Environmental and Social Impact Assessments on the Kvanefjeld Project

reenland Minerals and Energy Limited (‘GMEL' or ‘the Company') is pleased to provide an update on the status of environmental and social impact assessments on the Kvanefjeld multi-element project. The Kvanefjeld project, located in south Greenland, is underpinned by one of the world's most significant multi-element resources of rare earth elements and uranium. In late-2010, GMEL received permitting for the full feasibility evaluation of the Kvanefjeld project.

Critical components of a definitive (bankable) feasibility study in Greenland are the environmental and social impact assessments (EIA and SIA). The guidelines for these studies are set out by Greenland's Bureau of Minerals and Petroleum (BMP). Prior to the commencement of the studies a comprehensive scoping phase is required to plan and time all constituent work programs. This process involves the engagement of both government and community stakeholder groups, in order to establish an agreed ‘terms of reference' for the studies.

In early April 2011, as part of the scoping process, GMEL in conjunction with consultants Gontmij/Carl Bro and Orbicon conducted a series of workshops with all key stakeholder groups in the towns of Narsaq, and Qaqortoq in southern Greenland, as well as in Nuuk, Greenland's capital. These workshops aimed to provide a comprehensive overview of the project and establish stakeholder input to incorporate into the ‘terms of reference' for both the EIA and SIA.

Following a review process by both the BMP and NERI (Denmark's National Environmental Research Institute; advisor to the BMP on environmental sustainability) the ‘terms of reference' for both the EIA and SIA on the Kvanefjeld multi-element project have now been approved.

All work programs relating to the EIA and SIA will now proceed. Stakeholder engagement will continue throughout the duration of the studies to aid in establishing an appropriate development scenario.

Greenland Minerals and Energy Limited (‘GMEL' or ‘the Company) has been advancing the Kvanefjeld multi-element project since 2007. This has included extensive resource development programs, environmental base-line studies, metallurgical process development studies, infrastructure studies, and preliminary economic evaluations. This phase of work builds on many years of high-quality research by Danish Research Institutes into mining and processing the Kvanefjeld ores. Collectively, the work conducted both historically and recently provides an extremely comprehensive technical foundation for the Kvanefjeld project.

Feasibility studies to establish the best possible development scenario for a multi-element mining operation to exploit Kvanefjeld's vast resources are now well advanced. Kvanefjeld is recognised as the world's largest JORC or NI 43-101 resource of rare earth elements, and also contains extensive uranium and zinc resources (Table 1). In early 2010, a first overview at a viable development scenario was released as an Interim Pre-feasibility report. This highlighted that a multi-element mining operation could be developed that would have one of the largest rare earth production capacities of any operation globally. The Interim report also demonstrated the strength of a diversified production profile, bringing multiple revenue drivers to the project, de-risking the project to the impact of price fluctuations in a particular sector.