Japan Oil, Gas, and Metals National Corporation (JOGMEC) has paid US$1,25 million to acquire a 40% interest in the Lofdal Rare Earth project, which Namibia Critical Metals is a partner in.
Namibia Critical Metals owns a 95% interest in the Lofdal project, with the remaining 5% held for the benefit of historically disadvantaged Namibians by Philco One Hundred Ninety-Six (Pty) Ltd.
The Lofdal project is one of the world’s richest dysprosium and terbium deposits outside of China.
The company’s 2022 updated prefeasibility study shows a post-tax NPV of US$391 million, an annual IRR of 28%, and a capital expenditure of US$207 million.
The project is projected to generate a life of my nominal cash flow of US$698 million post-tax over a 16-year mine life.
In 2020, Namibia Critical Metals entered a transformational transaction with the Japan Organization for Metals and Energy Security (JOGMEC) to secure the supply of natural resources for Japanese industry.
The terms of the joint venture agreement with the company stipulate that JOGMEC provides C$3,000,000 in Term 1 and C$7,000,000 in Term 2 to earn a 40% interest in the Lofdal project.
Term 3 calls for a further C$10,000,000 of expenditures to earn an additional 10% interest.
JOGMEC has completed Term 2 and earned a 40% interest by reaching the C$10 million expenditure requirement.
JOGMEC has approved an additional C$3,050,000 budget for Term 3 through March 31, 2024.
The additional payment of US$1,25 million brings Namibia Critical Metals’ budget for the period March 31, 2024, to US$13 million.
Namibia Critical Metals president Darrin Campbell said this accelerated funding will allow the company to complete pilot plant hydrometallurgical test work and other important technical studies to finalise the pre-feasibility study for the large-scale Lofdal 2B-4 project.
“By injecting additional funds, the joint venture aims to fast-track the progression of crucial projects, ensuring timely execution and achieving key milestones ahead of schedule,” Campbell said.
He added that with the accelerated commencement of the pilot plant hydrometallurgical test work, the company intends to leverage advanced technologies and innovative methodologies to optimise processes and enhance the efficiency of mineral extraction and refining.
“Parallel technical studies will be conducted to support the ongoing pre-feasibility study, fostering a comprehensive understanding of Lofdal’s mining potential and paving the way for future success,” Campbell said.
