Greenland Mines gets exploration license for Sarfartoq rare earths project

Greenland Mines’ (Nasdaq: GRML) Sarfartoq rare earths project has received its exploration licence. The stock rose.  

The government approval granted Friday satisfies one of the key regulatory closing conditions for the company’s acquisition of the Sarfartoq project from Neo Performance Materials for $35 million (C$48.4 million). The new owner has called Sarfartoq one of the island’s “most advanced and compelling rare earth projects,” citing its high-grade nature and favourable Arctic logistics. 

“This approval from the Government of Greenland is a fundamental milestone for our company and for the future of Sarfartoq,” Greenland Mines president Bo Møller Stensgaard said in a news release. “Sarfartoq is one of the most important undeveloped neodymium-praseodymium resources in the Western world.”

Shares jumped 22% on Friday to close at $10.14 apiece in New York after reaching an intraday high of $12.70. By late Monday morning they had fallen back to about $8.79, trimming most of Friday’s gains. The company has a market capitalization of about $1.4 billion.

Carbonatite

Located roughly 60 km from Kangerlussuaq in the southeast, the project is the site of a carbonatite-hosted deposit strongly enriched in neodymium-praseodymium (Nd-Pr). As part of the sale deal, Neo Performance will receive offtake rights on up to 60% of future ore or mineral concentrate production from Sarfartoq. 

Greenland Mines expects to complete an updated SEC S-K 1300-compliant resource this summer. It plans to refresh a 2011 preliminary economic assessment by validating 23,000 metres of drilling completed in 2023. It is continuing environmental baseline studies to support future permitting. 

The project hosts 5.88 million indicated tonnes grading 1.77% total rare earth oxides (TREO) and 2.46 million inferred tonnes grading 1.59% TREO for roughly 27 million kg of neodymium oxides and 8 million kg of praseodymium oxides, according to the historical NI 43-101 resource cited by the company. 

Skaergaard

The company also has Skaergaard, a large gold-palladium-platinum project in southeast Greenland that contains copper and cobalt. Unlike Sarfartoq, it has not yet reached the economic study stage. The company is carrying out drilling, metallurgical testing, environmental baseline work and bulk sampling ahead of an initial economic assessment.

Skaergaard hosts 159 million indicated tonnes containing 8.04 million oz. palladium, 2.7 million oz. gold and 630,000 oz. platinum, according to a 2022 resource. It has 205.4 million inferred tonnes containing 9.11 million oz. palladium, 4.13 million oz. gold and 740,000 oz. platinum.