DFMTF - Rare Earths Co. Working With Leading Corp. Finance Firm | Benzinga
Source: Streetwise Reports 03/26/2024
Defense Metals Corp. announced it has appointed a leading London corporate finance advisory boutique to review the strategic financing of its wholly owned Wicheeda rare earth element (REE) project in British Columbia. One analyst says the company could become a major global producer of the critical elements.
Defense Metals Corp. (OTCQB: DFMTF) announced it has appointed a leading London corporate finance advisory boutique to review the strategic financing of its wholly owned Wicheeda rare earth element (REE) project in British Columbia.
HCF International Advisors Ltd., specializes in providing financial advisory services with a "primary focus on the metals and mining sector," the company said in a release.
HCF's review will help Defense will thoroughly analyze potential financing options and strategic partnerships for development and advancement of the project beyond the completion of its preliminary feasibility study (PFS), expected in Q2 2024.
The project "has the potential to be a globally significant producer" noted analyst Mark Reichman of Noble Capital Markets in an updated research note on March 20.
"We think the Wicheeda project benefits from significant advantages, including: 1) location, 2) favorable mineralogy, metallurgy, and grade, 3) the ability to produce a REE product as established by pilot plant operations, 4) a long mine life, and 5) social license and support of the McLeod Indian Band" Reichman wrote. "We think the project is well-positioned to serve the growing demand for rare earths sourced from North America."
China is responsible for two-thirds of current REE mine production and more than 85% of the refined output of REEs, which are needed for the transition to clean energy, a fact Western governments would like to change.
Noble rated the company Outperform with a CA$0.70 per share target price, a more than 200% increase over Monday morning's share price.
The Catalyst: A Possible Global Producer
HCF has given its expertise to international mining projects, in particular critical mineral projects in Canada and Africa, Defense noted. In particular, HCF advised Arafura Rare Earths Ltd. on the financing of its Nolans NdPr (neodymium-praseodymium) project in the Northern Territory of Australia.
Nolans will encompass a mine, processing plant, and related infrastructure. An important part of any final investment decision in the project, Arafura said on its website, was to finalize commercially binding sales agreements for a large portion of the offtake from the site.
It hopes to finish Nolans soon enough to "take full advantage of an anticipated mid-2020s supply shortfall in NdPr oxide."
"It is a globally significant and strategic NdPr project which, once developed, will become a major supplier of these critical minerals to the high-performance NdFeB permanent magnet market" the company said.
Defense's Wicheeda also has the potential to become a global producer of REEs, Reichman noted.
"The project has important advantages, including a mining-friendly location within North America, access to well-developed infrastructure and logistics, and a strong technical team" Reichman wrote. "While China remains the largest global supplier of rare earths, Wicheeda is well-positioned to take a leading role in the North American and Global REE supply chain. Once the project commences commercial production, it is expected to produce ~25,000 tonnes of rare earth oxide annually, or roughly 10% of current global production."
Noble rated the company Outperform with a CA$0.70 per share target price, a more than 200% increase over Monday morning's share price.
The company said it had drilled 58 core holes totaling more than 12,000 meters to define the deposit at Wicheeda and provide the metallurgical test samples.
This has led to measured and indicated resources of 34.2 million tonnes, averaging 2.02% TREO, including 17.8 million tonnes of high-grade dolomite carbonatite averaging 2.92% TREO, the company said. It also found 11.1 million tonnes, averaging 1.02% TREO inferred resources.
This represents a 260% increase over the Defense Metals initial 2019 mineral resource estimate and a conversion to (measured ...