Could you introduce Namibia Critical Metals?

Namibia Critical Metals is a TSXV-listed company active in Namibia since 2011. Previously, we were known as Namibia Rare Earths, a spinout from our predecessor company, Etruscan Resources. Etruscan brought three West African greenfield gold projects to commercial production and ultimately sold them to Endeavour Mining. We held on to the Lodfdal rare earth project, which we have developed into world class heavy rare earth project. We also have a large portfolio of critical and precious metals in Namibia, but currently, we are laser-focused on the tier-one Lofdal deposit.

What makes the Lofdal heavy rare earth project unique?

Lofdal is a dysprosium and terbium deposit and one of only two xenotime-type heavy rare earth deposits under development in the world, as far as we are aware. We put out a maiden resource in 2012, and an initial PEA two years later, but it was the work done in the last two years that established Lofdal as one of the richest dysprosium and terbium deposits in the world, outside of China. After a significant drilling campaign in 2020, we increased the size of our resource from 6 million t to an astonishing 53 million t, with 4.7 million kg of contained dysprosium and 725,000 kg of terbium.

Dysprosium and terbium, alongside neodymium and praseodymium (NdPr), are required in the making of permanent magnets for EV motors, dysprosium being one of the most valuable. Historically, China has had a stronghold on this market. Japan is way ahead of other Western economies in terms of limiting that overwhelming dependence on China, but North America and Europe are starting to catch up in the scramble to wean off from Chinese supply.

Could you elaborate on what the JV agreement with the Japanese state agency JOGMEC entails?

In 2020, we entered a transformational transaction with the Japan Organization for Metals and Energy Security (JOGMEC), a state agency with an annual budget of more than US$15 billion and a mandate to secure supply of natural resources for Japanese industry. Under the JV agreement, JOGMEC can fund C$20 million in exploration and development, with the right to earn a 50% interest in Lofdal. We are now currently at C$8 million out of the total amount. JOGMEC can also purchase another 1% for a controlling stake, at which stage we can either participate at 49% or dilute to a carried working interest of no less than 26%. Besides securing project financing possibly with no further dilution for our shareholders, through this transaction we are also receiving an operator fee that covers many of our overheads. A decade ago, JOGMEC did a similar JV with a little-known rare earth Australian explorer that is now the largest rare earth company in the world, Lynas Rare Earths.

Can you briefly outline Namibia Critical Metals’ shareholder structure?

We have a tightly held stock, of about 196 million shares outstanding and 215 fully diluted. Since May this year, our largest single shareholder is Bannerman Energy, owning 42%. The directors and officers own another 24%.

What can you tell us about operating in Namibia?

Namibia is probably the best African jurisdiction, coming second place in the continent within the 2021 Fraser Institute Survey of Mining Companies Report. The country remains widely under explored, but I believe it will receive more attention, especially after having just surpassed Canada as one of the world’s top exporters of uranium. We have established very strong relationships with both the government and the nearby community, called Khorixas. We have made a concerted effort to hire locally and invest in mutual infrastructure. Namibia Critical Metals has been doing CSR work before it was known as CSR. For example, we have been sponsoring the Khorixas orphanage since 2008.

What are the next steps for Namibia Critical Metals?

As a result of the 2020 drilling program and in conjunction with the issuance of a 25-year mining license by the Namibian government, we have updated the PEA and are starting down the path of a PFS study. We believe we will be able to accelerate through the PFS stage quickly and cost-effectively by leveraging the PFS-level quality work we have done for the PEA. We expect to publish the PFS in the next 12 months and then progress to the DFS and a construction decision.