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Broken Hill Prospecting progresses name change as it accelerates La Paz Project development

The company intends to develop the La Paz project in Arizona to cater for increased demand for US-based rare earths.

Broken Hill Prospecting Ltd - Broken Hill Prospecting accelerates La Paz Project development, changes name to American Rare Earth Limited
Including scandium in the resource update could improve project economics

Broken Hill Prospecting Ltd (ASX:BPL) is accelerating the development of its La Paz Rare Earths Project in Arizona, USA, after a successful rights issue which resulted in the issue of 87.3 million shares raising a total of A$1.3 million.

The company has also recently sold its remaining equity interests in the Thakaringa Joint Venture in Broken Hill, NSW, to Cobalt Blue Holdings Ltd (ASX:COB) for $6 million.

This sale was the final step in the company’s transition away from Broken Hill to refocus on US operations, leading to a decision to change the company name.

To reflect this new direction, the board has resolved to change the name of the company to American Rare Earth Limited for which the ASX ticker code ARR is reserved.

US demand for rare earths

The US Government’s focus on establishing a domestic rare earth industry is a key driver and powerful incentive for the company to accelerate the growth and development of the La Paz project.

As a key US strategic resource, development of the project will provide output for US‐based processing.

The potential opportunity to capitalise on growing developments in the REE market is substantial.

BPL believes that localising the management and operations in the US is an important step in ensuring the enhancement of value of the project and the overall business.

Establishment of US operations

The company has prepared and sent a ‘plan of field operations’ to the Arizona State Land Department (ASLD) to notify them of plans to do surface sampling on the Arizona Mineral Prospecting permitted land at the La Paz project.

Local appointments have been made including geologist Larry Lehto, who worked extensively at La Paz during 2010‐2012 as a consulting geologist on the project in the field, and chair Clarence McAllister, who is the founder and chief executive officer of Fortis, a design-build general contractor in Phoenix.

The company expects that having a local board and US-based president and CEO will improve the potential for accessing the US Defence Forcew which has a current mandate to seek American‐based rare‐earth supply.

La Paz project location

Updating resource estimate

The NI 43‐101 resource estimate established in 2011 had an economic resource with indicated resources of 16.2 million tonnes at a grade of 373.4 parts per million and inferred resources of 112 million tonnes at a grade of 371.5ppm.

This equates to 12.1 million pounds and 83.3 million pounds of total REE respectively and the entire resource is within 100 feet (25 metres) of the surface, making it ideal for open-cast mining methods.

Over the last six weeks, the company’s technical team has completed importing the base data into a GIS model, which is the first of several key components in adopting all the known datasets into a single database.

The analysis of both the existing area and recently granted expanded footprint where samples were taken in quarter three 2019 is complete and confirms the extension of the resource.

Currently work is underway to analyse the inclusion of scandium with the aim of an updated resource estimate announcement in quarter four of 2020.

Scandium upside potential

Commercial levels of scandium were not included in the original resource and with current spot prices from US$3,000/kilogram to over US$5,000/kilogram, this may have a positive impact on the project’s economics.

Preliminary metallurgical analysis by Wood Consultants suggest the scandium can be separated using the same process as would be used to treat the REE.

A gap analysis is underway following the completion of an initial report by Wood consulting group which showed the potential metallurgical route for the processing of the ore which has a lack of hazardous radioactive materials, making processing and separation using existing proven technologies relatively straightforward.  

Scoping study planned

Whilst the initial resource provided a solid base case, the increasing of grades at depth, which were identified in several of the initial drill results, will be targeted as part of the exploration program underway.

Upon completion of the initial exploration program and updated resource estimate, a scoping study will be commenced with the aim of accelerating the project into development and subsequent production.

A trenching program, which aims to confirm the continuity of the two resource areas, is targeted as one of the first key activities to be undertaken.

Quick facts: Broken Hill Prospecting Ltd

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ASX:BPL
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