Namibia Critical Metals - Unlocking Heavy Rare Earth Potential in Namibia

About Namibia Critical Metals

Namibia Critical Metals Inc. (TSXV:NMI, OTC:NMREF) is a Canadian mineral exploration and development company focused on unlocking the potential of Namibia's critical metals deposits.

The company's flagship project is the Lofdal Heavy Rare Earths Project, which contains a globally significant resource of the highly strategic rare earths dysprosium and terbium. These heavy rare earths are essential components in permanent magnets used in electric vehicles, wind turbines, and other technology applications.

However, production of dysprosium and terbium is currently concentrated in China, creating supply chain risks for manufacturers. Namibia Critical Metals offers a potential sustainable supply source for these metals from a stable mining-friendly jurisdiction like Namibia.

The Lofdal Project is fully permitted with a 25-year Mining License and is being advanced under a Joint Venture Agreement with the Japan Organization for Metals and Energy Security (JOGMEC), a Japanese government agency focused on securing critical mineral supplies.

Beyond rare earths, Namibia Critical Metals has established itself as a major player in Namibia's emerging gold sector through recent exploration and acquisition initiatives. The company is leveraging its extensive in-country experience to build a diversified project portfolio offering exposure to critical metals and precious metals in one of the world's most prospective mining destinations.

Interview with President & CEO, Darrin Campbell

The Lofdal Rare Earth Project

The Lofdal project is located in northwestern Namibia about 450km from the capital city Windhoek. Lofdal is one of the largest heavy rare earth deposits outside of China, with a resource base of over 50 million tonnes containing highly sought-after dysprosium and terbium.

Namibia Critical Metals has invested over $30 million into exploration and development at Lofdal over the past decade. This includes over 50,000 meters of drilling to delineate the deposit and extensive metallurgical test work to optimize processing flowsheets. The project has an estimated net present value of nearly $400 million USD with an internal rate of return of 28%, based on a 2020 preliminary economic assessment.

Strategic Partnership with JOGMEC

In 2020, Namibia Critical Metals secured a transformational strategic partnership with JOGMEC, a Japanese government agency focused on securing stable supplies of natural resources for Japanese industry.

Under the terms of the deal, JOGMEC will provide up to $20 million in project funding to earn a 50% interest in the Lofdal project. So far, JOGMEC has already contributed $12 million towards exploration and development costs.

The JOGMEC partnership provides extensive technical expertise in rare earth processing and extraction, in addition to potentially opening up further Japanese investment into the project. Japan consumes over 30% of the world's rare earths but lacks domestic resources, making partnerships in stable mining jurisdictions like Namibia critical.

Advancing Towards Pre-Feasibility

Namibia Critical Metals is currently advancing the Lofdal project towards a Pre-Feasibility Study (PFS), fully funded by JOGMEC contributions. The PFS is targeted for completion by Q3 2024.

Recent work has focused on pilot-scale metallurgical testing to optimize processing flowsheets and recoveries. The company is also expanding its drilling program to upgrade resources and incorporate them into the PFS mine design.

Over the next 6-12 months, investors can expect a steady news flow from the PFS work, as well as further developments on bringing in additional industrial partners from Japan.

The Heavy Rare Earth Advantage

The Lofdal project is unique among most rare earth deposits globally in that it is enriched in heavy rare earths, rather than light rare earths. Heavy rare earths like dysprosium and terbium have more specialized uses compared to the light rare earths used in magnets found in most consumer electronics.

Heavy rare earths are indispensable in high-tech applications like electric vehicles, wind turbines, and defense systems. But their production is highly concentrated in China, which controls over 90% of the global supply. Lofdal could provide a much needed source of heavy rare earths supply outside China.

The project is expected to produce around 250-300 tonnes of dysprosium annually, which would meet over 50% of total Japanese demand. This gives Lofdal a strategic advantage in attracting investment and offtake agreements.

The Keys to Unlocking Value

Namibia Critical Metals will be focused on several key areas to unlock the full value of the Lofdal project for investors:

• Resource Expansion: Additional exploration drilling and metallurgical testing to expand the current resource estimate. There is strong potential to significantly increase the current 50 million tonne resource.
• Optimizing Economics: Completing engineering studies to optimize the mine design, processing flowsheet, recoveries, and operating costs. Lowering costs will improve project economics.
• Securing Offtake: Signing agreements with major rare earth consumers for future Lofdal production. This will underpin project economics.
• Attracting Strategic Investors: Bringing in additional strategic partners and investors from Japan's industrial sector. This will provide funding and technical expertise.
• Developing Downstream Capability: Assessing the potential for Namibia to develop downstream rare earth separation capacity through the proposed Rare Earth Alliance Namibia initiative. This would add further value inside Namibia.

Conclusion

With its large heavy rare earth resource, strategic backing from Japan, and operations in a stable mining jurisdiction like Namibia, Namibia Critical Metals provides investors with a unique opportunity in the critical minerals space.

The current depressed rare earth market provides an opportunity to gain exposure before prices recover over the medium term on accelerating demand and constraints on new supply.

As the Lofdal project continues advancing towards development, investors can expect a significant re-rating as the company transitions to become a globally significant producer of highly strategic heavy rare earths. Namibia Critical Metals has the potential to become a leading publicly traded rare earth producer outside China.