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Defense Metals (TSX-V:DEFN) has entered into a Memorandum of Understanding with Sinosteel Equipment & Engineering, a subsidiary of Sinosteel Corporation for testwork and potential concentrator design research cooperation, and an investigation into the establishment of an on-site large-scale pilot plant at the Wicheeda Rare Earth property in British Columbia to assess the economic and technical feasibility of full-scale mine development.

Defense Metals began drill pad construction at the end of July in anticipation of starting its 2021 resource expansion.

The Wicheeda Critical Rare Earth Element (REE) property is located close to infrastructure about 80 kilometres northeast of Prince George. The Wicheeda project has indicated mineral resources of 4,890,000 tonnes averaging 3.02% light rare earth elements LREO and inferred mineral resources of 12,100,000 tonnes averaging 2.90% LREO.

In January, the company commissioned the Saskatchewan Research Council (SRC) to complete an X-ray transmission sorting amenability study on mineralized feed sourced from Wicheeda.

With the SRC investment, Defense Metals CEO Taylor said, “We are logical feed, for our concentrate to be processed at their production facility. Transporting from Prince George to Saskatchewan is hassle-free, [with] no borders to cross.”

While the market share for LREO use in defense applications is small, its significance is that some rare earth minerals are essential in military equipment such as jet engines, missile guidance systems, antimissile defense systems, satellites and lasers. China currently dominates the rare earth market, accounting for nearly 90% of global supply.

MP Materials Corp’s Mountain Pass mine in California is the only US rare earths mine, but that facility relies on Chinese processors. Australia’s Vital Metals is the first rare earths producer in Canada with its Nechalacho mine in the Northwest Territories, and it is expanding through property acquisitions in Quebec.

A Democrat in the U.S. House of Representatives introduced legislation on Tuesday extending tax credits to companies that domestically produce rare earth magnets, a sector currently dominated by China.

The bill is the latest in a string of U.S. legislation attempting to cobble together a national strategy to produce more lithium, rare earths and other strategic minerals used to make electric vehicles (EVs), weaponry and electronics.

“When we came up with the name two years ago, our thought was: China controls rare earths, and there are so many rare earths in military components, the US is going to have to wake up to this fact, and start taking measures to get a domestic supply chain, ” Taylor told MINING.COM.

“They spend arguably $1.2 trillion a year on defense, but they have an adversary making their components,” Taylor said.

The plan at Wicheeda is to produce the rare earths involved in defense applications; nyodemium, praseodymium, cerium and lanthanum. With the IEA forecasting a tenfold increase in EV adoption by 2030, the result, Taylor said will be a correlating supply deficit in nyodemium and praseodymium especially.

“We’re involved in every single one,” Taylor said.

In 2019, Defense Metals put in an application in to be a preferred vendor under Defense Production Act (DPA).

The DPA published a Technology Market Research report last year outlining Defense Metal’s Corporation’s role in the LREE supply chain.

“A scoping study for the Wicheeda mine based on the current estimated resource of 11.37 million tonnes grading 2.5% REO indicated that a 2,000 tpd mining operation processing 740K tonnes of ore annually for a period of 15 years could be sustained,” the report reads.

Taylor maintains the significance of the Wicheeda resource to military applications, adding, “We’re seeing investment from the DOD and DOE, but not enough at this point.”

Each stealthy F-35 strike fighter requires 920 pounds of rare-earth material, according to DOD. Each Arleigh Burke DDG-51 destroyer requires 5,200 pounds. An SSN-774 Virginia-class submarine needs 9,200 pounds, Air Force Magazine reported.

The 2021 Wicheeda drill program comprising 2,000 metres to 5,000 metres will focus on expanding the zone REE mineralized dolomite-carbonatite to the north, and on further delineating existing inferred resources within the central and northwestern areas of the deposit.

“We’ve crammed an awful lot of work into two years – we have a 30 tonne bulk sample, sent to Ontario for metallurgical testing. [Through] the drill program we’ve expanded out metal value by 100%,” Taylor said.