Vital Metals’ Tardiff Project Faces Resource Confidence and Supply Chain Challenges

Strong Economic Foundations at Tardiff

Vital Metals Limited (ASX – VML) has released a comprehensive update on its Nechalacho Project in Canada, spotlighting the Tardiff deposit’s promising Scoping Study results. Completed by ERM Consultants Canada Ltd., the study confirms the deposit’s robust economics, with a pre-tax net present value (NPV) at an 8% discount rate of US$776 million and a post-tax NPV of US$445 million. The internal rates of return (IRR) stand at 32% pre-tax and 25.5% post-tax, underscoring the project’s financial viability over an initial 11-year mine life.

The study focuses on a hard rock starter open pit mining operation targeting only 15% of the total mineral resource estimate, deliberately excluding adjacent deposits to maintain a conservative approach. This strategy yields an average annual production of 56,000 tonnes of mixed rare earth element (REE) and niobium concentrate, with a concentrate grade of 26.4% total rare earth oxides (TREO) and 3.3% niobium oxide (Nb2O5).

Operational Efficiency and Cost Structure

Vital Metals’ pit design anticipates a daily production rate of 14,000 tonnes, translating to approximately 3 million tonnes per annum, supported by a notably low stripping ratio of 0.3 – 1. Capital expenditure is estimated at US$291 million (A$455 million), inclusive of a 35% contingency, while operating costs are projected at US$24 per dry metric tonne mined, also incorporating a 20% contingency. These figures reflect a streamlined operation designed to maximize economic returns while managing risk.

The project’s operational model includes a seven-month processing season aligned with a three-month barge shipping window on Great Slave Lake, optimizing logistics and cost efficiencies. This seasonal approach also allows for leveraging renewable energy sources during the plant’s downtime, enhancing sustainability credentials.

Pathway to Growth and Optimization

Recognizing the potential for further upside, Vital Metals plans to advance the project into a Prefeasibility Study (PFS) targeted for completion by the end of 2026. This next phase will focus on extensive metallurgical testing to optimize recoveries of TREO and niobium, validate the payability of niobium, and explore zircon recovery opportunities. Additional infill drilling is also planned to increase resource confidence and potentially extend the mine life beyond the current 11 years.

The study highlights the importance of developing a Canadian rare earth supply chain, with Vital actively collaborating with the Canadian government to accelerate the establishment of a domestic processing hub. This strategic partnership aims to secure a responsible and sovereign supply of critical minerals essential for the green economy.

Corporate and Financial Position

During the quarter, Vital Metals completed a 50-to-one share consolidation, reducing the total number of shares and options on issue. The company ended the period with approximately A$1.2 million in cash. While this cash position supports ongoing activities, Vital is exploring non-dilutive funding options, including the sale of ore stockpiles and debt financing, to sustain operations through the PFS phase.

Overall, the Tardiff Scoping Study marks a significant milestone for Vital Metals, positioning the Nechalacho Project as a key player in North America’s rare earth landscape. The company’s methodical approach to resource development, cost management, and supply chain integration bodes well for its future prospects.