Metallurgical processing of the Nechalacho ore has two objectives: firstly beneficiating the rare-earth bearing minerals from the gangue minerals and secondly, extracting the rare earth elements (“REEs”) from these minerals into a mixed rare earth concentrate which can then be the feed stock into a rare earth refinery for separation and purification of the individual rare earth oxides.

An extensive metallurgical process development program was carried out over a six year period beginning in 2008, at various Canadian and international research organizations. This led to the development and confirmation of an innovative new process flowsheet to treat this complex ore and economically recover the REEs into a rich, mixed rare earth concentrate for feeding into a refinery where high purity, refined REE products will be produced. In addition, the process will generate a highly marketable zirconium basic sulphate (“ZBS”) by-product.

The metallurgical processing of the Nechalacho ore comprises the following processes:

Stage 1: Conventional SAG and Vertical Mill grinding followed by magnetic separation (to remove impurities) and froth flotation to produce a mineral concentrate. The flotation plant will be constructed at the Nechalacho site adjacent to the mine.

Stage 2: Thermal and hydrometallurgical treatment of the mineral concentrate to decompose the REE minerals and enable the REEs to be dissolved in hydrochloric acid. After removal of most impurities by a combination of multiple unit processes, an intermediate REE precipitate will be produced from this solution.

Stage 3: Re-dissolution of the precipitate and further removal of impurities, lanthanum and cerium (by solvent extraction), after which the final, high grade mixed heavy rare earth concentrate is produced.

Stage 4: Recovery of high purity ZBS from the initial hydrochloric acid leach solution.

Stage 5: Recovery and recycling of hydrochloric acid, magnesia and limestone back to the process in order to reduce reagent consumptions.