Namibia Rare Earths (TSX: NRE) Explores a Significant Unique Deposit of Heavy Metals in Southern Africa Lofdal Project
|
By Dr. Allen Alper
on 2/4/2014
Don Burton, President of Namibia Rare Earths (TSX: NRE and OTCQX:NMREF)
Don Burton, President of Namibia Rare Earths (TSX: NRE and OTCQX:NMREF), offered an update to investors regarding the progress of their Lofdal heavy rare earth project located in Namibia at the Cambridge House Investment Conference in Vancouver.
The company has had a lot of recent developments. Said Burton, “We are focused on moving into producing a high quality mineral concentrate from our project. We need to convey to the market the value of this project compared to our peers.” The market has forced many changes in the rare earth sector over the last few years. Said Burton, “There has been quite a cull of companies out of the rare earth space. That is, in large part, a result of the pricing of rare earths, which is down 80-90 percent.” While there were originally quite a few companies in the rare earth sector, the number has dropped suddenly, with Namibia Rare Earths being one of the survivors. Said Burton, “There were 300. I think we are going back to twelve. The market now understands that the sector has limited room, and many juniors “jumped on the band wagon” when prices sky rocketed. ”
One of the reasons that Burton believes his project will survive the changes in the market is due to the quality of the rare earths that are available. Burton said, “Our project, Lofdal, will survive this cull because of its nature. It is a pure heavy earth play. It has simple mineralogy.” The type of mineralogy that is present at Lofdal is amenable to extraction without new technology – a significant advantage. Said Burton, “We have the most highly enriched heavy rare earth mineral (called xenotime) and it has been commercially cracked successfully in the past. We are not faced with the issue of looking for a new process to extract the rare earths. That is significant in de-risking the project.”
With their new discovery, Namibia Rare Earths is looking for a technical partner to assist them with the production portion of the project. Said Burton, “We recognize our strength in exploration and discovery. We understand how complex the rare earth sector is with extraction and end use agreements. What we are looking to do in the near term – in the next six months—is to find a strategic partner who knows how to extract rare earths and that has experience in offtake agreements and clients who can use the product. We do not want to get involved in that. We would rather give up a portion of the project to a qualified partner.”
Namibia Rare Earths is communicating their story to the market in a way that fully explains the benefits that Lofdal provides. Said Burton, “The other issue that we have been dealing with is in having people appreciate why this project should be one of the survivors, since it isn’t a large resource.” One thing that does make this project unusual is the size and the ability of the project to support the global need for heavy rare earths. Burton said, “We currently have a resource of 20,000 tons. When you consider the level of heavy rare earth enrichment at Lofdal and you think about mining less than 1 million tonnes per year, we could be producing 10-15 percent of the world’s supply, even though it is a small deposit.” Having an opportunity to provide that level of production from a small deposit gives Namibia Rare Earths an edge in the market. He said, “It is a significant output even though it is a small project. China controls all of the heavy rare earth production right now. They control the global supply chain through the imposition of export quotas. China only allows 3800 tons of heavy rare earths out of the country right now. Our project could produce half of that amount each year. If we can find the right partner we could become the first sustainable heavy rare earth provider outside of China.”
Given that opportunity, the company is attentive to the possibilities that the Lofdal project can provide. Said Burton, “We are really focused on the metallurgy and optimizing the best grade mineral concentrate we can produce. We believe that would be enough to attract a qualified technical partner. We just drilled some metallurgical samples, about 2000 tonnes, which has just been delivered to the lab in South Africa. We’d like to see the concentrate grades up to 20%. We are optimizing that.” All of this work is designed to help them to form a strategic partnership. Said Burton, “We are quite confident that we should have sufficient work done that would allow us to attract the right partner. If we can attract a partner, we would like to focus just on this initial resource that we have. It occurs in a carbonatite deposit that covers over 200 km2. We would like to design a partnership where the technical partner would develop the production side for the business, and we would concentrate on further exploration within the project area. From discussions we have had with people based on a conventional open pit mine and concentrate plant, we believe that the capex would be 100-150 million tops. I think this is financeable.”
The company is financially solid, especially if they are able to attract a joint venture partner. Said Burton, “We are still in good shape. We have $8-$9 million in the treasury with no debt. We would like to do a feasibility study with a partner and let the partner handle that to protect our cash position. We are good for another two years without having to go back to market. If we are successful with the right kind of agreement we hope we will not have to go back to market ever. We are coming to the point in the rare earth space where the solid companies will be the survivors and there will not be many of them. Investors can now look at a select group of companies. We believe that we will stand out in that group.”
http://www.namibiarareearths.com/
Suite
306, Royal Bank Building
1597
Bedford Highway
Bedford,
NS B4A 1E7
PHONE:
+01.902.835.8760
FAX:
+01.902.835.8761
EMAIL:
info@NamibiaREE.com
|
|