Tuesday, December 5, 2023
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Vital Metals Halts Construction and Mining Operations Due To Economic Concerns

Key Highlights

  • Vital Metals pauses construction of Saskatoon processing facility and halts mining in North T zone due to economic concerns.
  • Rare earth prices have dropped due to China’s slowing economy, affecting the viability of Vital’s intermediate product plans.

Australian rare earths producer, Vital Metals, has paused the construction of its Saskatoon processing facility, the only rare earths producer in Canada, due to economic concerns

Rare Earth Prices Drop as China’s Economy Slows

Vital Metals determined that its plans to market an intermediate product from the plant weren’t economically viable, while the scale of mining at Vital’s North T zone at its Tardiff rare earth project in the Northwest Territories also proved uneconomical. 

Before a trading halt on the company’s stock on 18 April, shares fell more than a quarter to A1.1¢ on the ASX for a market cap of A$43.8m.

Vital’s interim chairman, Richard Crookes, said: “There is no economic imperative to complete this demonstration project at the current time. However, the Saskatoon processing facility can provide valuable intermediate processing capacity for a downstream rare earth hub in Saskatchewan.”

“North America needs independent downstream processing to further enable the transition to the green economy and Vital is looking forward to working with like-minded parties to deliver a completed project.”

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Vital Metals to Review Strategic Plan and Seek New Funding Sources Amid Falling Rare Earth Prices

The company is now completing a three-month strategic review of the plant while it conserves cash and seeks out new funding sources and partnerships with third parties to “build a sustainable business model.” 

  1. Vital recently completed a drill program of more than 6,600 metres at its Tardiff deposit, with assay results and a resource update expected in the second half of the year. 
  2. The deposit has high grades of light rare earths neodymium and praseodymium.

The decision comes after rare earth prices fell in March and early April due to China’s slowing economy and modest growth forecasts, according to a recent edition of the newsletter Critical Metals for a Sustainable World. Prices for light rare earths are the lowest they have been since late 2020 or early 2021.

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