Rare Earths Co.: Project's 3D Model Update a 'Milestone'
Source: Streetwise Reports
March 17, 2023 (Investorideas.com Newswire) Defense Metals Corp. says updates to its 3D geological model of its rare earth element project in British Columbia are a "project milestone."
Updates to Defense Metals Corp.'s (DEFN:TSX.V; DFMTF:OTCQB; 35D:FSE) 3D geological model of its Wicheeda rare earth element (REE) project in British Columbia have been completed.
The model now includes over 10,000 meters of new drilling in 47 holes completed in 2021 and 2022 that weren't included in the project's preliminary economic assessment (PEA), which was released last summer.
The new model "represents a significant project milestone and [a] culmination of two years' worth of focused exploration," Defense Metals Director and geologist Kristopher Raffle said.
"This drilling has yielded some of the longest and highest-grade drill intercepts to date on the project and led to the discovery of a new zone of high-grade mineralization at depth that has the potential to positively impact an updated mineral resource estimate," Raffle said.
The next steps include updating that resource estimate and completing a preliminary feasibility study (PFS).
"Defense Metals is advancing toward what we believe will be a compelling preliminary feasibility study that will incorporate data from the 2021 and 2022 drilling programs," Noble Capital Markets analyst Mark Reichman said in a March 1 research note. He reiterated his Outperform rating for the stock with a CA$0.70 target.
"In addition to [the] significant potential to expand the resource and extend the mine life beyond 19 years, we expect grade enhancement and the meaningful conversion of inferred to indicated and potentially measured resources," Reichman wrote.
Analyst Michael Gray of Agentis Capital wrote in a research note that Wicheeda was well-located with access to key infrastructure and "could become a globally significant producer" of REEs. He set a 12-month valuation of CA$3.50 for the stock.
"DEFN is a best-of-breed North American REE developer that is well-positioned to its leverage-growing global REE demand and government support to become part of a North American REE critical metals supply chain," Gray wrote.
The Catalyst: 2021-2022 Drilling Returns Highest Grades
Most of the post-PEA drilling was undertaken to increase mineral resource confidence from inferred to indicated and measured categories, define the northern edge of the carbonate complex, and provide detailed geotechnical and hydrogeological drilling data for pit slope and mine design for the PFS.
The holes returned some of the longest and highest-grade intercepts from the entire project, the company said.
Hole WI21-58 returned 3.09% total rare earth oxide (TREO) over 251 meters, and WI22-68 returned 6.7% TREO over 18 meters.
High-grade REE dolomite-carbonatite was discovered in the north area of the deposit, returning 3.17% TREO over 196 meters, including 4.29% TREO over 55 meters to a depth of 201 meters extending 30 meters below the resource pit shell.
"This intercept . . . is considered to offer significant potential for resource expansion and late mine-life resource grade support," the company noted in its release.
As it works to upgrade Wicheeda's resource with more drilling, the company is also building a hydrometallurgical pilot plant SG Lakefield in Ontario.
Construction has started, and commissioning should start later this month, with pilot operations completed by the end of April.
The data from the pilot plant will also be used in the PFS, and the samples will be shared with potential end users.
Breaking China's Grip on Market
China has about 85% of the world's processing capacity of REEs, which are in high demand in the new green economy for purifying water, MRIs, fertilizers, weapons, research, wind turbines, computers, and permanent magnet motors for electric vehicles (EVs).
Defense Metals hopes to produce as much as 10% of the world's light REEs to reduce that reliance on China.
According to a report by Fortune Business Insights, the global REE market is expected to grow from US$2.6 billion in 2020 to US$5.5 billion in 2028.
"The rising demand for consumer durables such as tablets, laptops, and smartphones is one of the factors driving the consumption of rare earth elements," the report said. "The demand for these elements in developing economies is estimated to expand rapidly owing to an increase in industrialization, building and construction activities, and various digitization activities by governments in the respective countries." [OWNERSHIP_CHART-9678]
Demand for EVs in western countries is also estimated to create a surge in the consumption of REEs, the report said.
"However, the high cost of these minerals and the monopoly of China-based manufacturers is expected to hinder the market growth," the authors wrote.
Ownership and Share Structure
About 5% of the company's stock is owned by insiders, including Director Andrew S. Burgess with 2.01% or 4.18 million shares, and CEO Taylor with 1.2% or 2.5 million shares, according to Reuters.
About 5% of the company is owned by institutional entities, including U.S. Global Investors Inc. with 0.72% or 1.5 million shares, Reuters said.
The rest, 90%, is retail.
Defense Metals has a market cap of CA$62.31 million with 207.7 million shares outstanding, 164.9 million of them free floating. It trades in a 52-week range of CA$0.39 and CA$0.165.
1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Defense Metals Corp. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Defense Metals Corp. Please click here for more information. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees, or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Defense Metals Corp., a company mentioned in this article.
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com