Greenland Mines (Nasdaq: GRML) has been granted an exploration licence for its Sarfartoq rare earths project, sending the company's shares higher.

The Greenland government's approval, issued Friday, satisfies one of the key regulatory closing conditions for Greenland Mines' $35 million (C$48.4 million) acquisition of Sarfartoq from Neo Performance Materials. The new owner has described Sarfartoq as one of the island's "most advanced and compelling rare earth projects," citing its high-grade nature and favourable Arctic logistics.

"This approval from the Government of Greenland is a fundamental milestone for our company and for the future of Sarfartoq," Greenland Mines president Bo Møller Stensgaard said in a news release. "Sarfartoq is one of the most important undeveloped neodymium-praseodymium resources in the Western world."

The stock jumped 22% on Friday to close at $10.14 apiece in New York, after touching an intraday high of $12.70. By late Monday morning, the shares had slipped back to about $8.79, giving up most of Friday's advance. Greenland Mines has a market capitalization of roughly $1.4 billion.

Carbonatite

Located roughly 60 km from Kangerlussuaq in the southeast, Sarfartoq hosts a carbonatite deposit strongly enriched in neodymium-praseodymium (Nd-Pr). Under the sale agreement, Neo Performance will receive offtake rights on up to 60% of future ore or mineral concentrate production from the project.

Greenland Mines expects to complete an updated SEC S-K 1300-compliant resource estimate this summer. It plans to refresh a 2011 preliminary economic assessment by validating 23,000 metres of drilling completed in 2023, and is continuing environmental baseline studies to support future permitting. The licence marks another step in moving the project from historical resource data toward current disclosure standards and the technical work typically needed before more advanced development decisions can be made.

According to the historical NI 43-101 resource cited by the company, the project hosts 5.88 million indicated tonnes grading 1.77% total rare earth oxides (TREO) and 2.46 million inferred tonnes grading 1.59% TREO, containing roughly 27 million kg of neodymium oxides and 8 million kg of praseodymium oxides.

Skaergaard

Greenland Mines also holds Skaergaard, a large gold-palladium-platinum project in southeast Greenland that contains copper and cobalt. Unlike Sarfartoq, Skaergaard has not yet reached the economic study stage. The company is carrying out drilling, metallurgical testing, environmental baseline work and bulk sampling ahead of an initial economic assessment.

According to a 2022 resource, Skaergaard hosts 159 million indicated tonnes containing 8.04 million oz. palladium, 2.7 million oz. gold and 630,000 oz. platinum, plus 205.4 million inferred tonnes containing 9.11 million oz. palladium, 4.13 million oz. gold and 740,000 oz. platinum.

Source: The Northern Miner