Namibia Critical Metals and JOGMEC Conclude Agreement to Develop the Lofdal Heavy Rare Earth Project
Press Release
Namibia Critical Metals and JOGMEC Conclude Agreement to
Develop the Lofdal Heavy Rare Earth Project
• Japan Oil, Gas and Metals National Corporation (“JOGMEC”) acquires right to
earn up to 50% interest in the Lofdal Heavy Rare Earth Project for project
level investment of CDN$20,000,000
• After earn-in and completion of feasibility study, JOGMEC provided right to
acquire additional 1% interest in the Project for CDN$5,000,000 and to elect
to exclusively fund development of the Project subject to Namibia Critical
Metal’s right to maintain a 26% carried interest in the Project
• Namibia Critical Metals to act as operator during earn -in period through to
completion of Feasibility Study
Halifax, Nova Scotia January 27, 2020 – Namibia Critical Metals Inc. (“Namibia Critical
Metals” or the “Company” or “NMI” ) (TSXV:N MI) today announced that it has signed a n
agreement with Japan Oil, Gas and Metals National Corporation (“JOGMEC”) to jointly explore,
develop, exploit, refine and/or distribute mineral products from the Company’s 100% owned
Lofdal Heavy Rare Earth Project (“Project”) in northwestern Namibia. The agreement provides
JOGMEC with the right to earn a 50% interest in the Project by funding $20,000,000 in
exploration and development expenditures. Once JOGMEC has completed and exercised its
50% earn-in and a feasibility study has been completed on the Project, JOGMEC has the right
to purchase an additional 1% interest in the Project from the Company for $5,000,000 and
thereafter to exclusively provide funding to develop the Project subject to the Company ’s
interest in the Project not being diluted below 26%. All amounts are in Canadian dollars.
Pine van Wyk, Chief Executive Officer of Namibia Critical Metals stated “This partnership with
JOGMEC brings strong technical and financial capacities to move the Lofdal project forward.
It provides alignment with, and access to significant industrial groups in Japan looking to
secure long-term supplies of dysprosium, terbium and other heavy rare earths. It should also
be noted that this agreement is structured such that no equity will be issued and is totally
non-dilutive to NMI shareholders. JOGMEC is mandated to seek a stable supply of natural
resources for Japan and we are delighted that they have recognized the potential of Lofdal.
Agreement Details
The agreement with JOGMEC contemplates that the Company’s Lofdal rare earth project will
be held in a subsidiary of the Company (“ProjectCo”) and JOGMEC will have the right to earn
up to a 50% interest in ProjectCo by contributing a total of $20,000,000 to exploration and
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development expenditures on the Project in three phases. JOGMEC has the right to accelerate
funding at any point during the earn-in period.
During the first term of the earn-in, JOGMEC will contribute $3,000,000 to ProjectCo to fund
exploration expenditures on the Project during the period commencing on the effective date
of the agreement and ending March 31, 2021. The first term funding amount is a firm non-
refundable commitment by JOGMEC and JOGMEC earns no interest in ProjectCo for completing
the first term expenditures.
Upon completion of the first term expendi tures, JOGMEC is enti tled to elect to contribute
$7,000,000 to ProjectCo to fund exploration expenditures on the Project during the second
term period commencing on April 1, 2021 and ending March 31, 2024.
Upon completion of the second term expenditures, JOGMEC is entitled to receive 40% of the
shares of ProjectCo and to elect to contribute $ 10,000,000 to ProjectCo to fund exploration
expenditures on the Project during the third term period commencing on April 1, 202 4 and
ending March 31, 2028. If JOGMEC elects not to provide the third term funding, the Company
has the right to acquire JOGMEC’s 40% interest in ProjectCo for $7,000,000. Upon completion
of the third term funding, JOGMEC is entitled to receive an additional 10% of the shares of
ProjectCo.
After completion of the earn in expenditures and a feasibility study on the Project, JOGMEC is
entitled to increase it s ownership in ProjectCo to 51% by acquiring an additional 1% of
ProjectCo from the Company for $5,000,000. JOGMEC is also entitled to elect to exclusively
fund development of the Project provided that the Company’s interest will not be diluted below
26%. If JOGMEC has acquired the additional 1%, the Company will pay JOGMEC $5,000,000
for the dilution protection.
Exploration programs and budgets will be approved by a management committee established
by the parties and Namibia Critical Metals will undertake the exploration programs as operator
for ProjectCo.
Overview of the Lofdal Heavy Rare Earth Project
The Lofdal Heavy Rare Earths Project is the most advanced project in the Company and
comprises Exclusive Prospecting Licence (“EPL”) 3400, located 450 kilometers northwest of
the capital city of Windhoek, and approximately 25 kilometers northwest of the to wn of
Khorixas in the Kunene Region of north-western Namibia (Figure 1). EPL 3400 covers a total
of 314 square kilometers centered on the Lofdal carbonatite complex which hosts a number
of rare earth occurrences, including the Area 4 deposit.
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Figure 1 - Company p roject areas in Namibia highlighting location of the Lofdal
Heavy Rare Earth Project near Khorixas
Mineral Resources and Significance of Xenotime Mineralization
Current mineral resources at t he Area 4 deposit are estimated to be 2.88 Mt of Ind icated
mineral resources at a grade of 0.32% TREO 1 yielding 9,230 t of REO, of which 7,050 t are
estimated to be Heavy Rare Earth oxides ("HREO”) and 3.28 Mt of Inferred mineral resources
at a grade of 0.27% TREO yielding 8,970 t of REO, of which 6,700 t a re estimated to be
HREO1.
1 “TREO” refers to total rare earth oxides; “HREO” refers to heavy rare earth oxides; “heavy rare earths” as used in
all Company presentations comprise europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho),
erbium (Er), thulium (Tm), ytterbium (Yb), lutetium (Lu) and yttrium (Y). Light rare earths comprise lanthanum (La),
cerium (Ce), praseodymium (Pr), neodymium (Nd) and samarium (Sm). "Heavy rare earth enrichment” is the ratio
of HREO:TREO, expressed as a percentage
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Mineralization at Area 4 is unique in that the rare earth mineralogy is dominated by the heavy
rare earth mineral xenotime. Xenotime was the world’s historic source of heavy rare earths,
primarily derived from heavy mineral sands deposits and separated usi ng classical solvent
extraction processing technology. Global sources of heavy rare earths are now derived from
surficial ionic clay deposits in southern China. The only other primary xenotime deposit in the
world is Browns Range in Australia, which is ope rated by Northern Minerals Ltd. and is
currently in the pilot plant production phase targeting a production rate of 49 tonnes per
annum dysprosium oxide. Northern Minerals has recently entered into off -take agreements
with Thyssenkrupp Materials Trading Gmbh for 100% of the pilot plant phase production.
Significance of Dysprosium Supply to Japan
Japan is the most important consumer of dysprosium outside of China. Adamas Intelligence
estimates that from 2013 through 2017 China produ ced 98% of the global supply of
dysprosium and was responsible for approximately 90% of global dysprosium oxide (or oxide
equivalent) consumption each year. Japan was responsible for 9% of global consumption and
other nations (including the United States) for 1%. With 2017 dysprosium production
estimated at 1,500 tonnes, Japanese consumption is therefore estimated at 135 tonnes per
annum.
About Japan Oil, Gas and Metals National Corporation (JOGMEC)
JOGMEC is a Japanese government independent administrative agency which among other
things seeks to secure stable resource supply for Japan. JOGMEC has a strong reputation as
a long term, strategic partner in mineral projects globally. The mandated areas of
responsibilities within JOGMEC relate to oil and natural gas, metals, coal and geothermal
energy. JOGMEC facilitates opportunities with Japanese private companies to secure supply
of natural resources for the benefit of the country’s economic development.
Rare earths are of critical importance to Japanese industrial interests and JOGMEC has
extensive experience with all aspects of the sector. JOGMEC provid ed Lynas with
US$250,000,000 in loans and equity in 2011 to ensure supplies of these crucial metals to
Japanese industry.
About Namibia Critical Metals Inc.
Namibia Critical Metals Inc. holds a diversified portfolio of exploration and advanced stage
projects in the country of Namibia (Figure 1) focused on the development of sustainable and
ethical sources of metals for the battery, electric vehicle and associated industries. The
Company also has significant land positions in areas favourable for gold mineralization.
At the Erongo Project, stratigraphic equivalents to the sediments hosting the recent Osino
gold discovery at Twin Hills have been identified but not yet sampled. Detailed soil surveys
are planned over this highly prospective area.
In addition to Lofdal, the Epembe Tantalum-Niobium Project is also at an advanced stage
with a well -defined, 10 km long carbonatite dyke that has been delineated by detailed
mapping with over 11,000 meters of drilling . P reliminary mineralogical and metallurgical
studies including sorting tests (XRT), indicate the potential for significant physical upgrading.
Further work will be undertaken to advance the project to a preliminary economic assessment
stage.
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The Kunene Cobalt-Copper Project comprises a very large area of favorable stratigraphy
(“the DOF”) along strike to the west of the Opuwo Co-Cu-Zn deposit. Secondary copper
mineralization over a wide area points to preliminary evidence of a regional -scale
hydrothermal system. Exploration targets on EPLs held in the Kunene project comprise direct
extensions of the DOF style mineralization to the west, sediment -hosted cobalt and copper,
orogenic copper, and stratabound Mn and Zn-Pb mineralization.
Earlier stage projects include the Grootfontein Project which has potential for magmatic
Cu-Ni mineralization, Mississippi Valley -type Zn-Pb-V mineralization and Otjikoto -style gold
mineralization.
The common shares of Namibia Critical Metals Inc. trade on the TSX Venture Exchange under
the symbol “NMI”.
Board Change
The Company also announced today that Janice Stairs ha s resigned as a director of the
Company and Don Burton, President of the Company, has been appointed a director effective
immediately.
Donald M. Burton, P.Geo. and President of Namibia Critical Metals Inc., is the Company’s
Qualified Person and has reviewed and approved this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
For more information please contact -
Namibia Critical Metals Inc.
Don Burton, President
Tel: +01 (902) 835-8760
Fax: +01 (902) 835-8761
Email: [email protected]
Web site: www.NamibiaCriticalMetals.com
The foregoing information may contain forward -looking information relating to the future performance of Namibia Rare Earths Inc. Forward -
looking information, specifically, that concerning future performance, is subject to certain risks and uncertainties, and actual results may differ
materially. These risks and uncertainties are detailed from time to time in the Company's filings with the appropriate securities commissions.
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