March quarter sees a raft of rare earth developments

Technological advances in the last 40 years have seen rare earth elements (REEs) become integral to a wide and growing range of applications because of their metallurgical, magnetic and electrical properties.

The lustrous, silvery-white metals underpin the tech sector, being integral to computing and audio-visual equipment, but are also found widely in motor industry alloys, glassware, medical imaging and even petroleum refining.

According to Geoscience Australia, the group of 17 metals classed as REEs, which includes elements like lanthanum, praseodymium, neodymium, promethium, dysprosium and yttrium, are not all particularly rare, but extraction and processing make them difficult to access on a commercial scale.

Since the 1980s, China has been the world’s biggest producer of REEs, overtaking earlier source countries like Brazil, India and the US, which started using REEs extensively following the advent of the colour television set, in which they were a key component.

Rare earth stocks – what the market tells us

In much the same way as battery metals, REE stocks have seen a boom in recent times, caused by factors including:

• The ESG-driven impetus to move to Tier 1 mining jurisdictions and to be able to trace the sustainability pedigree of supply; and
• Broader geopolitical considerations which include diversification and security of supply at a time when relations with the largest producer have been fraught.

REEs are regarded as critical or strategic minerals and governments around the world are shoring up protection of these commodities as a matter of national interest. The Australian Government’s Critical Minerals Strategy is an example of this.

For the foreseeable future, the sector can expect to receive considerable attention.

In the spotlight: ASX rare earth stocks

Australian rare earth miners had a busy March quarter. Here we look at what they were up to – and where – and how they performed.

Kingfisher Mining

Kingfisher Mining Ltd (ASX:KFM) made a significant REE discovery at its Mick Well Project in the Gascoyne region of WA, with 12 metres at 1.12% total rare earth oxides (TREO), including 4 metres at 1.84% TREO.

A follow-up drill program at the MW2 prospect kicked off post-quarter, targeting additional REE targets within a 54-kilometre corridor.

Just after the end of the quarter, tenements were granted over the western extensions of this REE target corridor, a significant step ahead of planned airborne magnetics and radiometric surveys designed for the area.

The company also received results from previous drilling at Mick Well in March, including 4 metres at 0.27% TREO, 4 metres at 0.18% TREO and 4 metres at 0.17% TREO.

Fieldwork has been promising, identifying an initial seven clusters of carbonatite intrusions known to be associated with REE mineralisation.

Australian Strategic Materials

During the March quarter, Australian Strategic Materials Ltd wrapped up construction of the buildings and facilities at the Korean Metals Plant (KMP) and the plant was officially registered.

The installation and commissioning of the first phase of the KMP will continue in the current quarter, with an installed capacity of 2,200 tonnes per annum.

ASM continued to work on progressing the financing of the Dubbo Project. During the quarter, an Expression of Interest from the Korea Trade Insurance Corporation, K-Sure, was received for potential export credit insurance support to ASM to finance the development of the project.

Following an optimisation study it conducted in December last year, the company submitted a modification report for the Dubbo Project to the NSW Government, which incorporated proposed plan and design improvements.

There were board changes during the quarter, including the retirement of long-serving non-executive director Ian Chalmers, whose leadership was key on the Dubbo Project, and welcomed Kerry Gleeson FAICD.

Arafura Resources

Arafura Resources Ltd believes its Nolans Project demonstrates strong alignment with the Federal Government’s 2022 Critical Minerals Strategy and budget initiatives, citing continued neodymium and praseodymium (NdPr) price rises in the quarter, which provide confidence in the project economics.

The company is engaging with South Korean customers looking to secure long-term strategic supply of NdPr, signing a joint statement of cooperation with Korea Mine Rehabilitation and Mineral Resources Corporation.

During the quarter, the company announced the appointment of Société Générale and the NAB as mandated lead arrangers to execute an export credit agency-driven debt funding strategy. It reported a strong cash position of $33.5 million to continue front-end engineering design (FEED) with supplier Hatch, in line with Arafura’s schedule.

The company hopes a $30 million grant under the government’s Modern Manufacturing Initiative will contribute to construction of the Nolans Project’s rare earth separation plant.

PVW Resources

Fieldwork at PVW Resources Ltd (ASX:PVW)’s Tanami Gold and Rare Earth Element (REE) Project has been hampered by the wet season and a high local COVID caseload, but the exploration team has taken the time to focus on mineralogical study results, metallurgical test-work and planning for the 2022 exploration drilling program.

Highlights from the quarter include five 20-kilogram metallurgical samples returning strong surface mineralisation with up to 8.43% TREO, and a metallurgical sample average heavy rare earth oxide (HREO) percentage of 80% including an average of 2,990 parts per million (ppm) dysprosium oxide and up to 5,795ppm dysprosium oxide.

Ore sorting and magnetic separation testing were both successful in upgrading the rare earth grade of samples while rejecting significant mass, indicating the potential to save on downstream processing costs.

Average drill core composition as determined by ore sorting technology.

The 2022 drilling program has been designed with the initial phase being 10,000 metres of reverse circulation (RC) drilling and 25,000-metres of aircore drilling. The program will also include further ground-based reconnaissance work to follow up additional targets.

Northern Minerals

Northern Minerals Ltd (ASX:NTU) wrapped up a strategic review in the March quarter, which concluded that producing and marketing a mixed heavy rare earth concentrate from the proposed commercial-scale beneficiation plant at Browns Range is its preferred near-term strategy.

Meanwhile, the Browns Range Pilot Plant has been placed on care and maintenance.

Further drill assays returned during the quarter demonstrate prospectivity at the Zero, Banshee and Rockslider prospects, with results including:

• 12 metres at 0.62%TREO from 36 metres (Zero);
• 23 metres at 1.12% TREO from 30 metres (Dazzler);
• 57 metres at 0.24% TREO from 4 metres (Rockslider); and
• 13 metres at 0.59% TREO from 43 metres (Banshee).

A follow-up RC and diamond core drill campaign is planned for the second half of 2022.

Map of the Browns Range Project.

Krakatoa Resources

Krakatoa Resources Ltd (ASX:KTA) has been busy at the Mt Clere Project in the Yilgarn Craton in WA, which the company believes contains significant REE opportunities.

In particular, REEs are thought to be hosted in previously identified widespread monazite sands concentrated within the drainage networks of the northern tenure, and within REE ion adsorption clays located within the widely preserved deeply weathered lateritic profiles developed in gneissic rocks.

There is also the potential for REE-rich carbonatites like those associated with the adjacent Mt Gould Alkaline Province.

The company has been granted a significant new landholding – 2,241 square kilometres – at the Rand Project, which it believes is prospective for hosting REEs within the clay regolith similar to that discovered over the Rand Bullseye prospect area.

Also at Rand, metallurgical test-work is underway at the Bullseye prospect, targeting REEs.

The company’s cash-on-hand position at end of the quarter is $0.73 million, and post-quarter it completed a $5 million capital raise led by Alto Capital.

American Rare Earths

This quarter, American Rare Earths Ltd (ASX:ARR) partnered with leading research organisations in the US to focus on new technology for sustainable, bio-based extraction, separation and purification of rare earths.

At La Paz, the company’s flagship project, work has continued as planned to increase the 170-million-tonne JORC resource, with drill permits approved for the new southwest area of the project promising a target estimate of 742 to 928 million tonnes and 350 to 400 TREO, which is in addition to the existing JORC resource.

Meanwhile, the Halleck Creek Project is expected to contain even more resources than La Paz. Around 308 to 385 million tonnes of REE mineralised rocks were identified as an exploration target with an average TREO grade of 2,330ppm to 2912ppm. Permits were approved and drilling commenced in March 2022 with results from the drilling expected in June 2022.

American Rare Earths ended the quarter with a cash balance of $8,293,340 and holds 4 million Cobalt Blue Holdings shares worth around $3.36 million.

Drill core from La Paz, featuring epidote alteration.

Board movements included the appointment of Richard Hudson and Sten Gustafson (US) as non-executive directors, while Noel Whitcher, the company’s CFO, was appointed as company secretary.