program where 20 test runs have now been completed to process 26 tonnes that were taken as a representative sample from the Wicheeda deposit. The average grade of the end product had 51.6% Light Rare Earth Oxides while a recovery rate averaging 72.4% (but up to 81.5%) was observed. It was interesting to see the final batch of met work was focusing on using lower temperatures to recover as much of the REEs, a move that could potentially reduce the operating expenses for Defense Metals.

With the updated resource estimate (almost 5 million tonnes of rock in the indicated resource with an additional 12 million tonnes in the inferred resource category) and the metallurgical test work now completed, Defense Metals will now focus on a PEA.

Disclosure: The author has a long position in Defense Metals.

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