A British Columbia First Nations group has made a substantial investment in Defense Metals Corp. (TSX-V: DEFN) and will assist the company with developing its flagship rare earths deposit in the province.
The mining company announced Wednesday that the McLeod Lake Indian Band (MLIB) had purchased 2.6 million Defense Metals shares and now holds a 1 per cent stake. The two organizations have also entered a “co-design” agreement and will jointly develop the Wicheeda project in central B.C. It was signed at the BC Natural Resources Forum in Prince George.
At their current value, that number of shares is worth approximately C$598,000. The mine will produce neodymium and praseodymium, which are essential components in magnets and other devices.
“Neodymium and praseodymium are instrumental in the manufacture of light-weight magnets that are in all of our day-to-day devices,” Defense Metals CEO Craig Taylor said. “These include cell phones, electric vehicles, electric seats in your car, wind turbines, military components, air conditioning and refrigeration.”
Defense Metals says the mine has a targeted annual production rate equivalent to about 10 per cent of the rare earth elements being produced throughout the world each year. The 8,300-hectare project is situated on the MLIB’s traditional territory, about 80 kilometres northeast of Prince George.
The rate of production expected from the mine would help Canada reduce its reliance on China for those rare earths significantly. The Asian nation currently dominates the market, which has caused concern among Canadian government officials. However, Taylor says the rare earths produced will still have to be sent to China for further processing.
“Through both agreements, MLIB stands to reap mutual benefits from our combined efforts around the Wicheeda project,” Taylor said. The company is part of the Discovery Group, a cohort of public mineral exploration and mining companies that includes Fireweed Metals Corp. (TSX-V: FWZ), Kodiak Copper Corp (TSX-V: KDK), Gold Basin Resources Corp (TSX-V: GXX) and others.
Scenes from #BCNRF2024 from @AME_BC Pres & CEO Keerit Jutla. Conversations around mineral exploration and critical minerals with @Josie_Osborne @DefenseMetals will continue next week at @AMEroundup! pic.twitter.com/bm7YJkxtGv
— Jonathan Jüri Buchanan (@JBExplores) January 18, 2024
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Mine construction won’t start for years
Taylor told the Prince George Citizen that construction wouldn’t start for another four to six years. Its advancement is dependent on the permitting process, he says.
According to Taylor, the construction phase will create about 400 jobs and the mine will need about 200 full-time employees after that.
The MLIB has about 515 members and their traditional territory spans approximately 108,000 square kilometres.
Earlier this month, Defense Metals entered a non-binding memorandum of understanding with Ucore Rare Metals Inc. (TSX-V: UCU) (OTCQX: UURAF). The companies will collaborate on their rare earth commercialization efforts in North America.
The company sent a rare earth carbonate sample from Wicheeda to Ucore’s Kingston facility for testing.
Defense Metals aims to contribute to the electric vehicle supply chain with its rare earths operation. An estimated 10,000 tonnes of neodymium will be needed for every 10 million new electric vehicles.
The company is currently in the midst of completing a pre-feasibility study at Wicheeda, which will conclude by the end of June.
rowan@mugglehead.com
