’A scoping study for the Halleck Creek Project of American Rare Earths Ltd (ASX:ARR, OTCQB:ARRNF) in the major minor hub of Wyoming, USA, backs the company’s thesis that the rare earth play has potential as a low-cost, scalable, world-class REE project.The study, compiled by independent firm Stantec Consulting Services Inc, points to some compelling economics and the company’s board has unanimously backed the project to its next stage of development.Solid economicsUnder a 3 million tonnes per annum (Mtpa) operating scenario, the scoping study projects a net present value (NPV) of US$673.9 million at an 8% discount rate and US$505.1 million at a 10% discount rate (pre-tax), yielding an Internal Rate of Return (IRR) of 22.5%.The payback period is estimated at 2.9 years, with total initial capital expenditures (capex) of US$456.1 million, including a US$76 million contingency.The life of mine (LOM) average cost is US$38.38 per kilogram of neodymium-praseodymium (NdPr) equivalent, comparing favourably to the US$50 per kilogram cost reported by China Northern Rare Earths, the world’s largest integrated producer.Advantageous geologyThe study attributes low operating costs to advantageous geology and mining economics as well as efficient processing through the Density Separation and Wet High Intensity Magnetic Separation (WHIMS) circuits.These significantly enhance ore grade, along with effective recovery via direct leaching.The initial phase targets 3.0 Mtpa mining, chosen for its low market entry and financing costs, with a 6 Mtpa scenario evaluated for future expansion.This approach reflects the project’s scalability, supported by a substantial resource base of 540 million tonnes, all of which supports a mine life of 180 years at 3 Mtpa and 90 years at 6 Mtpa.Notably, the study includes the in-state separation of rare earth elements in Wyoming, avoiding the need to export concentrates.Revenue projections show significant contributions from terbium and dysprosium, besides the predominant neodymium/praseodymium (NdPr) oxide.With an in-situ grade of 3,805 parts per million total rare earth oxides (TREO) and a compact operational area of around 400 acres, the project is set for efficient land use and potential expedited permitting.The design also benefits from the US Treasury’s proposed Advanced Manufacturing Production Tax Credit under the Inflation Reduction Act, which applies a 10% cost credit to domestic critical mineral production, enhancing the project’s financial viability.The financial modelling is based on a long-term NdPr price of US$91 per kilogram, informed by consensus estimates from leading investment banks, with detailed sensitivity analyses included in the study.Decoupling supply chainAmerican Rare Earths CEO Donald Swartz said: “The work presented herein is a culmination of several years of hard work that highlights the potential of Halleck Creek to be the next world-class REE project.“The study has revealed a truly elegant solution, as its simplicity unlocks the potential to decouple Western supply chains from Chinese oligopolies.“The favourable geology combined with conventional technology, low-operating expenses, modest initial capital expenditures, associated with an expedited path to production have converged to offer a project that is compelling – even when compared against the heavily subsidised Chinese state-owned entities.“As the Western downstream industries for rare earths are being advanced from a nascent stage, we have right-sized the initial phase of development to produce a reasonable amount of separated rare earths, within a project area which is highly scalable over time.“This is a project that could yield transparent pricing, provide reliable supply, and allow the US to REEshore this industry.” Article on Proactive Investors today QUOTENews will be picked up by the mining media globally , ARR is on the map now looking forward to further developments IMO
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