Ramaco Resources previews positive PEA for Brook rare earth mine in Wyoming

[Redator]

 Ramaco Resources (NASDAQ: METC, METCB) released on Tuesday summary results of the preliminary economic assessment (PEA) of its Brook rare earth mine in Wyoming.  

The Fluor PEA states that the project is both commercially and technologically feasible, the company said, and builds on Fluor’s earlier interim preliminary techno-economic analysis.  

The Brook mine holds what is believed to be the nation’s largest unconventional deposit of rare earth elements and critical minerals sourced from coal and carbonaceous ore. 

The results of the Brook Mine PEA outline NPV8 (net present value using an 8% discount rate) of $1.197 billion and NPV10 (net present value using a 10% discount rate) of $898 million (pre-tax) and an internal rate of return (IRR) of 38% with a total initial capital cost estimate of $473 million (excluding a 22% capital expenditure contingency). 

The results outline that based upon the current mine plan of a 2 million ton per annum production of coal that the adjusted EBITDA from the rare earth and critical mineral operation would be $134 million by 2028.  

Steady state adjusted EBITDA of $143 million would be reached by 2029 on $378 million of annual revenue. At steady state, 1,242 annual short tons of oxide are projected to be produced, which include 456 tons of gallium, germanium, scandium, terbium, dysprosium, neodymium, and praseodymium. Given the size of the Brook mine deposit, this level of both mining and processed oxide production is scalable, the company said.
 
Unlike traditional rare earth element (REE) deposits, which often involve complex, high-cost processing and the management of radioactive elements contained in the ore, the Brook mine deposit is composed of soft, friable clay and rock associated with coal and negligible radioactive elements, the company said, adding that this geological profile significantly reduces the cost and requirement for energy-intensive processing typically required in hard rock mining. 

Coal country to carbon innovation: Wyoming rare earths discovery could be a game changer for US

As a result, the project is expected to benefit from a more efficient separation and extraction process with lower capital intensity than with hard rock deposits.  

A flowsheet for the Brook mine project comprises a conventional comminution circuit, a multi-stage liberation process, followed by purification, separation, and calcination to produce separated critical mineral oxides. 

An initial mine life of 42 years is assumed in the PEA. However, the initial mine life consumes less than 4% of the estimated total mineral inventory at the Brook Mine deposit. This highlights the large-scale long-term potential of this mine to be a major domestic producer of rare earths and critical minerals. 

Initial mining activities have commenced at the Brook mine to procure representative ore for the upcoming pilot scale metallurgical testing.  

“This report marks an important milestone in Ramaco’s transition to become both a rare earth and critical mineral, as well as metallurgical coal producer. The development of our Brook Mine deposit is important not only to Ramaco but also to our country,” said Ramaco CEO Randall Atkins said in a news release. “This analysis from Fluor, an internationally recognized independent engineering firm, validates our continued pursuit of the development of this potentially valuable and nationally strategic deposit. 

“When we are in production, the Brook Mine will be one of only two domestic sources of rare earth elements,” Atkins said.  

“It will be the only domestic source of both heavy rare earth elements and critical minerals that are vital to our nation’s defense industry. Based on just the magnet rare earth oxides projected to be produced at current levels, we believe the Brook Mine would support 3-5% of total United States permanent magnet demand or more than 30% of the demand for US defense applications estimated at 10% of total US magnet metal demand.”  

The full PEA from Fluor will be available on or before July 8 on the company’s website. 

Ramaco’s stock was traded 7,180,892 times on the NASDAQ Tuesday, closing the day down 24%. Average daily trading volume is 899,018. The company has a $506.8 market capitalization.