Vancouver, Ju ly 22 , 2021 – Leading Edge Materials Corp. (“ Leading Edge Materials ” or the “ Company ”) ( TSXV: LEM ) ( Nasdaq First North: LEMSE ) ( OTCQB: LEMIF ) is pleased to announce the results of a Preliminary Economic Assessment study ("PEA" or the “Report”) for the development of its 100%-owned Norra Karr REE project located in Sweden (“Norra Karr” or the “Project”). The PEA was prepared by SRK (UK) Ltd. (“SRK”) and all figures in the PEA are US dollars unless otherwise specified.
As previously announced , the Company commissioned SRK to re-evaluate the Project at PEA level with the objective to improve resource utilization, project sustainability and substantially minimize environmental footprint of the Project compared to the design in the pre-feasibility study which was released in 2015 1 (the “2015 PFS”) and formed the basis for the current mining lease permitting process.
Main PEA Highlights (In comparison to the 2015 PFS)
- Significant increase in resource utilization by proposing recovery of nepheline syenite (NS) industrial mineral, zirconium oxide (Zr) and niobium oxide (Nb) products in addition to the rare earth oxide (“REO”) products. In the PEA more than 50% of total mined material is planned to be sold as products compared with previously less than 1% in the 2015 PFS. The PEA also identifies future opportunities to valorize the residual mined material which could potentially result in all mineralized material mined to be treated as potential commercial products.
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Introducing a revised Project flowsheet to minimize the environmental footprint at the Norra Karr site:
- The Norra Karr site will only include mining and comminution methods consisting of crushing, milling and magnetic separation, eliminating all chemical processing from Norra Karr and associated waste vs the 2015 PFS study. In the PEA following physical separation resulting material streams either are shipped as products or as concentrates for further processing at other locations and a single waste stream to be stored at the Norra Karr site.
- The rare earth, zirconium and niobium bearing concentrate will be transported to a dedicated off-site location for chemical processing and further recovery.
- The combination of the above, results in a single waste stream at the Norra Karr site consisting of the mineral aegirine which can be dry stacked in a lined impoundment together with waste rock from mining, eliminating the need for a wet tailings storage facility. This new design substantially reduces land area usage of the Project by approximately 80% (see Figure 1) and results in no chemical process tailing dams being required at Norra Karr. These changes considerably reduce the environment risk profile of the Project at Norra Karr.
- In addition, the removal of chemical processing and wet tailings at Norra Karr delivers an overall predicted 51% reduction in water requirements over the life of mine vs the 2015 PFS study. Use of mine dewatering for processing can reduce additional water requirements by almost 100% and the elimination of discharge requirements to local water bodies compared with the 2015 PFS design.
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The PEA introduces the design of an off-site chemical recovery plant located close to reagent supplies within an existing brownfield development area where mixed REO (MREO), Zr and Nb products are planned to be recovered. Residual process waste at the off-site facility consists of neutralized leach residue and gypsum disposed of in geomembrane lined dry stack impoundments. The Report identifies the future potential to further process the gypsum waste into a gypsum product for construction material markets.
The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.
Filip Kozlowski, CEO of Leading Edge Materials states “ I am very excited to share these important PEA results, having more than met the strategic goals we set out to achieve. Norra Karr is a globally recognized significant rare earth project, and the re-evaluated design strengthens the sustainability, economics and resiliency of the project. By moving chemical processing off-site, and significantly improving resource utilization we have shown the opportunity to eliminate the need for a wet tailings storage. Adding further revenue streams improves the resiliency and cost competitiveness of the project relative to current dominant supply of rare earths from China. Norra Karr offers a rare opportunity for the European Commission’s ambitions to develop a sustainable and secure EU based value chain for rare earths and permanent magnets and we now have a much better path ahead of us. ”
Figure 1 –
Graphical illustration of Norra Karr On-site open pit, waste rock facility and physical beneficiation plant in comparison to 2015 PFS infrastructure and tailings dam (in red)
Project Financial Highlights
- Pre- and post-tax Net Present Value (NPV) of $1,026M and $762M using a 10% discount rate
- Pre- and Post-tax Internal Rate of Return (IRR) of 30.8% and 26.3%
- Accumulated LoM project revenues of $9,962M
- Average annual EBITDA of $206M
- Initial Capital Expenditures (CAPEX) of $487M
- Pre-tax Payback Period from first production of 5.1 years
- Life of mine average gross basket price per kg of separated mixed REO product at $53
- Operating cost per kg of separated mixed REO product at $33 including toll separation charges
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By-product revenue per kg of separated mixed REO product $19
Operational Highlights
- Life of Mine (LOM) is 26 years
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LOM average annual
- Mining rate of 1,150,000 tonnes
- strip ratio of 0.32
- TREO 5,341 tonnes
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Main magnet rare earth oxides (“MagREO”) (Nd, Pr, Dy, Tb) 1,005 tonnes
- Dy 2 O 3 : 248 tonnes
- Tb 2 O 3 : 36 tonnes
- Nd 2 O 3 : 578 tonnes
- Pr 2 O 3 : 143 tonnes
- Nepheline Syenite co-product 732,885 tonnes
- Zirconium dioxide co-product 10,200 tonnes
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Niobium oxide product 525 tonnes
Location and Infrastructure
On-site – Mining and comminution
The Norra Karr mine site is in the south central of the Kingdom of Sweden approximately 1.5 km from the eastern shore of Lake Vattern with the lake and the deposit separated by the E4 highway. Advantageously situated close to both Swedish coasts, approximately 240km south-west of Stockholm and 160km east of Gothenburg. The nearest urban settlement is Granna, 11km south by sealed road.
Regional road access from all major cities and ports to the project site is via the sealed dual carriageway E4 highway and further local access is by all-weather sealed and unsealed roads. Access to the national railway is approximately 30km east from the site with a number of freight terminals in the regional area.
Currently the site is undeveloped within the perimeter and the area still maintains natural vegetation, forestry plantations, cultivated farmlands and farmhouses. The PEA outlines the buildings and installations required to support mining, physical comminution, waste storage, materials handling and product logistics.
Off-site – Chemical leaching and recovery
The ultimate location for the off-site process facility is subject to detailed localization studies between greenfield and brownfield options. For the purpose of the PEA an existing brownfield location has been conceptually chosen to demonstrate the new process flow design of the project. The chosen site is an existing brownfield industrial area within easy reach of rail and port facilities located in the city of Lulea, Norrbotten County in the north of Sweden, approximately 1200 km north of the Norra Karr site along the E4 highway. Lulea has the seventh largest all-year round harbour in Sweden for shipping goods from several mining districts, major chemical producers and a well-established steel industry. The PEA outlines the buildings and installations required to support chemical processing, waste storage, materials handling and product logistics.
Geology and Mineral Resource Estimate
Geologically, Norra Karr is a zoned agpaitic, peralkaline, nepheline syenite complex. The alkaline intrusive REE-enriched body underwent compressive deformation and folding during the Sveconorwegian shearing episodes.
The mineralization is relatively simple with nearly all the REE mineralization is hosted in the zircono-silicate mineral eudialyte, which in itself is a complex mineral. The eudialyte has been found to be relatively rich in REE’s, containing a high proportion of heavy rare earth elements (HREE’s). The mineralized intrusive is an elongated body orientated in an NNE-SSW direction, shallow dipping angles of 35°- 40° with an approximate strike length of 1,300 m and 450 m in width. The Norra Karr deposit has the advantage that average concentrations of uranium and thorium based on 9987 samples, U 11.4 ppm and Th 10.9 ppm, are extremely low compared with other REE deposits.
Norra Karr was discovered as early as 1906 by SGU (Geological Survey of Sweden), followed by trench bulk sampling work conducted by Boliden throughout the 1940’s and 1970’s. The first drilling campaigns took place under Tasman Metals between 2009-2012, completing a total of 119 diamond drillholes for a total length of 20,420 m.
All of the mineral resource estimates are disclosed in accordance with the NI43-101 Standards of Disclosure for Mineral Projects and the classification of levels of confidence are considered appropriate on the basis of drillhole spacing, sample interval, geological interpretation, and all currently available assay data. Data obtained from the drilling undertaken over the exploration permit was verified by WAI for the 2015 PFS and reviewed by SRK for purpose of the mineral resource estimate in the PEA.
The Mineral Resource classification for the Norra Karr REE deposit is in accordance with the guidelines of the CIM Definition Standards for Mineral Resources & Mineral Reserves (CIM, 2014).
For the purpose of reporting the REE grades in the Mineral Resource block model were converted to rare earth oxides using the conversion factors in Table 1.
Table 1 - Rare Earth (+zirconium and niobium) oxide conversion factors
| Element | Conversion | Oxide | Element | Conversion | Oxide |
| Ce | 1.171 | Ce 2 O 3 | Nd | 1.166 | Nd 2 O 3 |
| Dy | 1.147 | Dy 2 O 3 | Pr | 1.17 | Pr 2 O 3 |
| Er | 1.143 | Er 2 O 3 | Sm | 1.159 | Sm 2 O 3 |
| Eu | 1.157 | Eu 2 O 3 | Tb | 1.151 | Tb 2 O 3 |
| Gd | 1.152 | Gd 2 O 3 | Tm | 1.142 | Tm 2 O 3 |
| Ho | 1.145 | Ho 2 O 3 | Y | 1.269 | Y 2 O 3 |
| La | 1.172 | La 2 O 3 | Yb | 1.138 | Yb 2 O 3 |
| Lu | 1.137 | Lu 2 O 3 | Nb | 1.431 | Nb 2 O 5 |
| Zr | 1.35 | ZrO 2 |
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Table 2 - Norra Karr Mineral Resource Statement (SRK, 2021)*
| Mineral Resource Classification |
Tonnes
(Mt) |
TREO
(%) |
HREO
(%) |
ZrO
2
(%) |
Nb
2
O
5
(%) |
Nepheline Syenite
(%) |
| Inferred | 110 | 0.5 | 0.27 | 1.7 | 0.05 | 65 |
*Notes:
- Effective date 20 July 2021.
- Qualified Person Mr Martin Pittuck
- Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral Resources are not Mineral Reserves until they have Indicated or Measured confidence and they have modifying factors applied and they have demonstrated economic viability based on a Feasibility Study or Prefeasibility Study.
- The Mineral Resources reported have been constrained using an open pit shell assuming the deposit will be mined using open pit bulk mining methods , above a cut-off grade of USD150/t ., including a 30% premium on projected commodity prices and unconstrained by commodity production rates and the 260 m highway buffer zone .
- The Mineral Resources reported represent estimated contained metal in the ground and has not been adjusted for metallurgical recovery.
- Total Rare Earth Oxides (TREO) includes: La 2 O 3 , Ce 2 O 3 , Pr 2 O 3 , Nd 2 O 3 , Sm 2 O 3 , Eu 2 O 3 , Gd 2 O 3 , Tb 2 O 3 , Dy 2 O 3 , Ho 2 O 3 , Er 2 O 3 , Tm 2 O 3 , Yb 2 O 3 , Lu 2 O 3 , Y 2 O 3 .
- Heavy Rare Earth Oxides (HREO) include: Eu 2 O 3 , Gd 2 O 3 , Tb 2 O 3 , Dy 2 O 3 , Ho 2 O 3 , Er 2 O 3 , Tm 2 O 3 , Yb 2 O 3 , Lu 2 O 3 , Y 2 O 3 .
- HREO is 54% of TREO
The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. The rationale for re-evaluation of the Project at the PEA level is justified for the following reasons; Recognition of potentially economic commodities in the mineralization not evaluated in the 2015 PFS, namely nepheline syenite, niobium and zircon, recognition of the need to reduce the project footprint and assess alternatives to a large tailing's facility at the mine site, and the need to minimize waste on the project and have greater utilization of the extracted materials. The Company does not expect the mineral resource estimates contained in the PEA to be materially affected by metallurgical, environmental, permitting, legal, taxation, socio-economic, political, and marketing or other relevant issues.
Mining
The mine planning work for the PEA was carried out using a mining model, which was generated from the mineral resource model. An optimal pit shell was chosen based on the highest average discounted cashflow assuming a production rate of 1.15 Mtpa of plant feed and a discount rate of 10%. The generated extraction schedule and pit design also sought to maximize the potential for waste backfill quantities which results in a four staged approach which provides a 25 year LOM, a total of 29.3 Mt of run-of-mine (ROM) and a total of 9.4 Mt of waste for an average strip ratio of 0.32. The staged approach commences with the planned 1.15mtpa crusher feed target, which is expected to be met starting in Year 1 due to the limited waste stripping requirements. The mine schedule sequence starts in Stage 1, with Stage 2 commencing in Year 2. Stage 3 begins in Year 3, while Stage 4 is delayed until Year 16 to maximize backfill options. The total production averages 1,625 ktpa from Year 3 to 9, after which the total material movement decreases as the strip ratio in Stage 3 decreases. Waste stripping requirements increase starting in Year 16 as Stage 4 begins, averaging 1.8 Mtpa until Year 20. The delay of Stage 4 allows for 1.9 Mt or 21% of total waste to be backfilled in the pit void.
Figure 2 – Open pit and waste rock facility through the different stages
Mining equipment includes two 5.5 m 3 excavators with up to six 46.8 t payload haul trucks and in addition a stockpile loader and two 110 mm drills. Although there was no readily available electric mining equipment to consider for the purpose of the PEA this option was noted as a future opportunity to further increase the sustainability merits of the Project.
The waste rock storage plan is designed to minimise the waste footprint by pit backfill in the northern part of the pit once that area has been mined as well as an external waste dump. The external waste dump design has a capacity of 8.8M loose cubic meters. The backfill waste dump design has a capacity of 1.35 m loose cubic meters. It is also expected that some of the waste mined in the earlier years of the operation will be used for construction purposes as required.
Processing Overview
In the 2015 PFS, chemical processing for leaching and recovery of REO was envisioned to occur on site. This required a large tailings storage facility and comprehensive water treatment to ensure environmental protection. Even with this, considerable risk was perceived to the processing operation and waste storage in local proximity to a number of designated natural protection areas.
In order to reduce any risk of potentially hazardous substances away from the environmentally sensitive areas the PEA re-evaluation proposes to move the chemical processing to a more suitable off-site location. The on-site mine site will only include physical comminution and magnetic separation, eliminating chemically leached waste streams and the need for toxic reagents at site.
The PEA demonstrates the potential to produce a eudialyte concentrate at site through crushing, milling and a two-stage magnetic separation. This concentrate is shipped to an off-site chemical processing facility elsewhere in Sweden, close to a well-established chemical industry allowing reagents to be readily supplied, reducing the carbon footprint of the reagents and any transport risks and costs associated. Availability of cost competitive and low carbon footprint hydropower electricity in the region for the off-site facility offers a reduction in operating costs and climate impact for the energy intensive process. The proposed conceptual flowsheet is provided in Figure 3.
Figure 3 – On-site and Off-site high-level flow sheets as used in the PEA
For the PEA, SRK has relied on past testwork, both prior and subsequent to the 2015 PFS and industry accepted practices as a basis for the redesigned flowsheet. The process design criteria in Table 3 and Table 4 formed the operational basis for the process flowsheet design.
Table 3 - Process design criteria
| Description | Magnitude | Unit |
| On site process plant throughput | 1150 | 000 t/a |
| ROM TREO grade | 0.56 | % |
| ROM Zr grade | 1.86 | % |
| ROM Nb grade | 0.06 | % |
| Contained TREO | 6,946 | t/a |
| Contained Zr | 21,394 | t/a |
| Contained Nb | 657 | t/a |
| Process plant operation | 24/7/365 | - |
| Crushing mechanical availability | 80 | % |
| Griding and beneficiation availability | 91 | % |
| Hydrometallurgy plant availability | 91 | % |
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Table 4 - Overall Process Recovery
| Mass Balance | Overall MS * | Leach Recovery | Intermediate Separation from Leach Solution | Overall Recovery |
| Ce₂O₃ | 93% | 91% | 99% | 84.1% |
| Dy₂O₃ | 93% | 91% | 99% | 84.1% |
| Er₂O₃ | 93% | 91% | 99% | 84.1% |
| Eu₂O₃ | 93% | 91% | 99% | 84.1% |
| Gd₂O₃ | 93% | 91% | 99% |
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