Coffee with Samso Episode 178 is with Kevin Das, executive director of West Cobar Metals Ltd (ASX:WC1).
The REE story is maturing for investors as the complexity of what a good REE project is has moved several levels. What is still lagging is a sound grounding on what exactly is an economic REE. There have been several stories on Samso but I have to admit that the jury is still a long away from a decision.
When Kevin Das, the Executive Director, of West Cobar Metals approached me to engage a Coffee with Samso, we spoke deeply on what makes West Cobar different to other REE stories. The first major difference is the existence of a JORC resource for the Salazar REE project. This resource does give WC1 a first mover advantage but the competition is fast catching up.
The details of the resource may ultimately be the difference but we will need to wait for some critical steps such as the metallurgical results. The other factor which would drive this story further is the fact that the deposit sits on top of an ultramafic base. What this means is unknown for now. There is evidence of other deposits that the enrichment of the REE is related to the base.
Salazar is the only REE deposit that I know of that is not on a granitic base. To add to the story, there is an HPA story here. There is an aluminium inferred resource on part of the Salazar resource. This may become a credit to the mining process and hence benefit the overall feasibility of the deposit.
The West Cobar Story
West Cobar is a minerals exploration and development company focused on rare earths and battery minerals within Australia and the US. Their projects include:
1. The Salazar REE Project
The Salazar Rare Earths Clay Project is located on non-agricultural undeveloped state land approximately 120km north-east of the township and deep-water port of Esperance in Western Australia. The Newmont deposit, located on the easternmost tenement at Salazar, contains an estimated JORC Inferred Mineral Resource of 43.5Mt at 1192ppm TREO + Y2O3 (500ppm cut-off). The O’Connor prospect to the west of Newmont has potential to host further significant high-grade rare earths mineralization.
Figure 1: Location of the Salazar Project. (Source West Cobar Metals Limited)
2. Nevada Lithium Project
The Montezuma Well and Big Smoky Valley claims are considered prospective for large-scale sedimentary-hosted lithium claystone deposits. The claims are located within the world class mining-friendly jurisdiction of the Nevada lithium district and host similar geology to known major lithium deposits in the region – including American Lithium (TLC deposit), American Battery Technology Company (OTCQB:ABML) (Tonopah Flats deposit), Ioneer (Rhyolite Ridge deposit) and Century Lithium (Clayton Valley deposit).
Figure 2: Location of the Nevada Lithium projects. (Source West Cobar Metals Limited)
3. Hermit Hill Lithium Project
The Hermit Hill project area is located in the Litchfield Province in the Northern Territory, roughly 100km south-southwest of Core Lithium’s Finniss Lithium Project and Lithium Plus Minerals’ Lei lithium prospect, and 30km west of Ragusa Minerals’ Tank Hill lithium discovery. The project is prospective for pegmatite-hosted lithium mineralisation.
Figure 3: Location of the Hermit Hill project. (Source West Cobar Metals Limited)
The West Cobar Difference
Currently, on the Australian Stock Exchange (ASX), there seems to be an overflow of REE stories. Every week there are companies announcing the presence of REE and one could be forgiven for feeling a sense of boredom. When the REE story emerged nearly 2 years ago, there was excitement and a bullish feel to this sector. However, as investors start to get a flood of news, this excitement starts to turn into confusion.
What I can say about the Salazar REE deposit is that it holds a few points of difference. It is still a clay hosted deposit as opposed to the ionic versions but the high grade nature of the resource - 43.5Mt @ 1192 TREO, makes this one of the deposits to take note.
On top of the REE resource, there is an HPA inferred JORC Resource of 28.3 Mt at 23.4% Al2O3 (at 10% cut off). How this adds to the economics of the mining of the Salazar REE story is yet to be played out. The positive would be that it adds credit to the process and lowers the overall feasibility and the downside is that it is mined and put aside. As the HPA content is part of the overall Salazar deposit, it means that there is no extra cost in mining it or isolating it.
The clay mineralisation at Newmont has a relatively high magnet rare earth oxide content comprising about 25% of the basket. In particular,, the Newmont deposit is relatively high in high value, heavy magnet REE content, comprising 3% dysprosium and 0.5% terbium content.
Praseodymium makes up 4.2% and neodymium 16.8% of TREO (See Figure 4).
Figure 4: REE distribution within the Salazar deposit. (Source: West Cobar Metals Limited).
The other factor which may eventually affect the leachability of the deposit may lie in the fact that this deposit is overlaying a ultramafic (Amphibolite) basement. Like many of the REE stories, the outright understanding of the flow chart of processing is still a work in progress. This ultramafic basement is the key difference as all the other known Australian clay hosted deposits sit over granitic source.
Samso's Conclusion
These days, there is a large volume of REE deposits being marketed. We know that there is a Clay-hosted and an Ionic-hosted REE deposit. The difference is in the ability to easily extract the REE in the downstream process. I have spoken to people who tell me that the difference is not a physical or grade factor, but in the test of whether they are easily leached out.
The host of ionic deposits are not restricted to the Chinese version as they are also granitic base. I know of an Australian ionic style being hosted over a limestone which is totally different. I am told that research has shown that the enrichment may be helped by the limestone interface.
If this is true, will the fact that the West Cobar deposit being overlaying an ultramafic source lead to a different leaching style? Management seems optimistic but let's wait for the facts.
If we want to look at which of the REE stories are going to have the legs to be at the mining and processing stage, then the oddballs like the Salazar REE project should be on our watch screens. Remember that there is also the potential for the mining of the HPA which is again something that is not present in all the other stories presently being sold in the ASX.
Chapters:
00:00 Start
00:20 Introduction
01:29 About Kevin Das
02:01 Kevin’s experience at Northern Minerals
03:44 All about the Salazar Rare Earth Project
04:21 The unique aspect of the Newmont deposit
05:37 The drill results at Salazar
06:29 The resource in Esperance
07:09 Understanding the drill results
10:34 West Cobar Metals being a first mover
12:14 The Alumina resource in Newmont
16:31 Projects in the US
17:21 Discussion about the journey of rare earths
21:52 The rare earths capital market
23:49 News flow
26:54 Challenges faced by West Cobar Metals
29:01 Why West Cobar Metals?
30:02 Conclusion
PODCAST
About Kevin Das
Executive Director
Kevin Das is an Australian qualified mining professional with over 18 years’ experience in the exploration and mining industry. He has worked in a variety of mining jurisdictions as a senior geologist and has undertaken various technical and corporate roles including business development, project management and company management.
Kevin established the ARD Group in 2016 with the goal of establishing a multi-discipline fund that would effectively allocate capital into the natural resources sector. Kevin is the Co-founder and Director of ARD Group.
With over 12 years’ experience in the rare earth industry and formerly a Senior Geologist for Northern Minerals, Kevin was involved in the virgin discovery and development of the Browns Range Heavy Rare Earth Deposits.
About West Cobar Metals Limited (ASX: WC1)
West Cobar Metals Limited (West Cobar Metals Ltd (ASX:WC1)) is a minerals exploration and development company focused on rare earths and battery minerals within Australia and the US.
The Salazar REE Project
The Salazar Project comprises granted tenements E63/1469 and E63/1496 located on non-agricultural undeveloped state land approximately 120km north-east of the township and deep water port of Esperance (Figure 1). In terms of geological setting, it is situated in the eastern part of the Proterozoic Albany-Fraser Orogen, east of the Biranup and Fraser Zones, straddling the Heywood-Newman Shear Zone and Nornalup Zone.
REE mineralisation at the Newmont deposit (E63/1496) is hosted by in-situ regolith over Proterozoic-aged basement rocks. A geological model has been proposed by Salazar Minerals whereby granites containing REE carbonates and other REE minerals are the source rocks for secondary REE mineralisation in the overlying saprolite profile. Mineralogical studies have indicated that the saprolite targets contain fine-grained secondary REE-bearing phosphates.
Newmont Mineral Resource
Salazar Minerals was one of the first companies to appreciate the potential for clay REE deposits in Australia. The tenements were first acquired in 2011 (granted in 2012) with the private company carrying out several aircore drilling programs to test for REE mineralisation. In total 165 aircore and RC holes for 6393m have been drilled within the tenements, leading to the discovery and delineation of the Newmont deposit.
CSA Global ("CSA") was engaged by Salazar Minerals to estimate a Mineral Resource for the Newmont deposit in 2015. CSA estimated an Inferred Mineral Resource of 43.5Mt at 1192ppm TREO + Y2O3 (500ppm cut-off) in accordance with the JORC Code (2012).
Table 2: Salazar Resource.
Modelling of the Newmont REE Deposit by CSA Global.
The Newmont deposit also hosts an Inferred Mineral Resource of 31.2% Al2O3 (15% Al cut-off) in accordance with the JORC Code 2012 (Table 2). The high-grade alumina within kaolin-rich zones has potential to be feedstock for production of high purity alumina.
Lab test work demonstrates that this material shows high leach extraction and high purification grades to produce 99.99% (4N) High Purity Alumina (HPA).
O’Connor Prospect
The Salazar Project also includes the O’Connor prospect (E63/1469) which is located 10 kms to the south-east of the Newmont Deposit. The O’Connor Prospect has 32 vertical holes drilled for a total of 901 meters. Some of the drill intersections at O’Connor include:
- SAC160, 19m @ 1939 ppm TREO + Y2O3 from 8m
- SAC161, 20m @ 2392 ppm TREO + Y2O3 from 7m
- SAC162, 19m @ 1350 ppm TREO + Y2O3 from 17m
- SAC179, 9m @ 3258 ppm TREO + Y2O3 from 14m
- SAC178, 10m @ 1586 ppm TREO + Y2O3 from 10m
- SAC188, 23m @ 1454 ppm TREO + Y2O3 from 16m
- SAC157, 17m @ 1186 ppm TREO + Y2O3 from 15m
- SAC159, 12m @ 1110 ppm TREO + Y2O3 from 8m
O’Connor Prospect air core drill hole collars (E63/1469).
O’Connor Prospect cross section (E63/1469).
Newmont Metallurgy & Studies
Technical work on the deposit has involved reputable institutions including the CSIRO, the University of Western Australia and the University of Newcastle and mineral processing firms Nagrom and Amdel.
- Early metallurgical studies and characterisation testwork show the REE clays are amenable to acid leach processing
- Magnet rare earths (MREO) - Neodymium, Praseodymium, Dysprosium and Terbium concentrations up to 25%
- Heavy rare earth (HREO) concentrations up to 30%
- Critical rare earth (CREO) concentrations up to 37%
Nevada Lithium Project
The Montezuma Well and Big Smoky Valley claims are considered prospective for large-scale sedimentary-hosted lithium claystone deposits.
The claims are located within the world class mining-friendly jurisdiction of the Nevada lithium district and host similar geology to known major lithium deposits in the region – including American Lithium (TLC deposit), American Battery Technology Company (Tonopah Flats deposit), Ioneer (Rhyolite Ridge deposit) and Century Lithium (Clayton Valley deposit).
Hermit Hill Lithium Project
The Hermit Hill project area is located in the Litchfield Province in the Northern Territory, roughly 100km south-southwest of Core Lithium’s Finniss Lithium Project and Lithium Plus Minerals’ Lei lithium prospect, and 30km west of Ragusa Minerals’ Tank Hill lithium discovery. The project is prospective for pegmatite-hosted lithium mineralisation.
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About Samso
Samso is a renowned resource among the investment community for keen market analysis and insights into the companies and business trends that matter.
Investors seek out Samso for knowledgeable evaluations of current industry developments across a variety of business sectors and considered forecasts of future performances.
With a compelling format of relaxed online video interviews, Samso provides clear answers to questions they may not have the opportunity to ask and lays out the big picture to help them complete their investment research.
And in doing so, Samso also enables companies featured in interviews to build valuable engagement with their investment communities and customers.
Headed by industry veteran Noel Ong and based in Perth, Western Australia, Samso’s Coffee with Samso and Rooster Talk interviews both feature friendly conversations with business figures that give insights into Australian Stock Exchange (ASX) companies, related concepts and industry trends.
Noel Ong is a geologist with nearly 30 years of industry experience and a strong background in capital markets, corporate finance and the mineral resource sector. He was founder and managing director of ASX-listed company Siburan Resources Limited from 2009-2017 and has also been involved in several other ASX listings, providing advice, procuring projects and helping to raise capital.
He brings all this experience and expertise to the Samso interviews, where his engaging conversation style creates a relaxed dialogue, revealing insights that can pique investor interest.
Noel Ong travels across Australia to record the interviews, only requiring a coffee shop environment where they can be set up. The interviews are posted on Samso’s website and podcasts, YouTube and other relevant online environments where they can be shared among investment communities.
Samso also has a track record of developing successful business concepts in the Australasia region and provides bespoke research and counsel to businesses seeking to raise capital and procuring projects for ASX listings.
Disclaimer
The information contained in this article is the writer’s personal opinion and is provided for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. Read full disclaimer.
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