Defense Metals inks agreement with potential partner for Wicheeda REE project

Defense Metals (TSXV: DEFN) has signed a memorandum of understanding with an unnamed party for a supply agreement that represents a significant portion of its planned rare earths output.

Defense Metals is currently developing the Wicheeda rare earth element (REE) project in British Columbia. The property is located about 80 km northeast of the city of Prince George, covering an area of 118 sq. km.

“The interest shown by our potential strategic partner reflects growing industry confidence that Wicheeda could indeed become a strategically important source of rare earth elements based on the convincing results of our detailed pre-feasibility study published earlier this month,” Defense Metals CEO Mark Tory said in a news release.

“We still have a lot of work to do to turn our project into reality, but this MOU is certainly a major step in the right direction,” he added.

The company recently completed a preliminary feasibility study that demonstrated robust economics for the project, including an after-tax net present value of $1 billion, using an 8% discount rate, and an internal rate of return of 18.9%.

The Wicheeda REE deposit is estimated to hold 34 million tonnes of measured and indicated resources grading 2.02% total rare earth oxides (TREOs), for nearly 700,000 tonnes of TREOs.