Critical Metals soars on Greenland REE drilling

Critical Metals (Nasdaq: CRML) has launched a 2,000-metre drilling program aimed at expanding the resource at its Tanbreez rare earth project in Greenland ahead of a feasibility study. Its shares surged on the update.

The drilling represents “an important investment and step” in its efforts to bring a “game-changing rare earth asset” into production as soon as possible, the New York-based critical minerals developer said in a news release Tuesday.

The Tanbreez project, which hosts 25.42 million indicated tonnes grading 0.37% total rare earth oxides (TREO) and 19.45 million inferred tonnes at 0.39% TREO, according to an April technical report. It is one of the world’s largest rare earth deposits.

Shares of Critical Metals soared by a third to a five-month high of $3.96 apiece in New York on Tuesday afternoon, valuing the company at $391 million.

1% of orebody

The rare earth resource, from an orebody covering 8 km x 5 km in area, represents just 1% of the entire host rock. Approximately 27% of that resource is categorized as heavy rare earths, which are used in high-performance applications such as clean energy and defence, and are less common than light rare earths.

Tanbreez has an after-tax net present value (NPV) of about $2.1 billion to 2.7 billion at discount rates of 15% and 12.5%, respectively, with a pre-tax internal rate of return (IRR) of 180%. A post-tax IRR wasn’t given in the report. 

It outlines a staged growth strategy for Tanbreez, with initial production of around 85,000 tonnes of rare earth oxides per year, beginning as early as 2026, then scaled to 425,000 tonnes after modular expansion.

Exploration target

The 2025 drilling campaign will focus solely on the eudialyte component of Tanbreez rare earth mineralization found on the Fjord deposit, which accounts for about half of the resource at 22.6 million tonnes. The remaining resources are contained in feldspar and arfvedsonite.

Specifically, the Critical Metals team is looking to further extend the Fjord deposit to the east by about 700 metres, and 650 metres along strike of the kakortokite host rock, which by comparison measures 5 km by 2.5 km in area and several hundred metres thick.

In its press release, the company considers this to be a 500-million-tonne exploration target within the 4.7-billion-tonne host rock.

According to the company, the target depths for the vertical drill holes will range from 80 to 250 metres over the undulating topography. The first hole has already been collared and down to about 60 metres in outcropping kakortokite host.

Resource increase

“This new drilling program is designed to significantly increase the size of the current mineral resource estimate and support the development of the bankable feasibility study, paving the way for a final decision to mine,” CEO and executive chairman Tony Sage said in the release.

The company also expects new drill results from its 2024 campaign to further verify the potential of the Tanbreez project while it completes this year’s drilling.

With full exploration teams now on site, Critical Metals says new data collected will “play a key role” in finalizing the feasibility study and preparing the comprehensive reports required by Greenland regulators as well as its proposed financial partners.

Last month, it received a letter of intent from the U.S, Export-Import Bank (EXIM) for a loan worth up to $120 million to fund Tanbreez.