Nechalacho

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    Exploration has been underway at the Nechalacho site for 50 years. Here, the Aurora shines over the 40-person camp.

    A REE mine to supply the world

    In the summer of 1983, Chris Pedersen was prospecting for signs of beryllium, much in demand as a space-age alloy metal. As he scoured the ancient Canadian Shield along the north shore of Great Slave Lake, a few flecks of shiny mica caught his eye. It wasn’t beryllium, but it signalled there might be something worth taking a closer look at.

    As he scraped away the moss and lichen, Pederson uncovered a massive quartz vein that, decades later, would prove to host the Nechalacho mine, one of the world’s richest rare earth element (REE) deposits. “This was the outcrop that got it all going. It just basically goes to show you what a treasure trove this deposit is,” says Pedersen, who remains a senior consulting geologist to Cheetah Resources Corp., the mining and processing company that is rapidly gaining ground in a global race to supply these critical minerals. 

    This past summer, Cheetah’s team of about 60 men and women opened up Nechalacho’s vast open-pit quartz seam, blasting and stockpiling 600,000 tonnes of rock hosting the reddish, rare-earth ore called bastnaesite. They’re using some of the mining world’s most advanced, environmentally friendly technology to separate that ore from the host quartz, and this fall, shipped the first concentrated ore south for further processing. 

    Cheetah has also invested in earning the confidence of nearby communities, workers, businesses and Indigenous groups, essential components of securing long-term mining licences in the NWT’s rigorous permitting system. It’s the first season of a three-year demonstration project to prove the NWT and Canada can supply the volume, and purity, needed to be a reliable supplier and a decades-long producer. 

    Why mine REE? 

    What makes these so-called rare earth elements (REE) so valuable? For starters, take our smart phones, cars, and wind generators. They all need a few of the 17 different REE, with exotic-sounding names like yttrium and europium (for computer screens), lanthanum (for high-performance batteries and camera lenses) and neodymium and praseodymium to make the permanent super-magnets essential for electric vehicles, wind turbines and computer hard drives. 

    Almost every gadget in our high-tech modern world needs them, creating a technology-driven surge forecasted to expand five-fold over the next decade. The urgency to meet this tidal wave of demand has been triggered by one country: China. It has steadily developed its own large but low grade REE deposits and, with its cheaper environmental and labour standards and pricing, has control of some 80 per cent of global supply. The rest of the world is accelerating their own REE deposits and refining capacity. 

    While they might be called rare, these elements are widely, but sparsely sprinkled around the world. The trick is finding deposits concentrated enough to be technically and profitably mined. Metallurgy is another challenge; unlike a gold mine that gets its product straight away, REEs are stubbornly bound together, requiring up to several complex processes to separate raw ore into the 99.9+ per cent-pure oxides demanded by industry. 

    History and progress 

    The Nechalacho story began 50 years ago, when a uranium/beryllium exploration rush swept across the NWT. Canadian senior miner, Falconbridge, was the first to stake ground around tiny Thor Lake, 110 kilometres southeast of Yellowknife. Several operators subsequently picked up the ground, probing its diverse but poor economic chances. Then in 1995, Avalon Ventures (now Avalon Advanced Materials), a Canadian start-up explorer focussed on emerging new technologies, uncovered its REE potential, spending $100 million over a decade proving just what, and how much, was at Nechalacho. 

    Cut short by the world-wide depression of the late 2000s, Avalon’s plans for a mammoth $1 billion development were mothballed. Then in 2018, Vital Metals Ltd., a publicly traded Australian mining company already at work on a REE deposit in Tanzania (hence the African name of its subsidiary, Cheetah Resources) scouted Nechalacho from among hundreds around the world as a prime target. Vital cut a deal with Avalon to develop several proven REE zones and used its Cheetah Resources business model to get the wheels turning. 

    “Cheetah’s strategy to bring Nechalacho to market is quite a contrast to most other big scale Northern projects,” says David Connelly, Cheetah’s Vice president of Strategy and Corporate Affairs, at its downtown Yellowknife office. “Nechalacho is starting small and is heavily focussed on increasing meaningful Indigenous participation and minimizing environmental impact,” he says. “We’re committed to making a big difference to the northern economy and workforce.” 

    Cheetah’s backing this up, boasting that more than 70 per cent of its current 60-strong workforce is from eight different NWT Indigenous groups, besting by a wide margin the already impressive ratios from the NWT’s diamond mines. 

    The same focus reaches deep into the northern business community. Cheetah contracted Det’on Cho Nahanni Construction Ltd., majority owned by the Yellowknives Dene First Nation, to do the initial 600,000 tonne bulk mining. “It’s the only mining project we know of in Canada to hire an Indigenous-owned company to run the mining on its own traditional territory,” says Paul Gruner, President and CEO of the Det’on Cho Corporation. He added there have also been discussions between the First Nation and Cheetah Resources about taking an equity stake in the project. 

    What also sets Nechalacho apart is its decidedly small environmental footprint. Its primary beneficiation (sorting) process uses no water or chemicals; the only left-over is the dry, benign host rock. It does this with the German-built TOMRA sensor-based sorter, a compact machine that fits into an easy-transported seacan. X-ray sensors pick out crushed red bastnaesite pebbles, then fire an array of small air jets to nudge the ore pebbles onto one conveyor belt and into shipping bags; a second conveyor takes the leftover quartz to another pile for use on roads and other infrastructure. 

    The machine is fully computerized, run by a single operator. To date, four sensor operators — all Indigenous, including Cheetah’s first female operator — have been trained. In further recognition that the project is on traditional lands, Cheetah invited Yellowknives First Nation councillors to help commission the sorter in a drum ceremony in mid-July. The 2021 season’s final milestone was the shipping by barge of over 1,000 tonnes of separated ore across Great Slave Lake to Hay River, for transhipping to Saskatoon, Saskatchewan. There, Cheetah is building and will operate a processing facility to further refine the bastnaesite concentrate into a rare earth carbonate. It has already secured a five-year, 1,000 tonne annual commitment to supply Norway’s REEtec for final refining. 

    Yellowknives Dene First Nation delegates helped commission the Tomra sensor-based sorter on July 21, 2021. Dene Drummers sang a prayer song on the sorter’s catwalk.

    Cheetah’s total commitment to Nechalacho and Saskatoon is upwards of $40 million, says Executive Vice President Matthew Edler. That’s on top of some $120 million in historic spending by previous owners, proof that starting a mine in the North is not for the faint of heart. 

    While Nechalacho is, for now, a seasonal demonstration project, it holds potential to be a year-round producer generating 150 jobs. Anchoring that optimism is that exploratory winter drilling at the neighbouring Tardif zones has recently proven much larger deposits, along with anticipation that the mine plan can be successfully permitted and leased. “It has given us great confidence for the potential of Nechalacho to be built into a large-scale, long-life rare earths operation,” says Vital’s managing director, Geoff Atkins, in an August 3, 2021, drilling update. 

    Vital isn’t stopping there. Just days later, it released news that it has committed $8 million over five years to acquire controlling rights in two heavy rare earth projects at the Kipawa and Zeus properties in western Quebec. “[This] acquisition will provide Cheetah with multiple sources of feedstock for its processing facility in Saskatoon and has potential to transform Vital into the only producer of both light and heavy rare earths* in North America,” says Vital’s news release. 

    The NWT, once blessed with four lucrative diamond mines opening over the past 30 years, is now facing a grim economic future as they approach their end. As overall mineral exploration has withered, it’s been a decades-long drought of other mines. Nechalacho’s progress is giving a small but much needed boost to diversifying the territories’ portfolio, and to securing a new source of much-needed strategic elements for the world. As the Financial Times recently noted, it has the potential to make the NWT the cornerstone of the critical minerals industry in North America. 

    https://vitalmetals.com.au/

    https://cheetahresources.com/

    Bill Braden is a freelance photographer and business writer based in Yellowknife. He has produced several books on northern projects and infrastructure, and the aurora borealis. 

    VIABill Braden
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