Sampling and surveys can tell you what is likely to be under the ground, but it is only the actual drill bit which can prove or disprove geological theories and estimates. And much hangs on the program of drilling about to be undertaken in Western Australia by Northern Minerals (ASX:NTU). The reason: this company has been getting considerable investor attention because preliminary work indicates that the distribution of rare earths at the Browns Range project is weighted heavily in favour of the heavy elements – in fact, 86 per cent is the preponderance of the HREE, with yttrium taking up 61 per cent.
Managing director George Bauk and exploration manager Robin Wilson sat down with RareMetalBlog in Sydney. Their stock has been one of the hot performers on the Australian scene moving from 5.5c mid-2010 to a high of 72c this month. The rush into the stock was due not just to the HREE factor – although that was important – but by the confidence generated after Lynas Corp (ASX:LYC) took 8 per cent of the company and China-connected investor Conglin Yue bought 17 per cent. A London-based group, Geiger Counter, is No.3 on the register with 6 per cent. A further confidence booster is that rare earth expert Dudley Kingsnorth has allowed his name to be associated with the company by being named as a consultant.
The details of the REE composition are based on 16 rock chip samples taken from the Browns Range area, which lies west of the Northern Territory border. That, rightly, is seen as very preliminary and an indication of hope rather than expectation. But, subsequent to that, Northern Minerals has collected 2000 samples and Bauk is no less confident regarding his project.
His view is that the company would concentrate on the four or five REE that are the most likely revenue drivers rather than try for some quantity of all 17. He is extremely encouraged by the fact that dysprosium makes up 10 per cent of the composition (an element likely to be in a 1000 tonne deficit by 2015), followed by gadolinium, erbium and ytterbium (6 per cent each) and europium 3 per cent.
The $A2.5 million drilling program is to be split in two lots of 5000 metres, so that Bauk and Wilson can get a handle on what lies underneath from the first drilling pass and make any necessary adjustments before commencing the second.
Northern Minerals also has the John Galt REE project northwest of Browns Range. The licence was granted in December and it has similar geology to Browns Range – that is, high value HREE in xenotime mineralisation.
Now, two shorter updates.
A potential new entry into the REE space is Latin Resources (ASX:LRS) which has mainly iron ore interests in Peru. However, the company has significantly expanded its Guadalupito iron and mineral sands project . It says that the area has the potential to be a multi-commodity project as it contains rare earths along with tungsten, zircon and andalusite.
Another company for the Australian watchers to note is Newera Resources (ASX:NRU) which has taken ground surrounding – in fact, encompassing – the Cummins Range REE deposit owned by Navigator Resources (ASX:NAV). Newera said it was encouraged to take up the ground by the underlying geology and the close proximity to Cummins Range whose resource was reported to be worth $US6 billion at October 2010 prices.