Defense Metals (DEFN.V): Announces Landmark Memorandum of Understanding with Sinosteel MECC for Information Sharing, Beneficiation Testwork, and Investigation into Establishing a Large-Scale Pilot Plant at the Wicheeda Rare Earth Property

VANCOUVER, BC, Aug. 10, 2021 /PRNewswire/ – Defense Metals Corp. (“Defense Metals” or the “Company“) (TSXV: DEFN) (OTCQB: DFMTF) (FSE: 35D) is pleased to announce the execution of a non-binding Memorandum of Understanding (“MOU“) with Sinosteel Equipment & Engineering Co., Ltd (“Sinosteel MECC“), a subsidiary of Sinosteel Corporation, consisting of information sharing, beneficiation 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 (“Wicheeda“) to assess the economic and technical feasibility of full-scale mine development.

Pursuant to the MOU, areas of cooperation between the Parties are as follows:

1. Defense Metals will share Wicheeda project information with Sinosteel MECC including but not limited to:
   1. Mine development,
   2. Permitting and licences,
   3. Transport logistics,
   4. Project financing,
   5. Cash cost analysis, and
   6. Situational updates.
      
      Sinosteel MECC will share with DEFN its experience in the rare earths industry relating to beneficiation, Engineering Procurement Construction (“EPC“) and EPC financing, and other general knowledge including pricing, costs, and other relevant matters in the rare earth elements industry.
      
      
2. Defense Metals will provide Sinosteel MECC with a representative mineralization sample to carry out beneficiation testwork with the objective of compiling research to design a concentrator suitable for handling Wicheeda feed material. The testwork results will be used in conjunction with the ongoing Preliminary Economic Assessment to optimise design for the future project.
   1. Wicheeda rare earth sample will total approximately 200kg and will be sent to Sinosteel MECC as soon as practicable and subject to obtaining any necessary government permits and approvals.
   2. It is anticipated the testwork will take approximately 4.5 months and cost US$200,000.
   3. After receiving the testwork results, both parties will assess and discuss how to design a concentrator suitable for Wicheeda feed material.
      
      
3. The proposed pilot plant will consist of both a beneficiation and hydrometallurgical process to produce bulk samples of rare earth concentrate, mixed rare earth carbonate, and high-purity rare earth oxides.
   1. DEFN will assess the cost value assigned to the EPC contract and will inform Sinosteel MECC as the proposed pilot plant progresses.
   2. DEFN will review if additional related infrastructure will be required for the pilot plant can be included in the EPC contract for Sinosteel MECC.
   3. Sinosteel MECC, as the general contractor, will be responsible for the design, procurement of equipment, construction, installation, commissioning, training and other works of the pilot plant following general EPC terms.
   4. It is envisioned the pilot plant will be fully constructed in modules in China before being transported and installed at Wicheeda.
   5. Both parties agree to enter into discussions regarding Sinosteel MECC providing or sourcing EPC financing solutions for development the pilot plant such as:
      1. 1. 1. Flexible financing solutions supported by Sinosteel MECC but based on conditions to the satisfactory of Sinosteel MECC, and
            2. Assisting DEFN to find proper investors from China or other countries.

Craig Taylor, CEO of Defense Metals, stated: “Defense Metals is pleased to announce a landmark MOU with Sinosteel MECC a major player in the global mining industry and looks forward to updating shareholders with further information as project development talks continue between the two companies.”

Brendan Jephcott, Director of Golden Dragon Capital Ltd. and advisory to Defense Metals stated: “Sinosteel MECC has a long commercial history and has completed more than 400 major metallurgical projects for the Chinese government and built many of the largest international projects ever undertaken by People’s Republic of China.”

About the Wicheeda REE Property

The 1,708 hectare Wicheeda REE Property, located approximately 80 km northeast of the city of Prince George, British Columbia, is readily accessible by all-weather gravel roads and is nearby to infrastructure, including power transmission lines, the CN railway and major highways.

Geologically, the property is situated in the Foreland Belt and within the Rocky Mountain Trench, a major continental geologic feature. The Foreland Belt contains part of a large alkaline igneous province, stretching from the Canadian Cordillera to the southwestern United States, which includes several carbonatite and alkaline intrusive complexes hosting the Aley (niobium), Rock Canyon (REE), and Wicheeda (REE) deposits.

Defense Metals is currently advancing the road accessible Wicheeda Critical Rare Earth Element (REE) Property, which is located close to infrastructure approximately 80 kilometres northeast of Prince George, British Columbia (BC). The Wicheeda project has indicated mineral resources of 4,890,000 tonnes averaging 3.02% LREO (Light Rare Earth Elements) and inferred mineral resources of 12,100,000 tonnes averaging 2.90% LREO¹.

Qualified Person

The scientific and technical information contained in this news release as it relates to the Wicheeda REE Property has been reviewed and approved by Kristopher J. Raffle, P.Geo. (BC) Principal and Consultant of APEX Geoscience Ltd. of Edmonton, AB, a director of Defense Metals and a “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mr. Raffle verified the data disclosed which includes a review of the analytical and test data underlying the information and opinions contained therein.

About Defense Metals Corp.

Defense Metals Corp. is a mineral exploration company focused on the acquisition of mineral deposits containing metals and elements commonly used in the electric power market, military, national security and the production of “GREEN” energy technologies, such as, high strength alloys and rare earth magnets. Defense Metals has an option to acquire 100% of the 1,708 hectare Wicheeda Rare Earth Element Property located near Prince George, British Columbia, Canada. Defense Metals Corp. trades in Canada under the symbol “DEFN” on the TSX Venture Exchange, in the United States, under “DFMTF” on the OTCQB and in Germany on the Frankfurt Exchange under “35D”.

About Sinosteel Corporation

Sinosteel Corporation is a central enterprise under the administration of the State-Owned Assets Supervision and Administration Commission (“SASAC“) and is engaged in the development and processing of metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, and related engineering technical service and equipment manufacturing. It is a large multi-national enterprise with clearly-defined businesses that integrate resources development, trade & logistics, engineering projects, science & technology, equipment manufacturing to provide comprehensive services for the steel industry and other strategic emerging industries.

About Sinosteel MECC

Sinosteel MECC is a subsidiary of Sinosteel Corporation and its business covers product trading and mining project construction. Sinosteel MECC has previously cooperated with Australian rare earths company Northern Minerals Ltd. where it was granted the EPC contract for the engineering, procurement, and construction of a 60,000tpa pilot plant for the Browns Range Rare Earth Project located in Western Australia.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Statement Regarding “Forward-Looking” Information

This news release contains “forward–looking information or statements” within the meaning of applicable securities laws, which may include, without limitation, statements relating to the MOU and the expected outcomes and developments that may arise, plans for the Wicheeda Property,  completion of test-work by Sinosteel MECC, shipment of samples to Sinosteel MECC,  completion of PEA, the advancement and development of the Wicheeda Property, the technical, financial and business prospects of the Company, its project and other matters. All statements in this news release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of rare earth elements, the ability to achieve its goals, that general business and economic conditions will not change in a material adverse manner, that governmental approvals will be obtained, that financing will be available if and when needed and on reasonable terms. Such forward-looking information reflects the Company’s views with respect to future events and is subject to risks, uncertainties and assumptions, including those filed under the Company’s profile on SEDAR at www.sedar.com. While such estimates and assumptions are considered reasonable by the management of the Company, they are inherently subject to significant business, economic, governmental, competitive and regulatory uncertainties and risks. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, continued availability of capital and financing and general economic, market or business conditions, adverse weather conditions, failure to maintain or obtain all necessary government permits, approvals and authorizations, failure to maintain community acceptance (including First Nations), decrease in the price of rare earth elements, the impact of Covid-19 or other viruses and diseases on the Company’s ability to operate increase in costs, failure to obtain equipment, litigation, and failure of counterparties to perform their contractual obligations. The Company does not undertake to update forward–looking statements or forward–looking information, except as required by law.

SOURCE Defense Metals Corp.