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Greenland Minerals and Energy: nails initial mineral resource at Zone 2

Proactive Investors
Wednesday, 21 March 2012

Greenland Minerals and Energy (ASX: GGG) has discovered another massive area of contained metal at the Kvanefjeld project in Greenland.

The impact of the new discovery on the company's global resource is a 46% jump in total resource base to 512 million pounds of uranium, a 39% jump in TREO to 9.2 million tonnes, with an additional zinc component of 1.98 million tonnes.

Where the global resource becomes more important, is that the inventory includes 330,000 tonnes of heavy REO, 740,000 tonnes Y2O3.

The Kvanefjeld, Zone 2 and Zone 3 multi‐element deposits are hosted within the northern portion of the Ilimaussaq Intrusive Complex, favourably located near existing infrastructure in southern Greenland.

The initial Inferred Resource at Zone 2 has now been delivered to market and comprises a very encouraging; 242 million tonnes at 304 ppm uranium, 1.1 % TREO and 0.26% zinc for a contained metal inventory of 162 million pounds uranium and 2.67 million tonnes TREO.

There is potential for the Zone 2 resource to increase with additional exploration due to being open towards the Kvanefjeld deposit, which is located just 6 kilometres to the north.

The most notable similarity between Kvanefjeld and Zone 2 is the clear trend of improving uranium and rare earth grades with proximity to the surface, with the uppermost sill at Zone 2 showing similar, if not better uranium grades, than the upper uranium‐rich zone at Kvanefjeld.*Zone 2 similarities to Kvanefjeld*

Provding an added bonus for the future development opportunities of the project, the Zone 2 resource is hosted by the same rock‐type as Kvanefjeld, which is conducive to the same enhanced processing method already established for Kvanefjeld.*Zone 3 resource pending*

Highlighting how the project continues to grow its metal inventory at speed, across at Zone 3 drill assay results will be finalised soon, which will then deliver the initial Zone 3 mineral resource in the coming weeks.

Increasing the short term news flow, drilling results from Steenstrupfjeld are also expected in the next month.*Quick Kvanefjeld back story*

A regional exploration program has been running in tandem with the resource development and Feasibility Studies on Kvanefjeld since 2008, with deep exploration drill holes demonstrating that lujavrite forms a thick sub‐horizontal internal layer that extends through much of the northern Ilimaussaq Complex.

The upper portions of the lujavrite horizon are strongly enriched in uranium, REEs and zinc, with some sections exceeding 150 metres in true thickness.

Greenland Minerals and Energy has been targeting outcropping and near surface lujavrite bodies with extensive uranium‐REE mineralization now confirmed at Zone 2, Zone 3 and Steenstrupfjeld.*Geology*

The Ilimaussaq Intrusive Complex is known for the abundance of specialty‐metal rich minerals that cocrystallised with the highly alkaline silicate rocks of the complex.

The northern Ilimaussaq Complex is dominated by cubic kilometres of a sodalite‐nepheline syenite known as naujaite. Intruding the voluminous naujaites is a suite of hyper‐peralkaline syenites known as lujavrites.*Early 2012 technical breakthrough
Just last month Greenland Minerals and Energy in a major technical breakthrough identified that mineral concentrates can be leached under atmospheric conditions to yield extractions of 90% to 95% for uranium and heavy rare earth elements.

The significance of these extraction levels for the company is immense, as both uranium and heavy rare earth elements are the two main value drivers for the Kvanefjeld project. Light rare earth oxides are also recovered, but at a slightly lower level of extraction.

Importantly - beneficiation through froth flotation reveals industry leading upgrade ratios from ore to mineral concentrate representing less than 15% of the original mass.

Leach studies on the mineral concentrates demonstrate that the rare earth element and uranium bearing minerals are highly amenable to conventional acid leach/solvent extraction.

Greenland Minerals told Proactive Investors at the time that the breakthrough, "firms up our progress in establishing a simple, and effective way of processing the Kvanefjeld ores.

"In particular, high extractions of heavy rare earth elements under a simple atmospheric leach is a very favourable outcome. Put simply, we can effectively beneficiate and leach the key components."*Other key outcomes from the technical breakthrough include:*

- Favourable leach solution chemistry allows for the generation of both heavy and light rare earth products;

- Major advances in beneficiation and atmospheric leaching allow for the development of an enhanced, efficient flowsheet utilising conventional methods with low technical risk;

- Developments eliminate the need for whole‐of‐ore pressure leaching and significantly reduce the scale of leach circuits, leading to a substantial reduction in capital expenditure; and

- The company is looking to finalise its preferred flowsheet and development scenario through Q1 2012, before finalising Pre-Feasibility work on the Kvanefjeld project.*Kvanefjeld offers multiple revenue drivers*

Where the revenue generating potential really ramps up for Greenland Minerals is that there are multiple product streams and revenue drivers that can be derived from Kvanefjeld.

The company will focus on uranium and heavy rare earth oxide production initially, which then increases options and greater flexibility in the marketing and pricing of light rare earth products thereafter.*Greenland Government uranium decision "momentous" for Kvanefeld*

At the end of 2011 Greenland Minerals and Energy received some very positive news, in that the Greenland Government is introducing a uranium licensing framework for Kvanefeld, which looks to have delivered a blue print for the company to move ahead with a strategic partner and ultimately move closer to heavy rare earths production.

Under the licensing framework in Greenland, the licensee maintains the right to apply for an exploitation (mining) license for all exploitable elements listed on the exploration license.

Importantly the exploration license now includes radioactive materials, providing the company with the clear right to apply for the exploitation of radioactive elements along with all other exploitable elements - which brings the potential production of heavy rare earths into play.

At the time, Roderick McIllree, managing director of Greenland Minerals, commented on the good news and said, "The company expects in the first few months of next year to announce its final flow sheet that will almost certainly see Kvanefjeld optimised on heavy rare earth production, underpinned by an economic keel of uranium production."

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