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Greenland Minerals and Energy advances the Kvanefjeld project

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Greenland Minerals and Energy (ASX: GGG) capped off a busy March quarter gaining a new five year exploration license over northern Ilimaussaq Complex issued under Greenland’s new Mineral Resources Act, and endorsed by Greenland’s parliament.

In addition, GMEL ticked a milestone with the release of an interim report on the Kvanefjeld pre-feasibility study.

The report outlined a scope for a economically robust, largescale mining operation to produce a rare earth concentrate and uranium oxide.

Significantly, the company was able to develop a viable process flow-sheet to produce both an REO and a uranium oxide product, with potential for Kvanefjeld to supply >20% of global Rare Earth demand at low cost, given revenues from sale of other products.

Key outcomes of the study included:

- At a processing rate of 10.8 Mt pa, nominal forecast annual production is equivalent to 43,729 tonnes of Rare Earth Oxide (REO), and 3,895 tonnes of U3O8, with a mine life of >23 years.  At this level of production Kvanefjeld could potentially supply >20% of global rare earth demand as of 2015/2016.

- Unit cost estimates are $29.61 USD/lb U3O8 and $3.36 USD/kg REO (as a mixed rare earth carbonate).

- Financial evaluations outlined in the summary report indicate that:

- The project could repay the capital costs of a mining operation in just over 5 years including 2 years of construction, and;

- Over the life-of-mine the revenues from the sale of uranium oxide would cover the entire production scenario such that the cost of producing a mixed rare earth carbonate is negative.

This will enable GMEL to complete Definitive Feasibility Studies and related impact assessment studies required to apply for an exploitation license in Greenland.

In March, GMEL senior management met with government representatives and key stakeholder groups in Greenland to provide updates on the Kvanefjeld project status and discuss the future outlook.

Further meetings are currently being conducted with south Greenland communities and stakeholder groups.

GMEL has lodged two applications over areas of highly prospective geology, for Ni, Cu, PGE, Au, Nb, REE & Uranium minerals exploration projects in southeast Greenland.

Danish Geological Survey first pass grab samples taken from the carbonatites in the area have yielded ÓREE results up to 2500ppm.

2010 Work

In 2010 GMEL’s main focus is on advancing the Kvanefjeld project. The company will be conducting further metallurgical studies that could see enhancements to the process flow sheet.  In addition it is also aiming to initiate social and environmental impact assessment studies.

A two month field program has been planned that will include a 10,000m diamond drill program and
environmental baseline studies. Environmental baseline studies have been conducted for three years, and will continue during the 2010 summer.

The Company will continue to participate in community consultation meetings through the northern summer.

Metallurgical Studies

Further metallurgical test work is underway with a focus on beneficiation. A flotation circuit that concentrates RE minerals is included in the current flow sheet but comes subsequent to the carbonate pressure leach (CPL) circuit that extracts uranium. Economic evaluations of the current flow sheet indicate that any upgrade of the ore prior to the CPL circuit would significantly enhance the project, the company said today.

Currently there is a zero-tolerance toward uranium mining of any kind in Greenland. However, GMEL have been fully permitted in all their exploration activities at Kvanefjeld to date by the Bureau of Minerals and Petroleum.

GMEL retained $7.6 million of cash at end of the March 2010.

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Greenland Minerals and Energy Ltd Timeline

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