IM Rare Earths News in Brief 25 February – 2 March

By Laura Syrett, Albert Li
Published: Monday, 02 March 2015

China’s Fanya launches rare earths contracts on Xiamen exchange; Geomega spins off R&D arm

China’s Fanya Metal Exchange has listed three rare earths contracts for dysprosium, terbium and neodymium oxide in Xiamen, southeast China, through the newly founded Xiamen Fanya Mercantile Exchange, it emerged late last week.

The Xiamen Free Trade Trail Zone was opened on 27 February and the Xiamen Fanya Merchandise Exchange will trade in the Xiayu free tax zone of Xiamen city, Fujian province, China.

The zone is the second free trade in China after Shanghai and aims to become a global trading centre.

Quanxun Chen, the director of China Non-ferrous Industry Association, said at the opening ceremony that he hoped the exchange could help to improve China’s rare earths price system and exert an influence in the global rare earths market.

The exchange signed deals with three dealers and eight banks and all three contracts, worth a total of Chinese renminbi (Rmb) 30m ($4.8m*), sold out in under three seconds, according to local media reports.

In exploration news, TSX-V-listed Geomega Resources Inc. has created a private subsidiary business under the name Innord Inc.

Geomega will transfer its separation rights and laboratory equipment to Innord, which will conduct all of the company’s future research and development initiatives, starting with the scale-up of Geomega’s proprietary separation process.

"The goal of Innord Inc. (…) is to optimise the value of the separation process by facilitating its development through direct investments of key financial partners," said Geomega’s CEO, Simon Britt, on announcing the spin-off.

Speaking to IM at the PDAC 2015 meeting in Toronto, Canada, today, Britt said: "It makes much more investment sense to have internal rare earth processing technology – otherwise it’s just sent off to processing companies in China for poor returns and no global supply advantage."

Fellow TSX-V-listed Ucore Rare Metals Inc. has successfully separated individual rare earth elements (REEs) at what it described as "high purity" levels from feedstock taken from its Bokan-Dotson Ridge project in southeast Alaska, US.

The company said that rare earth carbonates, or salts, were produced from a pregnant leach solution, using a proprietary molecular recognition technology (MRT) developed by Utah, US-based IBC Advanced Technologies.

Purity levels for the separated elements consistently met or exceeded 99% purity, Ucore said. The separation procedure, which employed a customised SuperLig hydrometallurgical process, was performed across the entire lanthanide series, the company added.

"The separation of high purity REEs, without the use of environmentally costly ad capital intensive solvent extraction methodologies, is a much sought after goal in the technology metals sector," said Jim McKenzie, Ucore’s CEO. "MRT offers a means of separating REEs to high purity in a rapid and cost-effective manner, and with an exceptional level of selectivity and precision."

In Australia, Northern Minerals Ltd has said that its definitive feasibility study (DFS) on the Browns Range rare earths deposit in Western Australia has confirmed the project as a "viable and profitable source of the critical heavy rare earth element, dysprosium".

The DFS also outlined a $106m increase in the project’s net present value to $552m, with an internal rate of return (IRR) of 34% and a payback period of 3.2 years.

Browns Range now has an estimated life of mine of 11 years, thanks to additional minerals resources at the Wolverine and Banshee areas of the project, as well as an optimisation in mining methods which improved recoveries from 88% to 93%.

Dysprosium output over the total life of mine is calculated at 3.13m kg (3,130 tonnes) and a 6% reduction in operating costs has been balanced by a 5% increase in estimated capital costs, thanks in part to increased spending on equipment, Northern Minerals said.

Also in Australia, multi commodity producer and explorer Alkane Resources Ltd has recorded a net profit after tax of Australian dollar (A$) $3.3m ($2.6m) for the half-year ended 31 December 2014, down from A$4m for the same period a year ago.

 

Profits were attributable to the company’s Tomingley Gold Operation (TGO) which produced 41,537 ounces of gold at an all in sustaining cost of $991/ounce for the six months. The company is using cash generated from TGO to help develop its A$1bn Dubbo zirconia and rare earths project (DZP) in New South Wales (NSW).

 

Alkane recently received advice that the NSW Planning Assessment Commission had completed its review of the project and had recommended it could be approved, subject to certain conditions. Alkane said that its initial internal review of the PAC recommendations did not indicate any material concerns for the development of the DZP.

 

Guernsey-registered Rainbow Rare Earths Ltd has been granted a mining licence for the Gakara rare earths project in Burundi by the country’s Ministry of Mines and Energy.

 

Rainbow’s mining licence is valid for an initial period of 25 years and is renewable thereafter. This was approved by a Burundian Council of Ministers following Rainbow’s submission of all requisite feasibility studies and the completion of all environmental and social impact assessments.

 

The company said that terms for a mining convention have also been negotiated and approved by Burundi’s government. Once the administration process has been completed, Rainbow will look to commence mining operations.

 

The mining convention addresses legal, fiscal and economic terms as well as rights and obligations which have been agreed by both parties. As stipulated in this convention and in accordance with the Mining Code of Burundi, the state will hold a non-dilutable 10% interest in Gakara project.

 

In financial news, Canada-based Quest Rare Minerals Ltd has accepted a committed private placement financing offer from Canadian private investor Ekagrata Inc. to purchase secured convertible notes worth Canadian dollar (C$) 2.5m ($2m).

 

The notes will be purchased direct by Ekagrata or one of its affiliates and will mature either on 31 December 2016, or when Quest receives payment for resource tax credits from the Quebec government – whichever is earlier.

 

Separately, the Quebec government has adopted a decree authorising Investissement Quebec to invest C$600,000 in Quest. The investment will consist of common shares and an equivalent number of common share purchase warrants.

 

Earlier this month, the company received a payment of C$3m for the refundable Quebec resource tax credits and mining duty credits for fiscal years 2010-2012.

 

*Conversions made March 2015