Defense Metals applauds the decision to build a REE processing plant in Saskatchewan

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 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. 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 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.