Black Ridge Mining (ASX: BRD) has commenced due diligence at Rare Earths project in Mongolia, under a Heads of Agreement signed earlier this month.
The main ore body at the Mongolia project is contained within an alkaline, igneous, elliptical shaped intrusion that is 550 metres long and 200 metres wide.
Previous work indicates the potential for Heavy Rare Earth Elements at grades of between 300 and 400 parts per million, with an exploration target of between 20 and 25 million tonnes. Meanwhile, the topography appears to be favourable for an open cut operation.
Samples assayed at the project in mid-2011 confirmed encouraging concentrations of lanthanum, scandium, yttrium, cerium and other elements.
Importantly, the project has also demonstrated potential for vanadium, tungsten, chrome and scandium, complementing Black Ridge’s Unaly Hill vanadium project in Western Australia, where the company has a maiden Inferred Resource of 86 million tonnes at 0.42% vanadium.
Samples have been submitted for assaying, and once the results are confirmed, Black Ridge will proceed to drilling with the aim of establishing a JORC Resource for the deposit.
Close to transport infrastructure
The availability of well-developed infrastructure in the area is a plus for the company, with the project licence is located in the Tuv Province, 80 kilometres east of Ulaanbaatar, and is easily accessible via paved roads.
Ulaanbaatar is known as Mongolia’s road and rail transport hub, with the city’s rail connected to systems in Russia and China.
Rare earth ore from Black Ridge’s project could be transported by rail through Russia to the international port of Vladivostock, enabling the company to export to numerous international markets.
Black Ridge plans to target manufacturers in the United States, Japan, South Korea and India among others.
Developing a rare earth project in Mongolia, China’s northern neighbour, will enable Black Ridge to help fill the gap left by China’s diminishing export quotas for the in demand resources.
Heads of Agreement
Early in March Black Ridge signed a Heads of Agreement to develop the 7,750 hectare rare earths project that gives the company the right to earn up to 80% in the project.
Consideration for the deal comprises projected expenditure of $5.5 million over the next three years along with a final payment to the vendors of $750,000.
In addition, Black Ridge agreed to issue 10 million shares as an introductory fee. Black Ridge’s last price prior to the announcement of the deal was about $0.005, valuing the share issue at about $50,000.