Stans Energy to Kick Start Heavy Rare Earth Oxide Production Testing in July 2012

Stans Energy Corp. (TSXV: HRE | OTCQX: HREEF) announced this morning that Plant #3 of their 100%-owned Kashka Rare Earth Element (REE) Processing plant will be ready for operational testing by mid-July, 2012. The press release titled, Stans Energy to Commence Operational Testing at Kashka Rare Earth Processing Plant, also notes that by August 30, 2012, the Kashka REE Plant (KRP) is expected to produce heavy rare earth oxides of dysprosium, gadolinium, and erbium to 99.99% purity. This is timely and exciting news because it shows that despite current weak rare earth market conditions, rare earth companies continue to forge ahead with their projects and in the case of Stans Energy – transitioning from project development through infrastructure build-out and ultimately the production a rare earth product. This is significant news because the ability to produce a rare earth oxide (REO) product adds value to Sans Energy’s supply chain and it also spells positive news for downstream customers that are searching for alternative supply sources of rare earths outside of China.

David Vinokurov, Manager of Investor Relations at Stans Energy comments, “We are extremely pleased with the progress to date at the KRP. By producing 99.99% oxides from concentrates originating from Kutessay II, Stans Energy will demonstrate to the investment community and potential off-take partners that the company is transitioning towards becoming a near term REO producer. Our goal is to begin bridging the gap between supply and demand for firms looking for non-Chinese sources of Rare Earth products in the near term.”

Followers of the rare earth industry will know that a fundamental challenge to all new rare earth projects worldwide is the development of appropriate technology for the recovery and preparation of REEs in useable forms. Stans Energy is the holder of such proprietary technology that was developed and employed to recover and produce rare earth products at the KRP facility until operations were suspended in the early 1990s. Interestingly, though Plant #3 of the KRP facility has not been used in almost 20 years the production equipment has remained in place and is ready to be restarted. Stans Energy acquired the KRP facility in 2011 and since then has undertaken an extensive refurbishment program at Plant #3.

As part of this refurbishment program and in consultation with technical advisors from the Russian Research Institute of Chemical Technology (VNIIHT), the potential to recover approximately two tonnes of mixed rare earth oxides from concentrate that remains in holding tanks was realized. The concentrate consists of dysprosium, gadolinium, samarium, yttrium, holmium, ytterbium, erbium, thulium and lutetium.

Currently VNIIHT in designing new technology that will be used in Plant #1 that was historically used to crack concentrate from the milling stage and remove radioactivity before it was sent to Plant #2 where solvent extraction occurred. Stans Energy is also investigating the potential to rehabilitate Plant #2 versus the construction of a new plant with a 1,500 tonnes per year capacity using solvent extraction equipment. Until this has been decided pilot scale extraction testing will continue at Plant #3.

Stans Energy anticipates that the process circuit design will be finalized by the third-quarter of 2012 and that this new design will be incorporated into the Bankable Feasibility Study (BFS) that is also expected to commence in the third-quarter of this year.

Here are some additional historical notes:

  • In December 2009, Stans Energy acquired a 20-year mining license for the past-producing Kutessay II rare earth mine from the Kyrgyz Republic.
  • On May 26, 2011 Stans Energy completed the purchase of the Kashka Rare Earth Processing Plant the same plant that previously refined REEs historically from Kutessay II.
  • The KRP was the only hard rock plant to produce all rare earth elements outside of China, producing 120 different metals, alloys, and oxides. For over 30 years, Kutessay II produced 80% of the rare earth metals for the former Soviet Union.