Down Under REE report: Greenland opportunity, scandium progress

An opportunity may come up for an existing REE processor to get a share of a Greenland project now being drilled by a junior explorer. New York-based equity research firm RB Milestone Group says the Motzfeldt tantalum-niobium-REE project held by Ram Resources (ASX:RMR) offers a number of options for development.

Milestone says that a plant capable of separating REE oxides will involved very large capital outlays for Ram, somewhere between US$500 million and US$1 billion. Ram’s present development scenario for the Aries deposit within Motzfeldt is to produce a heavy minerals concentrate in Greenland which contains tantalum-niobium-REE as well as zirconium. RB Milestone notes that preliminary test work has shown that such a concentrate can be produced using industry standard gravity separation techniques and that Ram intends to do further work on this later in 2011.

The report says Ram would be looking to partner with a processor who already has the capability and knowledge of processing the concentrates to extract the REE. It adds that Ram could look to extract the tantalum and niobium with an acid leach process and then sell a mixed REE concentrate to a third party processor. The potential size and long life of the deposit would make it attractive to a REE processor, according to the analyst report.

RB Milestone adds: “Whilst we understand from management at Ram that other processing options remain in consideration at this time, we feel there is merit in the above approach as it would result in much lower capital costs, considerably reduced environmental impact in Greenland, and possibly a much shorter development time line”. However, this option will need to take into account the lower revenues received by Ram for mixed REE concentrate.

Incidentally, RB Milestone has its views as to where REE demand is going. It sees a compound annual growth of 8.3 per cent over the next 10 years, from 124,000 tonnes in 2010 to between 250,000 and 300,000 tonnes in 2020 – and driven by a strong demand from China for these metals.

In other news:

Canada’s EMC Metals Corp (TSX:EMC) says SNC-Lavalin will do the feasibility study on the Nyngan scandium project in New South Wales, Australia. By February next year, ENC is required to produce a technical report and pay A$1.3 million to earn a 50 per cent interest in the project from Jervois Mining (ASX:JRV).

While on scandium, Metallica Minerals (ASX:MLM) has reported what it describes as excellent metal extraction results on initial high pressure acid leach at its Nornico nickel-cobalt-scandium project in Queensland. The company says the technology will allow the iron-rich ores to be treated, particularly the high scandium and high iron ores from the Lucknow and Kokomo deposits, adding substantial scandium to the project.