HALIFAX, Nova Scotia – Namibia Critical Metals has announced that the Mining Licence (ML 200) has been issued for the Lofdal Heavy Rare Earth Dysprosium-Terbium Project by the Republic of Namibia Ministry of Mines and Energy.
The Mining Licence is valid for a 25-year period through to May 10, 2046 and is issued to the Company’s 100% owned subsidiary, Namibia Rare Earths (Pty) Ltd. Lofdal is a joint venture between the Company and Japan Oil, Gas and Metals National Corporation (“JOGMEC”).
The Lofdal Heavy Rare Earths Project is located 450 kilometers northwest of the capital city of Windhoek in the Kunene Region of north-western Namibia. The project area covers 314 square kilometers centered on the Lofdal carbonatite complex which hosts a number of rare earth occurrences, including the Area 4 deposit.
Certain conditions of the Mining License are that there be a minimum 20% representation of historically disadvantaged Namibians in the management structure, including the board of the applicant holding the license and that at least 5% of the voting shares in the applicant be held by historically disadvantaged Namibians.
The Company has initiated the re-structuring of the management and shareholdings of its Namibian subsidiary to comply with these conditions.
Darrin Campbell, President of Namibia Critical Metals stated “This is an incredibly important milestone and achievement for the Lofdal project, the Company and for the Republic of Namibia. We have reached another significant value inflection point following closely on the heels of our Mineral Resource Update announced earlier this year in May. With the previously announced receipt of the Environmental Clearance Certificate for Lofdal on June 30, 2021, we now have a fully permitted mining project at Lofdal”.
Lofdal is unique as one of only two primary xenotime projects under development in the world. The deposit has the potential for significant production of dysprosium and terbium, the two most valuable heavy rare earths used in high powered magnets. The joint venture with JOGMEC is driven by Lofdal’s potential to be a long term, sustainable supply of heavy rare earths for Japan.
The terms of the JOGMEC JV Agreement stipulate that JOGMEC provides $3,000,000 in Term 1 and $7,000,000 in Term 2 to earn a 40% interest in the Lofdal project. Term 3 calls for a further $10,000,000 of expenditures to earn an additional 10% interest.
JOGMEC can also purchase another 1% for $5,000,000 and has first right of refusal to fully fund the project through to commercial production and to purchase all production at market prices. NMI cannot be diluted below a 26% carried working interest upon payment of $5,000,000 to JOGMEC for the dilution protection. The JV Agreement is structured such that no NMI equity will be issued and it is totally non-dilutive to NMI shareholders.