Nechalacho: A First for NWT Mining

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Unlocking Our Potential- June 2022

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In mid-October of 2021, after five months of round-the-clock mining, crushing and sorting, 500 tonnes of high-grade rare earth elements (REE) concentrate from the Nechalacho rare earth mine landed at the NWT Marine Transportation Services dock in Hay River destined for processing in Saskatoon and Norway. With that barge load of brick-red bastnaesite concentrate the NWT has taken its place on the supply chain of both light and heavy REE to the world.

“It sends a signal that Canada is indeed a serious player in the international drive toward a sustainable, reliable, responsibly mined source of critical rare earth elements independent of China and also of Russia,” said NWT Minister of Industry, Tourism and Investment Caroline Wawzonek, at the Arctic Energy and Resource Symposium in Calgary this March.


This article is included in the Unlocking Our Potential Newsletter – being made available to delegates, this week at PDAC 2022 - the world’s premier mineral exploration and mining convention in Toronto.  You can download our June 2022 edition here


Bringing Canada’s first REE mine into production was the culmination of four years of planning to bring a big vision to fruition, says Geoff Atkins, Managing Director of the Australian REE developer, Vital Metals Ltd. (ASX: VML l OTCQB: VTMXF). Atkins leads a team of seasoned professionals in the production and marketing of rare earths, with the goal “to become the lowest cost producer of mixed rare earth oxide outside of China by developing one of the highest-grade rare earth deposits in the world, and the only rare earth project capable of beneficiation solely by ore sorting”.

The polymetallic Nechalacho deposit, 110 kilometres southeast of Yellowknife, was discovered 50 years ago. But it wasn’t until 2019, after a global search to identify viable REE deposits, that Vital Metals secured mining rights and designed a staged, multi-year strategy to bring Nechalacho’s potential to market. Vital set up its production subsidiary, Cheetah Resources Corporation, in Yellowknife in 2019 to initially mine the North T Zone and prepare the site for eventual expansion to the much larger Tardiff Zone.

"To do all of that in two years when we've been managing remotely, that's something I'm pretty proud of," Atkins recently told Up Here Business magazine. "We’ve been able to do that in the middle of a pandemic when we haven't been able to travel for 18 months. Just to be able to get a mining operation up and running is a highlight."

That’s not all the Vital team has accomplished. To achieve its target of supplying mixed REE concentrate to end-stage refiners, Vital Metals Canada Ltd. is investing $20 million in a rare eaths processing facility in Saskatoon. There, Nechalacho’s concentrate will be converted to a mixed rare earth carbonate. This will be the feedstock for REEtec, the Norwegian firm which will separate the carbonate into individual rare earth oxides. Production from the Saskatoon facility is expected by the fall of 2022, with the goal of 2,000 tonnes of contained total rare earth oxides (TREO) annually by 2024.

“This is a great-news story for the NWT,” says David Connelly, Vice President of Strategy and Corporate Affairs for Cheetah Resources Ltd. “Cheetah and Vital have demonstrated a strong commitment to Environmental, Social and Corporate Governance values and strive to make this a key measurement of our ongoing success in the NWT and the rest of Canada.”

Connelly is especially pleased with the engagement in Nechalacho from neighbouring Indigenous communities, and from the region’s business community. “This is the first project we know of in Canada where an Indigenous company, the Yellowknives Dene’s Det’on Cho Corporation, is contracted to do mining operations on its own traditional territory,” says Connelly.

Cheetah employed a seasonal workforce of 58 during 2021, with some 70 per cent of Indigenous heritage from 10 communities. As impressive is the fact that 162 NWT businesses supported Cheetah’s first year of operations, with 85 per cent of its buying sourced from Indigenous suppliers.

Meanwhile, on the environmental front, Cheetah and Vital have strategically gone against the grain of the typical large-scale northern mining venture. Their approach: start small, go in stages, and be innovative to reduce or eliminate hazards.

Cheetah Resources is initially mining the North T Zone, hosting a high-grade resource of 101,000 tonnes at 9.01% LREO (light rare earth oxides) making it one of the highest-grade rare earths deposits in the world. At the heart of the project is the TOMRA sensor-based sorter, a compact, portable machine that uses X-ray and air-jet technology to separate and concentrate the heavier bastnaesite ore from the lighter quartz host rock. It has eliminated tailings and chemicals and greatly reduced the use of water and the project’s land and carbon footprints. 

Cheetah has trained five Indigenous operators to run the computerized TOMRA sorter, which was supported in 2021 with a $1.26 million contribution from CANNOR, the Canadian Northern Economic Development Agency. They will continue sorting operations from ore that was stockpiled during the 2021 season. Mining at the North T pit will resume in 2023 with a revised mine plan, as an expanded, richer resource was unexpectedly realized in 2021. 

This is all in preparation for a future move south (a couple of kilometres) to the Tardiff Zone, a mammoth, world-class resource of 94.7 million tonnes at 1.46% REO (measured, indicated and inferred). Tardiff has been extensively explored and Cheetah continues with winter definition drilling programs.

“This is a multi-generational project that can create decades of employment and business opportunity for the NWT,” says Connelly. Development for year-round mining could begin as early as 2024, supported by conventional ice road, barge and air services from Yellowknife and Hay River.

Today, as the Nechalacho and Saskatoon projects evolve, Vital Metals and Cheetah Resources are monitoring international markets and events. Driven in large part by decades of unstable Chinese dominance of global rare earth supply, their goal to guarantee a responsibly sourced supply of REE feedstock independent of China has been even further amplified by Russia’s aggressive moves in Europe.

As home to Canada’s first rare earth mining operation, the Northwest Territories’ place on the rare earth supply chain has become a reality.