Namibia Critical Metals Inc. files NI 43-101 Preliminary Economic Assessment Report for the significantly expanded Lofdal Heavy Rare Earth Project “2B-4” on SEDAR
Press Release
Namibia Critical Metals Inc. files NI 43-101 Preliminary
Economic Assessment Report for the significantly expanded
Lofdal Heavy Rare Earth Project “2B-4” on SEDAR
Halifax, Nova Scotia November 14, 2022 – Namibia Critical Metals Inc. (“Namibia Critical
Metals” or the “Company” or “NMI”) (TSXV: NMI OTCQ: NMREF) is pleased to announce that
the updated NI 43-101 Preliminary Economic Assessment (“PEA”) for the Lofdal Heavy Rare
Earth Project “2B-4” (“Lofdal” or the “Project”) in Namibia has been filed on SEDAR.
The Lofdal deposit has the potential for significant production of dysprosium and terbium, two
of the most valuable heavy rare earth elements. The Project is being developed in joint
venture with Japan Oil, Gas and Met als National Corporation (“JOGMEC”) targeting a long
term, sustainable supply of heavy rare earths to Japan.
Darrin Campbell, President of Namibia Critical Metals stated:
“This is a major value inflection point for the Lofdal project with a robust economic assessment
which is based on mining only 50% of the resource. We have already commenced work in
moving into the Pre-Feasibility Study stage for the large “2B -4” project and look forward to
continued rapid development of Lofdal with our JOGMEC partners. This is a major step forward
in establishing Lofdal as a world -class heavy rare earth project and a globally significant
potential supplier of dysprosium and terbium, the two most valuable rare earth metals.”
As previously reported on October 3, 2022, the NI 43 -101 compliant report entitled
Preliminary Economic Assessment on the Lofdal Heavy Rare Earths 2B -4 Project, Namibia
(“the Report”) was independently prepared by SGS Canada Inc. as the principal author under
the supervision of Michael Archer who is a Qualified Person in accordance with NI 43-101 –
Standards of Disclosure for Mineral Projects.
PEA Highlights:
- Net Present Value – NPV (5) of US$632.7 million (pre-tax) and US$391 million after-
tax
- Internal Rate of Return (IRR) – 34% pre-tax and 28% after-tax
- Life of mine nominal cash flow of US$1.1 billion pre-tax, US$698.7 million after-tax
- Initial Capital Costs - US$207 million including a 30% contingency
- Capital Payback Period – 3.2 years after-tax
- Approximate Average Annual Production – 2,000 tonnes TREO including 117 tonnes
dysprosium and 17.5 tonnes terbium
- PEA is based on mining of only 26 million tonnes resource or about 50% of the 53
million tonnes in the Mineral Resource Estimate issued in June 2021
- Estimated 16-year mine life with 13 million tonnes of low-grade stockpile likely
expanding the life of mine
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- The price for Rare Earth Oxides used: Dysprosium oxide US$587/kg and terbium
oxide US$2,493/kg.
- Average basket price of US$91/kg including third party separation costs
Cautionary Note: The preliminary economic assessment is preliminary in nature and includes inferred mineral
resources that are considered too speculative geologically to have the economic considerations applied to them to
enable them to be categorized as mineral reserves and there is no certainty that the preliminary economic
assessment will be realized. Mineral resources that are not mineral reserves do not have a demonstrated economic
viability
Economic Analysis
The eco nomic analysis assumes that the Project will be 100% equity financed and uses
parameters relevant as of September 2022, under conditions likely to be applicable to project
development and operation and analyzes the sensitivity of the Project to changes in the key
Project parameters. All costs have been presented in United States Dollars (US$) and
wherever applicable conversion from South African Rand (ZAR) has utilized an exchange ratio
(ZAR/US$) of 16.07.
Mining and treatment data, capital cost estimates and operating cost estimates have been
put into a base case financial model to calculate the IRR and NPV based on calculated Project
after tax cash flows. The scope of the financial model has been restricted to the Project level
and as such, the effects of interest charges and financing have been excluded.
For the purposes of the PEA, the evaluation is based on 100% of the Project cash flows before
distribution of profits to the equity owners. Both pre-tax and after-tax cash flows have taken
5% royalty payments into account.
At a discount rate of 5% the Project is anticipated to yield a pre -tax IRR of 34% with a NPV
of US$632,739,693, and an after-tax IRR of 28% with a NPV of US$390,982,730. Cumulative
cash flows are US$ 1,110,393,637 pre-tax and US$ 698,691,741 after-tax over the sixteen
year LOM .
The Project is expected to pay back initial capital within the first 3.2 years.
Rainer Ellmies, PhD, MScGeol, EurGeol, AusIMM and Vice President of Namibia Critical Metals
Inc., is the Company’s Qualified Person and has reviewed and approved this press release.
About Namibia Critical Metals Inc.
Namibia Critical Metals Inc. holds a diversified portfolio of exploration and advanced stage
projects in Namibia focused on the development of sustainable and ethical sources of metals
for the battery, electric vehicle and associated industries.
Heavy Ra re Earth: The Lofdal Dysprosium -Terbium Project is the Company’s most
advanced project being fully permitted with a Mining Licence (ML 200) issued in 2021. The
project is being developed in joint venture with Japan Oil, Gas and Metals National Corporation
(“JOGMEC”).
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About Japan Oil, Gas and Metals National Corporation (JOGMEC) and the JV
JOGMEC is a Japanese government independent administrative agency which seeks to secure
stable resource supplies for Japan. JOGMEC has a strong reputation as a long term, strategic
partner in mineral projects globally. JOGMEC facilitates opportunities with Japanese private
companies to secure suppl ies 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 provided Lynas with
US$250,000,000 in loans and equity in 2011 to ensure supplies of the Light Ra re Earths
metals suite to the Japanese industry.
Namibia Critical Metals owns a 95% interest in the Lofdal project with the remaining 5% held
for the benefit of historically disadvantaged Namibians. The terms of the JOGMEC joint
venture agreement with the Company stipulate that JOGMEC provides C$3,000,000 in Term
1 and C$7,000,000 in Term 2 to earn a 40% interest in the Lofdal project. Term 3 calls for a
further C$10,000,000 of expenditures to earn an additional 10% interest. JOGMEC can also
purchase another 1% for C$5,000,000 and has first right of refusal to fully fund the project
through to commercial production and to purchase all production at market prices. The
collective interests of NMI and historically disadvantaged Namibians cannot be diluted below
a 26% carried working interest upon payment of C$5,000,000 to JOGMEC for the dilution
protection. The JV Agreement is structured such that no NMI equity will be issued and it is
totally non-dilutive to NMI shareholders. To date, JOGMEC, has approved funding Term 1 and
2 expenditures totaling C$8,875,000.
Other exploration projects : The Company’s Exclusive Prospecting Licenses (“EPLs”)
prospective for gold are located in the Central Namibian Gold Belt which hosts a number of
significant orogenic gold deposits including the Navachab Gold Mine, the Otjikoto Gold Mine
and the Twin Hills deposit. At the Erongo Gold Project, stratigraphic equivalents to the meta-
sediments hosting the Osino gold discovery at Twin Hills have been identified and exploration
is progressing over this highly prospective area. The Grootfontein Base Metal and Gold
Project has potential for magmatic copper-nickel mineralization, Mississippi Valley-type zinc-
lead-vanadium mineralization and Otjikoto -style gold mineralization. Interpretation of
geophysical data and regional geochemical soil sampling have identified first gold targets.
The common shares of Namibia Critical Metals Inc. trade on the TSX Venture Exchange under
the symbol “NMI”.
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.
Darrin Campbell, President
Tel: +01 (902) 835-8760
Email: [email protected] Web site: www.NamibiaCriticalMetals.com
The foregoing information may contain forward-looking information relating to the future performance of Namibia Critical Metals 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.