Namibia Critical Metals has announced that Japan Oil, Gas and Metals National Corporation (JOGMEC) will provide an additional $1,100,000 to expand and accelerate the current drilling program for the Lofdal Heavy Rare Earths Project in northern Namibia.
This additional commitment will increase the Term 1 joint venture expenditure from $3,000,000 to $4,100,000 by March 31, 2021.
All references to dollar amounts are in Canadian dollars. This increase in funding allows for an additional 6,000 m of diamond drilling to develop resources at Lofdal.
A second rig has been deployed to site to maintain Term 1 program scheduling.
Don Burton, President of Namibia Critical Metals states:
“Lofdal is an exciting project and is unique as one of only two primary xenotime deposits under development in the world, the other deposit being Browns Range in Australia.
“As demonstrated in its Preliminary Economic Assessment Lofdal has the potential for significant production of dysprosium and terbium, the two most valuable heavy rare earths used in high powered magnets.
“JOGMEC is supporting the security of light rare earth supplies for Japan by applying its financial scheme to Lynas Corporation. We are pleased to see this additional injection of funds by our joint venture partner which will enable us to further demonstrate the value in Lofdal as a long term, sustainable supply of heavy rare earths for Japan.”
Term 1 drilling program expanded
The initial Term 1 budget provided for a total of 7,200 m of resource drilling in Area 4 and 1,500 m of exploration drilling at the Northern Splay and Dolomite Hill to be completed by year end with the primary objective of doubling the resource size in Area 4.
Following recommendations to the Joint Venture Management Committee, the drilling budget has been increased to enable resource evaluations in two additional areas – Area 2B and Area 5, and to supplement drilling in Area 4 with an additional 1,000 m of drilling.
This additional 6,000 m of drilling will provide for a total of 8,200 m in Area 4, 2,600 m in Area 2B and 2,400 m in Area 5. Both Area 2B and Area 5 have historic drilling and trenching that was carried out by the company during the period 2010-2012.
A second drill rig has been deployed to the project to maintain schedule and drilling will now continue through to March 2021.
Drilling in Area 4 is over 60% completed and on schedule to deliver an updated 43-101 resource estimate in Q1 2021. The company will now target to include a maiden resource estimate for Area 2B in the same report.
To meet this additional objective both drill rigs are currently operating in Area 2B to complete that planned drilling before moving back to Area 4.
Drilling in Area 5 will commence in Q1 2021 after which time results will be assessed for inclusion in a separate resource estimate.
JOGMEC joint venture agreement
As previously announced, the joint venture agreement with JOGMEC provides for the two companies to jointly explore, develop, exploit, refine and/or distribute mineral products from Lofdal.
JOGMEC has the right to earn an interest in stages following an initial non-refundable exploration commitment of $3,000,000. Subsequent financial commitments may be exercised at the sole discretion of JOGMEC upon completion of each phase with Term 2 requiring a $7,000,000 contribution to earn 40% interest in Lofdal, Term 3 requiring a $10,000,000 contribution for an additional 10% interest in Lofdal after which JOGMEC may elect to acquire an additional 1% interest for $5,000,000.
The agreement contemplates completion of a feasibility study for Lofdal at the end of Term 3 and makes provision for JOGMEC to elect to exclusively fund development of Lofdal provided that the company’s interest will not be diluted below 26%.
The additional expenditure of $1,100,000 during Term 1 can be credited towards the Term 2 expenditure commitment of $7,000,000.