Vancouver-based Defense Metals on Wednesday announced a letter of interest from Export Development Canada (EDC) that could see up to $250-million in debt financing committed toward the development of its Wicheeda rare earth element (REE) project in British Columbia.

The nonbinding letter positions EDC as a potential mandated lead arranger in the financing structure for the project, which is being advanced as a strategic source of critical minerals for the global clean energy and defence sectors.

“We are very pleased to receive this letter of interest from EDC. This is a strong endorsement of the strategic importance of the Wicheeda REE project and shows the key role that EDC might consider playing in its financing,” said executive chairperson Guy de Selliers. “This project would indeed contribute to a number of Canadian priorities including the clean energy transition and the security of supply of critical minerals.”

Defense Metals in April completed a prefeasibility study (PFS) for the Wicheeda project, confirming the project’s strong economics and development potential.

“The PFS we released on April 7 demonstrates the financial robustness of the Wicheeda project. EDC’s prospective support can serve as an anchor to mobilise a comprehensive debt package,” commented president and CEO Mark Tory.

“We are also encouraged by the recent creation in Canada, Europe and elsewhere of a number of very large government-backed equity funds with mandates to finance projects like Wicheeda. For such a strategically important and financially robust project as Wicheeda we are confident that financing will be available. We are encouraged by EDC’s letter of interest.”

Located about 80 km north-east of Prince George, the $1.4-billion Wicheeda REE project benefits from access to highways, hydroelectric power, and proximity to rail and port infrastructure.

The project has proven and probable reserves of 25.46-million tonnes grading 2.43% total rare earth oxide (TREO), 961 parts per million (ppm) praseodymium oxide, 2 661 ppm neodymium oxide, 11 ppm terbium oxide and 33 ppm dysprosium oxide. The project’s reserves support a 15-year life-of-mine with an average production of 31 900 t/y of TREO in concentrate, yielding about 5 200 t of TREO in a high-value mixed rare earth carbonate after the removal of cerium and lanthanum.

Mined ore will be crushed at a facility near the pit and transported by conveyor to sustain a 1.8-million-tonne-a-year mill feed to the on-site flotation plant. The plant will produce a high-grade rare earth mineral concentrate averaging 50% TREO. 

The project has a pretax net present value, at an 8% discount rate, of $1.8-billion and an internal rate of return of 24.6%, with after-tax payback of 3.7 years from the start of construction.