Today, Greenland Minerals Ltd [ASX:GGG] gave an update on its capital cost estimate for its 100% owned Kvanefjeld project, located 35km from Narsarsuaq in Southern Greenland.
At time of writing, Greenland Minerals’ share price is sitting at 15 cents, up 7.14%.
Greenland Minerals’ Kvanefjeld project is the largest code-compliant rare earth resource in the world.
Greenland Minerals’ reduction in capital cost
The projects capital cost estimate was slashed by 40% from US$832 million in April 2016 to US$505 million.
This was on account of optimisation studies taken across the project from flowsheets and civil construction. Investors interested in seeing these optimisation study results can check them individually through Greenland’s market updates, all the way back to 2016.
Greenland’s Managing Director, John Mair, spoke on the company’s overall optimisation program:
‘With the completion of an outstanding optimisation program, we have a project with a smaller footprint producing more rare earths at lower operating costs, which requires significantly less capital for development.
‘The 40% reduction in the capital cost estimate together with the increased projected output over an initial 37-year mine life results in the lowest capital intensity amongst our peers.
‘The optimised capital cost, when considered with operating costs after credits of below US$4/kg of rare earth oxide, creates a highly robust project and compelling development opportunity; a strong result for both Company shareholders and project stakeholders.’
Greenland Minerals’ share price outlook
Since 2016, Greenland Minerals have been working towards improvements to its business, including improvements to its flowsheet.
The company underwent key enhancement to its flotation performance resulting in smaller volumes of higher grade concentrate of the rare earth resource.
Such developments have decreased the ‘scale of the refinery circuit resulting in substantial cost reductions.’
As stated in today’s announcement, civil construction costs were a large source of overall capital cost, but its reduction was achieved through lower civil earth works in site preparation, updates to port design from specialist groups, as well as boosted use of local materials.
So it seems that Greenland Minerals is a company that has a lot to offer, showing investors that it is willing to get production effort right.
Of course, you should continue with your own research. To help, we’ve given an in-depth look at the commodities of the future. Read more about the ‘Five key things to look for in a solid rare earth miner before you consider investing’ for free now.
More to come.
For Money Morning