REG - Harena Rare Earths - Completion of Pre-Feasibility Study
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RNS Number : 3228Q Harena Rare Earths PLC 26 January 2026
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26 January 2026
Harena Rare Earths Plc
("Harena" or the "Company")
Completion of Pre-Feasibility Study Advances the Ampasindava Rare Earth
Project
Harena Rare Earths Plc (LSE: HREE) (OTCQB: CRMNF), the rare earths company focused on the Ampasindava ionic clay rare earth project in Madagascar (the "Ampasindava Project"), is pleased to announce the highlights from its completed pre-feasibility study ("PFS"). The PFS represents an important advancement in the development of the Ampasindava Project, confirming its technical viability and providing a robust economic and operational framework to support the next phase of project progression.
The PFS was compiled by the Company with leading global engineering group SGS engaged to support technical inputs to the PFS and also to conduct an update of the 2023 Mineral Resource Estimate to JORC 2012 standard.
PFS HIGHLIGHTS
Robust technical and economic viability for long life heap leach operation
• Total rare earth oxide (TREO(1)) of ~71kt, over a measured 20-year life of
mine (LOM)
• Plant throughput set at 5Mtpa (dry) at average grade at 1,500 ppm TREO
supported by independent metallurgical test work
• Pre-production capital cost estimate of US$142 million, including 25% in EPCM
(engineering, procurement and construction management) and funding costs
• Annual TREO production estimate of 4,000 tonnes per year
° Annual oxide (NdPr + DyTb) production of 1,700t per year (29,670t for 20
years)
° Ratio of magnetic rare earth oxide (Magnet REO(2)) yielded to TREO despatched
at 41%
Excellent economic returns modelled using analyst sourced long term pricing
• Undiscounted LOM free cashflow of US$1.0 billion post-tax
• Pre Tax NPV(10) of US$343.7 million
• Pre Tax IRR of 34%
• Post Tax NPV(10) of US$249.6 million
• Post Tax IRR of 30%
• Payback period of 4 years
Outstanding financial metrics based on current publicly sourced consensus rare
earth pricing
• Undiscounted LOM free cashflow of US$2.6 billion post-tax
• Pre Tax NPV(10) of US$616.1 million
• Pre Tax IRR of 30% ((Consensus pricing more optimistic in later years))
• Post Tax NPV10 of US$464.3 million
• Post Tax IRR of 27%
• Payback period of 5 years
Economic outcome summary
The Company has modelled the Ampasindava Project's economics using two sets of
rare earth oxide price forecasts. The base case uses a price deck sourced from
a recognised Minerals Analyst for the years between 2025 and 2044. The
Consensus Price deck is sourced using artificial intelligence (AI)
applications that scrape web information on publicly available REO pricing
forecasts between 2030 and 2049. In addition, the Company has modelled a
situation, called Ampas Plus, using the base case price deck with a 10%
reduction in opex and capex applied throughout.
Pre Tax 20 Yr NPV(10) and IRR NPV(10) IRR Payback
Base Case using Long-term Analyst Prices USD 349 m 34% 4 Yrs
Base Case using Current AI Consensus Prices USD 616 m 30% 5 Yrs*
Ampas Plus - Opex and Capex Savings USD 439 m 41% 3 Yrs
Post Tax 20 Yr NPV10 and IRR NPV10 IRR Payback
Base Case using Analyst Prices USD 249 m 30% 3 Yrs
Artificial Intelligence Consensus Prices USD 464 m 27% 6 Yrs*
Ampas Plus - Opex and Capex Savings USD 327 m 36% 3 Yrs
* Consensus pricing more optimistic in later years
1. All references to Oxides are based on the contained level of those Oxides
within the MREC product, noting the TREO contains La2O3 + CeO2 +Pr6O11 + Nd2O3
+ Sm2O3 + Eu2O3 + Gd2O3 + Tb4O7 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 +
Lu2O3 + Y2O3
2. Magnetic Rare Earth Oxides (Magnetic REO) = Pr6O11 + Nd2O3 + Tb4O7 + Dy2O3
20 Year Prices forecast sourced from AI tools scraping web information on REO
pricing forecasts
Ampasindava Project rapidly advancing and progressively de-risked
• Planning for a phased "Proof of Concept" plant at site is underway:
° Initial establishment of a permanent on-site laboratory
° Establishment of on-site test cribs and columns
° Opportunity to optimise flowsheet and test downstream rare earth separation at
a pilot scale
• Selection of specialists to compile DFS and upgrade PFS to reduce cost and
process risk
• Commence targeted cost reduction and optimisation initiatives including:
° Selection of high-grade zones for initial inclusion in mine plan
° Optimising supply chain options
Strong national government support
• Strong engagement with Malagasy national and regional governments
• Environmental and social studies continue to support permitting and local
validation
• Permitting on track to allow construction to commence in 2027
• Social programs will focus on suitable and appropriate land compensation, job
creation, education of youth, individual technical skills development, and
local business creation and readiness
Allan Mulligan, Executive Technical Director of Harena, said:
"The completion of the PFS represents a significant step forward for Harena
and the Ampasindava Project. With significant previous investment in resource
development, process testwork and environmental programs, we have an excellent
understanding of the Ampasindava Project where we can now further optimise the
asset as we move into the final piloting and studies phase.
The Ampasindava Project hosts a world-class scale ionic absorption rare earths
mineralisation, particularly amenable to low cost and high yield recoveries.
The sustainable and rapid remediation heap leach extraction model will serve
to enhance the local, regional and national economy with no lasting impacts on
the environment.
Our confidence in the results of the PFS and the underlying PFS process more
broadly is based on the enormous previous works and current understanding of
the orebody, and the inclusion of the Proof-of-Concept plant in 2026 will
allow a smooth and organised mobilisation into construction with reduced start
up risk."
Ivan Murphy, Executive Chairman of Harena, said:
"We are extremely pleased to be releasing the excellent results of this
pre-feasibility study to the market. The key metrics presented here clearly
highlight the exceptional scale, quality and strategic significance of the
Ampasindava Project, reinforcing its position as a world-class heavy rare
earth asset and marking a major milestone in its progression towards
development.
I would like to sincerely thank Allan Mulligan, our Executive Technical
Director, for his dedication over the recent months, as well as the wider
internal and external teams whose expertise and commitment have been
instrumental in delivering this important result."
SUMMARY REPORT
Introduction
Harena Rare Earths Plc is pleased to present the Pre-Feasibility Study ("PFS")
outcomes for its Ampasindava Rare Earth Ionic Clay Project (the "Ampasindava
Project" or "Project"), located in the province of Antsiranana in north
eastern Madagascar.
Harena has engaged leading global engineering group SGS to support technical
inputs to the PFS and also to conduct an update of the 2023 Mineral Resource
Estimate to JORC 2012 standard.
The compilation of the PFS has been internally managed by Harena. The initial
study was conducted in order to meet regulatory requirements for the
conversion of the Permit Research licence to a Permit Exploitation licence.
Several programs of metallurgical testwork were conducted by SGS and results
emanating from several bulk sample leaching programs have been employed into
the PFS design.
In line with international standards for feasibility studies, the PFS is
generally in line with AACE Class 4 estimates and accuracy is in range of
-30/+40. The planned on-site Proof of Concept demonstration plant will allow
these estimates to be greatly enhanced and derisked.
Key PFS Outcomes and Assumptions
The PFS confirms the robust technical and economic viability for development
of a mining and processing operation to produce a MREC product at the
Ampasindava Project.
This has included:
• An updated global Mineral Resource Estimate of 606,000 tonnes of TREO with:
° 41kt of TREO in Measured Resources,
° Indicated Resources of 156kt of TREO, and
° Inferred Resources totalling 410kt of TREO.
• The hand-sinking of 4,474 vertical test pits up to 10m deep,
• Some 31,000 pit samples across the pedolith and saprolite areas of the pits,
• A total of 277 vertical diamond drill holes,
• Maximum head grades of 2.24% TREO and a global average of 868 ppm TREO,
• Substantial metallurgical testwork with SGS and other consultants over several
years of testing, including at least two bulk sample programs,
• A range of yield payability favouring higher demand TREOs and resulting in a
nett of 75%, and
• The use of 3 to 4 concurrent satellite mining pits to ameliorate risk and
optimise grade recovery.
A summary of the physical and financial evaluation of the Project utilising a
heap leach farm with a 5.0 Mtpa throughput rate is shown in Table 1 below.
Additional details are set out below in the descriptive summary.
Table 1: Production Outcomes and Assumptions - Base Case
Parameter Unit Amount
LOM Years 20
LOM Feed M tonnes 88
LOM Waste M tonnes 13
LOM Strip Ratio Avg 1:6
LOM TREO Head Grade (static model) ppm 1,525
Total REO Feed k tonnes 134.6
Total REO Production k tonnes 71.1
Average REO Production k tonnes / annum 3.5
Average TREO Payability % 75
Total LOM Revenue US$M 4,481.7
REO Revenue US$ / kg REO 63
Magnet REO (NdPr + DyTb) Ratio in Conc. % 42%
Magnet REO Value in Conc. % 93%
Total LOM OPEX US$M 2,743
OPEX, average US$M / annum 137.1
OPEX, average US$ / tonne Ore 31.3
OPEX, average US$ / kg REO 38.5
CAPEX, upfront US$M 142
CAPEX, ongoing US$M 19
EBITDA US$M 1,502
Free Cash Flow (Post Tax) US$M 1,015
Net Present Value (Post Tax) (Real) 10% US$M 249.6
Internal Rate of Return (Real, Unlevered) IRR % 30
Payback Years 4
Mineral Resource Estimate Detail
SGS was commissioned by Harena to review and restate the 2023 MRE in
accordance with the guidelines of the JORC 2012 Code. The restated MRE issued
by SGS (Camus, 2023) summarised below has an Effective Date of 1 November
2023:
The relevance of this resource supports many important project enablers. The
fact it is an ionic clay resource leads to low capital and low operating cost
metrics. Simple, cheap salt washing is all that is required to liberate the
ionised adsorption bond of rare earth minerals from the gangue material they
are held with.
Well-structured ionic clay deposits are rare and the deposit at the
Ampasindava Project is as good as any from a global perspective.
Table 2. Mineral Resource Estimate for Ampasindava Project Deposit at
Cut-Off of 500 ppm TREO
(Classification) (Tonnage (Volume (Area (Density (Thickness (m)) (TREO (MREO (MREO / (Contained (Contained
(Mt))
(Mm3))
(Mm2))
(t/m3))
(ppm))
(ppm))
TREO
TREO
MREO
ratio)
(t))
(t))
(Total) (PED) (SAP)
(Measured) (42.5) (38.1) (7.0) (1.11) (5.46) (2.85) (2.60) (958) (221) (23%) (40,700) (9,400)
(Indicated) (184.0) (167.1) (25.0) (1.10) (6.70) (2.65) (4.04) (842) (178) (21%) (154,800) (32,700)
(Measured (226.5) (205.3) (31.9) (1.10) (6.43) (2.70) (3.73) (863) (186) (22%) (195,500) (42,100)
+ Indicated)
(Inferred) (472.0) (429.1) (78.9) (1.10) (5.44) (2.71) (2.73) (870) (189) (22%) (410,500) (89,000)
(Total) (698.5) (634.3) (110.8) (1.10) (5.72) (2.71) (3.02) (868) (188) (22%) (606,000) (131,100)
1. The Mineral Resource Estimate (MRE) has an effective date of the 1st of
November 2023. The Competent Person for the MRE is Mr. Yann Camus, P.Eng., an
employee of SGS.
2. The classification of the current Mineral Resource Estimate is consistent with
the 2012 Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (the JORC Code).
3. All figures are rounded to reflect the relative accuracy of the estimate and
numbers may not add due to rounding.
4. All Resources are presented undiluted and in situ, constrained within a 3D
model, and are considered to have reasonable prospects for eventual economic
extraction.
5. Mineral resources which are not mineral reserves do not have demonstrated
economic viability. An Inferred Mineral Resource has a lower level of
confidence than that applying to an Indicated Mineral Resource and must not be
converted to a Mineral Reserve. It is reasonably expected that the majority of
Inferred Mineral Resources could be upgraded to Indicated Mineral Resources
with continued exploration.
6. Bulk density values were determined based on physical test work from each part
of the deposit.
7. The base cut-off grade (500ppm) TREO considers a mining cost of US$1.40/t
mined, processing cost of US$8.00/t mined, and G&A cost of US$0.75/t
mined.
8. TREO =
Y2O3+Eu2O3+Gd2O3+Tb2O3+Dy2O3+Ho2O3+Er2O3+Tm2O3+Yb2O3+Lu2O3+La2O3+Ce2O3+Pr2O3+Nd2O3+Sm2O3
9. MREO = Pr2O3+Nd2O3+Tb2O3+Dy2O3
10. The estimate of Mineral Resources may be materially affected by environmental,
permitting, legal, title, taxation, socio-political, marketing, or other
relevant issues.
Important note:
The Company advises that the PFS is based on the JORC 2012 Mineral Resource
Estimate, however, a Mineral Reserve has not yet been estimated. There is no
certainty that further economic assessment will result in the eventual
conversion of Mineral Resources to Ore Reserves or that the production target
itself, assumptions used in the Study and resulting economic outcomes will be
realised. The stated production target is based on the Company's current
expectations of future results or events and should not be solely relied upon
by investors when making investment decisions. Further evaluation work and
appropriate studies are required to establish sufficient confidence that this
target will be met. Engineering studies and estimates including peer works
support capital and operating cost estimates and are based on standard
extraction and processing techniques. Non‐binding discussions are underway
with interested parties for offtake of planned production. Discussions with
third party infrastructure providers are underway. Extensive environmental
baseline studies have been completed and no social, environmental, legal or
regulatory impediments to development have been identified. The
Pre-Feasibility Study is based on 100% of Measured and Indicated Resource. A
Mineral Reserve has not been estimated at this time.
Project Design and Philosophy
The Ampasindava Project is a large-scale, long-life, REE Project in north
eastern Madagascar. REE will be extracted from a 20 km long near surface ionic
adsorption clay ore-body spanning the peninsular of Ampasindava in the
province of Antsiranana in northern Madagascar. According to the PFS,
commencing at 2.5 million tonnes treated per annum, by year 5, the Project
will be processing 5 million tonnes of ionic adsorption clay ore through two
process plant modules producing an estimated 4,000 tonnes of TREO despatched
as 6,700 tonnes of mixed rare earth carbonate concentrate (MREC) at 60% per
annum with an annual value of approximately US$250 million.
Some 88 million dry tonnes of ionic clay ore are expected to be processed,
extracted and returned to the mine cavities over the 20+ year Project life.
The Project is expected to deliver estimated gross royalty payments to
Madagascar of US$220 million plus corporate tax contributions of US$320
million over its life based upon the existing JORC Mineral Resource Estimate
(MRE) as of November 2023.
The proposed mining and processing sequence which is labelled "A rapid
remediation, zero harm mining system", returns neutral and non-toxic clays
back to the mining cavity within a very short timeframe, allowing for land
re-use or natural rehabilitation to occur. The system involves:
• Operating from 3 or 4 concurrent satellite mining pits within the mining zone
• Removal and temporary storage of a 0.6m thick surface layer of topsoil that
will be replaced following complete backfill of the mining pit
• Removal of an average 5-6 metre layer of ionic-adsorption REE clay ore using
truck and shovel and hauling this material to the process plant
• Transport of the material to a ring-fenced leaching farm which is
environmentally isolated from natural water courses and the effects of
excessive rainfall
• Agglomerating the ionic-adsorption REE clay to increase its permeability
before placing it in 3m high stacks on top of an impermeable lining
• Placing mobile irrigating pipe systems on the heaps
• Desorbing the ionically adsorbed REE first into natural sea water and then
into an ammonium sulphate lixiviant at pH 4 that is percolated through the
clay-ore heap onto the HDPE liner which directs it to a process liquor pond
• Concentrating the REE within the ammonium sulphate lixiviant via an ion
exchange process in a nano filtration membrane circuit. This step will
consequently produce large volumes of clean and neutral water that will be
available for use as process water, dust control and irrigation of crops
• Returning the "spent-ore" to the mining pit once the REE has been desorbed
from the clay and residual ammonium sulphate has been washed out
• Returning the overburden to the mining pit which in combination with the
returned "spent-ore" will completely fill the mining void.
The full mining, processing and rehabilitation cycle is expected to be about 3
months and the moving mining footprint will be similar to the area disturbed
by 3 months of mining which will be between 10 and 15 hectares.
The Project will preferentially employ local people with the appropriate
skills and qualifications over the life of the Project and expects that almost
all the 400-person workforce will be Malagasy by Year 5. Adult skills training
and a focus on education support will develop local capacity and facilitate
employment of local people including women into technical and managerial roles
with the Project.
A comprehensive Environmental and Social Impact Assessment (ESIA) of the
Project is being undertaken in accordance with Office of Natural Environment
(ONE) requirements and following IFC standard best practices. The social
program and procurement strategy is based on the mantra - Local First,
Regional Second and National and International Third. The intention is to
create sources of income and wealth centres for local, impoverished Malagasy
and secure a sense of local ownership of the Project. This inspires
commitment, protection and self-interest to protect and uplift the project.
Process Recovery Methods
Ionic adsorption clay deposits are known for their relatively simple low
capital processing arrangements. REE adsorbed onto clays are simply desorbed
using an ion-exchange-based elution process with eluants such as sodium
chloride or ammonium sulphate.
Ore is agglomerated at the ROM pad before being stacked in heaps of 80m width
and 240m length on a sealed impervious layered heap foundation. There will be
26 of these heaps for a 5 Mtpa production cycle.
Heaps are 3m high but can sometimes be built higher to increase production.
Drip irrigation is used to minimize evaporation, provide more uniform
distribution of the leach solution, and avoid damaging the exposed mineral.
The solution then percolates through the heap and desorbs both the target and
other minerals. This process, called the "leach cycle," generally takes from
less than one month for simple oxide ores. The leach solution containing the
dissolved rare earths is then collected, treated in a simple process plant to
recover the mixed rare earth as a carbonate product. The mother liquor, now
rich in ammonium sulfate is recycled to the heap after reagent levels are
adjusted. Ultimate recovery of the target mineral can range up to 80% TREE.
Heap leaching does not produce large tailings dams and the amount of overall
environmental impact caused by heap leaching is often lower than more
traditional techniques and is therefore more environmentally friendly. It also
requires less energy consumption to use this method, which many consider to be
an environmental alternative.
The indicative and conceptual process flow sheet is indicated below in Figure
1.
Figure 1. Conceptual Flow Sheet for the Ampasindava Project Heap Leach Ores
Organisational Planning
The Ampasindava Project organisational chart is listed below in Figure 2. The
organisational chart allocates operational responsibility amongst the
functional contractors and service providers.
Each functional contractor and service provider will include their required
personnel structures and staff numbers in the tender procurement process. This
will allow the Company to scale the camp and personnel transport facilities
accordingly.
Figure 2. Organisational Structure of Mine Operations
The fully-outsourced procurement model is functionally attractive for the
construction and operation of remote mining operations. The specialist
engineering and operations are left to functional experts and owner's mine
management can oversee and focus on the core mineral beneficiation function.
It is expected that at least 50% of the mine personnel will live in private
accommodation in villages nearby.
Capital and Operating Costs
The capital cost estimate is broken down into the main areas of
infrastructure, camp and offices, mining and processing plant and associated
project costs, as shown in Table 3. The mining capital cost estimate was
developed by Harena with input from contract mining service providers
elsewhere in Africa and the general and plant capital cost estimate was
developed by first order assessments from other projects located globally.
The capital estimate is subject to a study upgrade where the PFS will be
enhanced to definitive level and the capital estimates will be supported by
design criteria and a higher level of supplier enquiries and quotes.
Table 3. Ampasindava Project summary of CAPEX breakdown (in US$M).
Breakdown Area Est USDm
Management Owners Cost Budget 3.0
Design and Build Est % 18.0
Funding Cost and Fees Est 9.0
Contingency Total % 4.0
Mining Fleet Mixed Plant Est 8.5
Heap Farm & Process Earthworks and Engineering Est 7.0
Leaching Infrastructure Eng 10.1
Power and Water Est 14.0
RO and Nano Filtration Est & Quote 60.0
Other Infrastructure Roads and Camp Est 5.2
Water Borne and Other Est 0.8
Communication and FIFO Est 2.7
Total 142.34
Ongoing 19.00
Total LOM 161.39
Closure Costs Est 14.5
The operating cost estimates were developed in loose collaboration with mining
contractors from other African projects, engineering consultants in Australia
and other local cost indexes.
The operating costs were prepared using the WBS and some equipment lists
generated for the project. These estimates were prepared in US$.
Table 4. A summary of the operating costs estimate broken down into respective
components.
LOM OPEX Average Annual OPEX, US$m Average OPEX, US$/kg REO Average OPEX, US$/tonne ROM % of Total
OPEX Breakdown US$m
Mining 844.8 42.2 11.5 9.6 30.8
Processing 1,050.6 52.5 14.7 11.9 38.3
Other Direct Costs 499.5 25.1 7.0 5.7 18.3
Overhead 343.9 19.2 4.8 3.9 12.6
TOTAL 2,743 136.9 38.5 31.1 100
1.14 Manning and Personnel
It is intended to source skilled and semi-skilled staff under the following
guiding principles:
• Local First,
• Regional Second,
• National Third, and
• International only for highly specialised and temporary assignments.
The Paterson system of job ranking will be used and there will be no
discrimination on the basis of gender, age, race or disability. Thus, all
appointments will be merit based.
Approximately only 8 Expatriate Staff will be forecast to work at the
operation during the initial years. These will be specialist Process and
Engineering skills that will assist in reaching the demanding production rate
of 5 million tonnes processed per annum.
On the job training and skills development of Malagasy professionals will
allow these expatriate employees to retreat. Most staff will be encouraged to
live in nearby towns and establish localised homes and encourage a family
working environment.
Table 5. Operational Manning Estimate
Functional Element Number Owner
Owners Management 10 Owner
Mining 169 Contractors plus
Processing 62 Owner/Contractor
Engineering 66 Contractor
SHEC 42 Contractor
Admin 29 Contractors
Total 378
Please refer to the PFS announcement
(https://harenaresources.com/regulatory-news/) available on Harena's website
for an Employment Organigram for the Ampasindava Project Rare Earth Mine.
Next Steps - Proof of Concept Plant
The critical next step for all leach operations is the test and proof that the
design process operates under ambient conditions in the field adjacent to the
mineral source. Harena plans to permit and construct a Proof of Concept (PoC)
plant at the mine processing site. This exercise will take approximately 9
months and will operate for as long is necessary to provide de-risked
operating confirmation of the process and leach lixiviant requirements, the
environmental outcomes and the economic and technical viability of the planned
operation.
Following successful deployment of the PoC, the Company will move to further
design and a Decision to Mine which would launch construction and project
activities proper.
The image below in Figure 3 is a representative Project in Chile but is a good
representation of a Proof of Concept heap leach and recovery mine plant. It
appears that about 5,000 to 6,000 tonnes was heap leached here.
Figure 3. Representative image of a PoC plant operating in Chile
Project planning for the PoC project includes the following steps:
The Company wishes to fast-track progress on the Proof of Concept Plant.
Validation of an in-house metallurgical design flowsheet is essential for
funding and market confidence. This process can take up to 12 months or more
depending on results achieved.
The PoC plant development process will be staged. The first stage will be as
follows:
1. Mining Permit for Extraction;
2. Interim environmental approval from ONE;
3. Social and regional approvals and acknowledgement from local stakeholders; and
4. Construction commences to facilitate permanent laboratory.
The process to be followed will be:
• Building of a life of mine shed at site which will accommodate suitable
numbers of columns, small cribs and then larger cribs to be acquired in
country;
• Diesel power supply for lighting, pumps and fans;
• Cement mixer type agglomerator and hand held material handling;
• Suitable starter laboratory such that the works can be measured and assessed;
• Small salts storage and mixing area with appropriate ventilation and handling
facilities;
• Small office and ablutions to provide support; and
• Fit for purpose communications infrastructure.
Based on success achieved operating the on-site facility, the PoC will be
expanded into the main facility immediately upon activation thereof. This will
be termed stage 2. The process to be followed will be:
a. Appointment of the technical team to lead mining, leaching and recovery.
b. Brief level 1 design of the PoC mine and limited infrastructure - much can be
disposable.
c. Individual scopes of work for 4 packages representing the four areas of
operation. These should reflect a minimalistic approach for limited services.
d. Approval of program and budget from Ionic RE Executive.
e. Submission of Environmental Amendment to ESIA.
f. Follow on application to Mines Department for exemption to commence on small
scale.
g. Regulatory approval/exemption from Ministry.
h. Procurement Inquiries to approved vendors for equipment and services as
required.
i. Procurement request for Interest on various contract works with local approved
construction and engineering and earthworks companies.
j. Communication and relocation of limited affected persons.
k. Contractor approval and execution of main two contractors for primary
construction, power supply, water and other services including base temporary
roads.
l. Operational plan from same two contractors, if possible.
m. Development of technical and management control systems for Rwenzori RM and
Ionic RE.
n. Mobilisation to site and commencement of 1st pad and temporary infrastructure.
Schedule
Initial planning for the demo plant to have completed its purpose was set at a
time period of 240 days. Contingent issues affecting the schedule are:
• Effective planning and adequate scope inclusions;
• Permissions from the Ministries and the possible need for
exemptions/deferrals;
• Logistic solutions and regulatory impacts;
• Long Lead Time items, such as the RO plants and other, and
• Re-iterations and the ease with which these can be commenced.
Budget for PoC
The budget for the demo plant currently stands at US$11.5m to be spent after
award of the Mining Permit Exploitation and the rising of capital to
construct.
The major cost unknown is not the construction cost and this amount may be
adequate. However, the duration of operation of the PoC mine could require
significant contingent provisions.
The approach would be that if an early enough confidence can be achieved with
the initial 90 days plus 30 days operation of the leach pad and assuming that
regulatory licences have been issued, an opportunity is created for an
accelerated build of the mine can be commenced, making the extended operation
of the PoC mine much more acceptable and somewhat more cost effective.
Please refer to the PFS announcement
(https://harenaresources.com/regulatory-news/) available on Harena's website
for a summary of the budget for Proof of Concept Construction Capital.
Permitting
The conversion of a mining exploration licence (PR) to a mining exploitation
licence (PE) in Madagascar is primarily governed by Law No. 2023-007 (New
Mining Code). This process is managed by the Bureau du Cadastre Minier de
Madagascar (BCMM) under the authority of the Ministry of Mines.
Current requirements for conversion (transformation) include:
Environmental and Social Compliance
• Environmental Impact Study (EIE);
• Social Responsibility Plan (PRSE): Applicants must submit a plan for social
responsibility and contribute to the Mining Fund for Social and Community
Investment (FMISC); and
• Environmental Rehabilitation Plan.
Technical and Financial Requirements
• Pre-Feasibility Study;
• Cahier des Charges Minières (CCM): Every permit must include a specifications
book detailing specific technical and financial obligations; and
• Workforce Requirements
Legal Status and Tenure
Eligibility where the applicant must be a legal entity registered under
Malagasy law. Under the new code, a PE is valid for 25 years, renewable once
for 15 years (reduced from the previous 40-year term). The permit holder must
secure a lease agreement or prior agreement from the landowner for surface
rights.
Applications for transformation are currently being processed by the BCMM
following the lift of a previous moratorium, though a ministerial order from
the Minister in charge of Mines is still required for each final approval.
Pricing Assumptions and Forecast Methodology
The economic model has been developed using long term pricing from a
recognised market analyst and Artificial Intelligence forecast consensus
pricing.
The base case economic indicators have been derived using the market analyst
pricing which has been developed prior to the recently highly publicised
interventions into the Rare Earths market by an alliance of Western Nations
concerned by the dominant position of China in the processing and refining of
these products.
In regard to the different forecasts for the magnet metals, prices forecast by
AI are Nd (1/3rd), Pr (1/3rd), Dy (2/3rds) and Tb (1/3rd) higher than the more
conservative and earlier forecast by the market analyst.
These forecasts are underpinned by open-sourced comprehensive analysis of
global supply and demand trends. On the demand side, projections reflect
anticipated growth in key sectors such as electric vehicle drive-trains, wind
turbines, energy transition technologies, robotics, and particular military
defence applications. Supply assumptions incorporate current global production
levels and publicly announced future projects, offering a well-rounded view of
the evolving market.
Sensitivity Analysis
A sensitivity analysis was performed for the Project, highlighting its
resilience to variations in capital costs, operating costs, REO recoveries and
Prices.
The results of the sensitivity analysis variable intervals of +10%/-10% is
indicated in the graph below, highlighting that the Project is particularly
sensitive to REO prices received and metallurgical recoveries. This would
imply that particular care will be taken during the operations of the
afore-mentioned Proof of Concept plant to optimise these recoveries, even at
the expense of some extra cost inputs.
Figure 4. Ampasindava Project Sensitivity Analysis for base case conditions.
Forward Work Program
The forward work program has been allocated to three distinct estimated time
related milestones.
Award of Mining Licence and further permitting requirements Q1 2026
Operations of Proof of Concept Plant and feed results into final design Q2 2027
parameters
Detailed design and Financial Investment Decision (FID) Q4 2027
The Company has developed a Joint Roadmap to production as a communication and
planning tool for the Project and financial stakeholders. The stakeholders of
the Project have been identified as:
• Members of Harena Rare Earths PLC and investors;
• Government of Madagascar in many regulatory and fiscal forms;
• Local residents and stakeholders at the mine site and regionally;
• Employees of various group companies;
• Contractors and service providers;
• Customers, other clients and buyers; and
• Other interested Governments and product beneficiaries.
Please refer to the PFS announcement
(https://harenaresources.com/regulatory-news/) available on Harena's website
for the Ampasindava project process flow mapping.
Material Assumptions and Outcomes
The PFS was completed with the following material assumptions:
• Clay winning will be via several (up to 5) satellite pits operating
simultaneously and sharing the mining and trucking fleet.
• Ore to be excavated through conventional mobile machine operations and trucked
to the heap leach farm. No requirement for blasting.
• Topsoil will be stockpiled in accessible piles near the mining area so it can
be used for rehabilitation once a section of the pit has been backfilled and
contoured to final landform.
• The processing heap leach farm will be 5.2 Mtpa and the monthly requirement
for material movement will on average be 280,000 cubic metres (bcm) of
mineralised clay per month. An additional 35,000 bcm of topsoil and waste is
to be moved and stored near the pits each month.
• The mine grade has been assumed to be 75% of the average of two bulk samples
excavated from the orebody. This aligns with a concerted effort to selectively
mine high-grade areas of the orebody.
• Overall metallurgical yield has been calculated at 53% TREO. Individual oxide
elemental recoveries have been applied as per the test work results.
• Revenue is based on individual REO prices as supplied by the market analyst
multiplied by individual oxide recoveries. These values reflect gross forward
looking revenue streams. An individual payability factor per metal is assumed
where higher value/demand products can negotiate better differential
payabilities. The highest payability assumed is 80% for Gd2O3 and the lowest
is 40% for CeO2. The average basket payability achieved is 75%.
• The economic model is denominated in US dollars (USD).
• Transportation charges for MREC is estimated at $200/tonne concentrate
shipped. Transport charges ex-Madagascar to the separation plant customer have
been reflected within the estimated payability factor.
• A mine life of 20 years has been assessed for practicality. The African,
remote location has meant a discount factor 0f 10% has been used. The tax rate
is 20% and the royalty rate is 5% of gross value.
• Generally, sea-borne logistics will be used for off-mine transport and
supplies/delivery of equipment. Air-borne logistics will be used for personnel
travel outside the mine region.
• Power consumption is moderate, at about 4MW and will be provided by hybrid
solar supported by diesel generation.
• Mine plant will initially be contractor owned with a support facility for
local truck driver economic aide to purchase mine spec trucks and provide
contract deliveries to the heap leach farm.
• Camp operations will be outsourced, including the capital and construction.
Material Modifying Factors
The following modifying factors were considered in relation to the assessment
of this PFS:
Location
The Ampasindava Project is located in the eastern part of the Ampasindava
Peninsula, Antsiranana Province on the northwest coast of Madagascar,
approximately 500 km north of Madagascar's capital city Antananarivo. The
nearest major town and administrative centre of the region is called Ambanja
and is located some 40 km to the northeast of the project area.
The PFS area has ample land for mine development, processing infrastructure,
and future expansions.
The proposed pits and processing facility will be well-connected via a network
of paved roads and private gravel roads, facilitating efficient ore transport.
The entire mine zone and proposed heap leach farm will be within 10kms of each
other.
Power Supply
Power is not readily available in the project area from the national grid.
Power at the mine site, expected to require some 6MW, will be supplied by
diesel generator units and supplemented by solar installation and battery
storage for low critical applications.
The Company will supply the electrical generator equipment for the heap leach
processing plant and a 11kV main substation including 2 incomer circuit
breakers. In addition, diesel tanks, pump and piping from the tank to the
gensets as well as the paralleling and synchronisation control system.
Generator specifications KH-1000GF set 6 Including diesel boxes, generator
control units and 400V switchgear. Also installed will be a DMC 1500 power
command paralleling system to balance loads from the power plant.
Water Supply and Management
The Project will incorporate advanced water recycling technologies, including
ultrafiltration and reverse osmosis (RO) systems, to minimise freshwater
consumption and ensure minimal industrial effluent discharge. Freshwater is
available through on-site bores. Sea water is abundant and nearby as the
project is within 3km of the coast. The ore beneficiation process is designed
for high water efficiency, with >75% of process water recirculated within
the plant.
Water consumption for the Ampasindava Project is expected to be low. This
basis is derived from:
• Net positive water balance of the process;
• The project areas high annual rainfall;
• The process arrangement using heap leaching and maximised water recycling
using membrane technology for reagent recovery, resulting in fresh water
recovery; and
• Given the low forecast water consumption, it is proposed that water for both
processing operations and dust management is to be sourced by water harvesting
ponds on site and from the mining pit.
During periods of extended dry weather, it is proposed that water could be
sourced from boreholes up to 10km from the project area, although local
groundwater resources potentially also a source, however, limitation on
drawing from local groundwater could limit this option.
Labour and Accommodation
The operation is to be staffed by a residential workforce. No fly in - fly
out other than specialised technical and management skills is envisaged and
the number of expatriates staff is intended to be low, and to be being phased
out over the first 7 years of operations.
The region is poverty stricken and there is no shortage of unskilled and
semi-skilled labour. A workforce of semi-skilled and artisanal workers is
available in nearby townships and population centres. The closest major
population centre is Ambanja, which has a population of 50,000.
The township of Anjiabory is approximately 10km from the project site and the
intent is to source local operations staff from the immediate districts and
train staff accordingly.
Environmental
The Company has submitted seven environmental monitoring reports. These
reports were completed in order to be compliant to the regulation of the
Office National de l'Environnement (ONE) and the Ministry of Mines of
Madagascar.
From the point of view of environmental considerations, no sensitive area has
yet been established within the exploration license for the period. However,
the northeastern part of that exploration license, and an area of
approximately 100 km(2), is located in a priority area for the establishment
of protected areas.
The environmental and social programs will strive to meet international IFC
standards.
For further information please contact:
Harena Rare Earths Plc
Ivan Murphy, Executive Chairman +44 (0)20 7770 6424
Allan Mulligan, Executive Technical Director
SP Angel - Joint Broker +44 (0)20 3470 0470
Ewan Leggat / Josh Ray (Corporate Finance)
Marex Financial - Corporate Advisor +44 (0)20 7655 6000
Angelo Sofocleous / Keith Swann / Matt Bailey (Broking) corporate@marex.com
Allenby Capital - Financial Adviser & Joint Broker +44 (0)20 3328 5656 info@allenbycapital.com
Jeremy Porter / Vivek Bhardwaj (Corporate Finance)
Amrit Nahal / Kelly Gardiner (Sales & Corporate Broking)
Muriel Siebert & Co. - US Financial Adviser & Broker +1 (917) 902 7823 aasija@siebert.com
Ajay Asija, Co-Head of Investment Banking
Celicourt Communications - Public Relations +44 (0)20 7770 6424
Mark Antelme / Charles Denley-Myerson harena@celicourt.uk
Notes to editors
Harena (www.harenaresources.com (http://www.harenaresources.com.au) ) is a
rare earths exploration and development company focused on the Ampasindava
Ionic Clay Rare Earth Project in Madagascar (Harena's interest is 100%). The
project hosts one of the largest ionic clay rare earth deposits outside of
China, with significant concentrations of high-value magnet metals,
specifically heavy rare earths, including neodymium (Nd), dysprosium (Dy), and
praseodymium (Pr), which are critical for the composition of neodymium magnets
(NdFeB). Harena is committed to low-impact, high recovery mining, providing a
sustainable supply of critical minerals for the global energy transition and
military defence industries as well as meeting the ever-growing demand for
NdFeB from the robotics sector.
Acronyms and abbreviations
The following acronyms and abbreviations apply throughout this announcement:
AI Artificial intelligence
bcm billion cubic metres
BCMM Bureau du Cadastre Minier de Madagascar
Capex Capital expenditure
CCM Cahier des Charges Minières
CeO2 Cerium(IV) Oxide
DFS Definitive Feasibility Studies
EBITDA Earnings before interest, depreciation, and amortization
EIE Environmental Impact Study
EPCM Engineering, procurement and construction management
ESIA Environmental and social impact assessment
FID Financial Investment Decision
FMISC Mining Fund for Social and Community Investment
Gd2O3 Gadolinium(III) oxide
HDPE High-density polyethylene
IFC International Finance Corporation
IRR Internal rate of return
Km kilometre
LOM Life of mine
MREC Mixed rare earth carbonate concentrate
Mtpa Million tonnes per annum
MW Megawatt
New Mining Code Law No. 2023-007
NPV Net present value
ONE Office of natural environment
Opex operating expense
PE Mining exploitation licence
PFS Pre-Feasibility Study
PoC Proof of concept
ppm Parts per million
PR Mining exploration licence
PRSE Social Responsibility Plan
REE Rare earth exploration
REO Rare Earth Oxide
RO reverse osmosis
ROM Run-of-Mine
TREO Total Rare Earth Oxide
WBS Work breakdown structure
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