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viewSpectrum Rare Earths Ltd

Spectrum Rare Earths looks to attract industry partner at Skyfall

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Spectrum Rare Earths (ASX:SPX) has extended very shallow rare earth mineralisation at Skyfall over a strike length of 6 kilometres, and forms part of a district wide trend that covers five mineralised zones within a 40 kilometre strike length. 

Early stage metallurgical testwork is also indicating that low cost processing options will be available to produce a high quality, and high margin rare earth concentrate, with very low levels of contamination. 

Spectrum will look to attract a rare earth industry partner at either a project or equity level. Ongoing metallurgical and exploration work should assist this cause.

The Company continues work on its flagship project known as Skyfall, that is located 100 kilometres west of Katherine in the Northern Territory.

The Company has undertaken trenching and drilling to define at surface, flat lying Exploration Target of approximately 17 to 21 million tonnes @ 0.4%-0.6% Total Rare Earth Oxides (TREO) of which 36% to 38% are Magnetic End Use Rare Earth Oxides (MEU REO), and which is estimated to contain rare earths of between 68,000 tonnes to 126,000 tonnes (using the 2012 JORC Code).

Recent diamond drilling and trial pitting extended significant mineralisation to over 6 kilometres in strike length and 350 metre width. 

Significant pit assays include:

TP5 with 2 metres @ 0.66% TREO from surface (42% Magnetic End Use Rare Earths (MEU REO);
TP7 with 2.4 metres @ 0.58% TREO from surface (38% MEU REO);

Trial pit TP7 extended mineralisation 2 kilometres south of previously reported significant intersections, with mineralisation being present over the full depth of the pit and remains open.

Assays remain pending from diamond holes SKDH05-SKDH08 where target geology and elevated portable rare earth XRF readings have extended mineralisation over 2 kilometres south of previous drill holes. This includes three shallower diamond holes (SKDH06—SKDH08) which were drilled for 90 metres to target near surface mineralisation at the southern end of Skyfall. Drilling intersected target geology and elevated hand held XRF rare earth readings were reported in the surface target zone. 

Formal assay results are expected shortly.

Potential for mineralisation to extend at depth appears likely.

During the quarter, one hole was drilled to a depth of 306 metres to target primary mineralisation beneath Skyfall. Given the extent of near surface mineralisation the Company believes that potential exists for multiple zones or primary feeder zones to extend at depth. 

Drilling (SKDH05) targeted within a major fault corridor was aimed under an area of the strongest Magnetic End Use Rare Earth geochemical response. Hand held XRF analysis of this hole has revealed relatively elevated readings in flat tabular zones from surface. Repeating anomalous zones were noted from 0-20 metres, at 28 metres, at ~36 metres, at ~50 metres and at ~297 metres . Formal assays are pending.

Scanning electron microscopy analysis of these deeper flat lying rock zones in fresh rock from 36 metres down hole and deeper, showed more common primary rare earth mineralogy such as monazite. Closer examination of the mineralogy suggests the zones may be sedimentary in nature which is similar to a placer deposit, although some of the deeper zones showed evidence of secondary mobilisation by hot fluids within the rocks.

Technical analysis shows that the more economically important types of rare earth minerals such as xenotime and crandallite group minerals are present at Skyfall, and are found where these primary zones hit the surface and weather. The presence of these multiple zones therefore increases the prospectivity across the Skyfall Rare Earth District.


Metallurgical studies

Recent diamond drilling and trial pitting operations have provided bulk samples for more comprehensive mineralogical and metallurgical testing on the near surface mineralisation.

Work to date has defined potential advantages offered by Skyfall’s unique weathered mineralised profile.

The main REE bearing minerals include secondary yttrium phosphate (xenotime-churchite) and aluminium phosphate/crandallite group minerals such as florencite. Both these mineral groups are relatively well understood from a mineral processing perspective.

Importantly, yttrium phosphate and crandallite minerals are theoretically susceptible to magnetic separation and froth flotation beneficiation techniques. This is providing a route for concentration.

Initial un-optimised tests showed a positive magnetic and froth flotation response. This was achieved despite the REE mineralogy typically being very fine (<15 micron) and poorly liberated. 

Second stage testing in progress includes, grind size optimisation and beneficiation optimisation by magnetic separation and froth flotation techniques.

Results from the ongoing second round of testing show a strong direct flotation response for both the heavy rare earth chemistry (likely yttrium phosphate/xenotime phase) and the light magnetic rare earth chemistry (aluminium phosphate/crandallite group minerals). 

Optimisation work has commenced on this direct froth flotation route with meaningful results and initial concentrate grades expected in mid-November.

In addition, the fine secondary (weathered) nature of the rare earth minerals suggests that they will be susceptible to more dilute re-agent, atmospheric temperature and pressure leaching techniques. This provides the potential for efficient processing (subject to ongoing test-work which will continue after any mineral concentrate production).

Very low levels of contaminants is a major competitive advantage 

A competitive advantage to the Skyfall Prospect is that it has very low levels of deleterious elements thorium and uranium within its mineralisation (12.5ppm and 32ppm respectively from recent drilling). 

This could potentially reduce the cost of production and could increase saleability of any final product.

Potential for multi deposit development 

Recent work has continued to highlight the greater potential of the District which covers 2,137 square kilometres and is 100% owned. Exploration shows the mineralised district to be over 40 kilometres wide with five zones of potentially significant mineralisation now being delineated at Skyfall, Stromberg, Scaramanga, Largo and more recently Sévérine.

The metallurgy and geology at Skyfall shares similarities with the metallurgy at the xenotime dominant HREE deposit at Stromberg which is only 10 kilometres to the northwest. 

The two deposits may complement each other in any eventual mineral processing circuit. Bulk sampling has been undertaken at Stromberg and metallurgical test data is expected shortly.


Near term catalysts

These include:

- Release of assay data from Skyfall.

- Metallurgical and mineralogical test work on diamond core and trial pit samples from both Skyfall and Stromberg continue. 

- A rare earth industry partner at either equity or debt level. 

Favourable metallurgical test work may be a catalyst to attract such a partner and lead to a significant re-rating of the Company.

In mid September the Company issued 20 million shares at $0.04 to raise $800,000, and currently holds $632,000 in cash. A Research and Development Tax Rebate for Skyfall may net $160,000 in early 2015, and a Northern Territory Government grant of $20,000 was awarded.  


Valuation

Skyfall and Stromberg REE composition concentrated in those rare earths that are in highest demand and include Nd, Pr, Dy, Tb, Gd, Sm, and Eu, and host a globally significant prospect size especially when compared to other Heavy Rare Earth (HREE) prospects.

Recent testwork is indicating low cost mineral processing options including secondary beneficiation of Xenotime and Crandallite Group and a low stripping ratio and potential for free dig at very low cost due to Skyfall's surface weathered tabular mineralisation. 

Development drilling and pitting costs and time have also been cut significantly due to the very shallow nature of the deposit.

The potential for a lower capital start up afforded by Heavy Rare Earth minerals such as Xenotime (typically HREE plants are much smaller than Light Rare Earth (LREE) plants), and extremely low levels of contaminants such as Thorium and Uranium, reduce penalty levels and produce a much cleaner concentrate. 

The Company has 100% district wide control with large exploration potential, and is proximate to infrastructure and the Port of Darwin (gateway to Asia) that in the longer term will be very attractive to a strategic venture partner.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

Quick facts: Spectrum Rare Earths Ltd

Price: 0.077 AUD

ASX:SPX
Market: ASX
Market Cap: $106.68 m
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