Hexagon Energy Materials (ASX:HXG) continues to focus on developing a downstream rare earth processing business while also seeking an appropriate strategic partner.
In its June quarterly report, Hexagon highlighted ongoing development of the RapidSX™ for rare earth separation of which the company holds an option to acquire a 49% interest.
Hexagon’s primary aim remains on developing a downstream rare earths and graphite processing business to service the high-growth e-mobility and renewable energy sectors.
The company is also advancing two highly prospective gold and base metals projects in Australia.
Hexagon completed the June quarter with a cash balance of $1.21 million.
Core focus is "moving forward with potential partners”
Managing director Mike Rosenstreich said: “Hexagon continues to pursue its interests in developing a rare earth metals downstream processing business in concert with an appropriate strategic partner, while at the same time advancing its highly prospective Australian gold and base metals projects.
“The core focus has been on moving forward with potential strategic partners to develop our rare earths strategy, which incorporates the innovative RapidSXTM technology for rare earth separation.
We are pleased that with Ucore’s acquisition of IMC, development and commercialisation work is progressing and serves to further de-risk the technology until we are able to exercise the option, sometime before October 10, 2020.”
Rosenstreich continued: “It is our intention to exercise our option and then to work with IMC/Ucore within the joint venture to commercialise and to utilise RapidSX for rare earths.
“At the same time, we continue to advance our two Australian exploration projects - gold at Halls Creek and added base metals at McIntosh, with the aim of delineating mineralised zones and preparing targets for follow up investigation and drilling.”
Halls Creek gold and base metals
One of Hexagon’s exploration stage projects in the Kimberley region of Western Australia is the Halls Creek Gold and Base Metals Project, where the company is undertaking a stage-based exploration program leveraging off the detailed aeromagnetic survey data flown in September 2019.
The HCP comprises 13 granted tenements spanning 657 square kilometres which host known gold and base metal surface mineralisation.
This planned exploration is set to follow-up several outstanding high-grade gold targets where a staged program, conducted over several months is planned to comprise geochemical, geophysics, geological mapping, and drilling.
Hexagon has engaged SRK Consulting to undertake the mapping and Integrated Geological Mining Services (IGMS) to efficiently target the geochemical sampling and drilling programs.
A budget of around $450,000 is allocated to this program, which includes prerequisite heritage surveys as required and site works.
McIntosh graphite and base metals
Until recently, Hexagon had focused on purely graphite exploration at the McIntosh project.
Due to the depressed market for flake graphite concentrates, Hexagon engaged independent consulting group, NV Resources, early in 2020 to review the project’s potential to host other base and precious metal deposits in addition to the existing graphite mineral resources.
The NV Resources team sourced and appraised high-quality historical data relating to the project and has identified a suite of compelling nickel-copper targets, which warrant further investigation
Hexagon’s next step is to compile the historical data into an ‘accessible’ database and apply modern exploration principles, leveraging off recent advances in reprocessing technology and ore deposit modelling to prioritise targets.
This will include structural stratigraphic interpretation and a package wide geochemical and geophysical compilation and data reprocessing for selected areas.
The work program will comprise two phases – the first consisting of a desktop review and the second consisting of digitally converting the historical hard copy data into modern GIS to allow interrogation and modern targeting.
Hexagon has already taken prudent steps to preserve its cash and minimise expenditure which includes directors, staff and key service providers volunteering to accept significant reductions in fees and wages.
Given that the economic impacts of COVID-19 are likely to persist for a protracted period and access to capital markets is erratic and uncertain, the company is doing everything possible to preserve its cash and to reduce expenditure.
The REE business strategy, incorporating the RapidSX approach to REE separation remains Hexagon’s primary objective.
The company recently launched a new website with updated content to better portray its current activities, assets and strategy.
This is particularly relevant as the Hexagon engages with offshore investor groups, new to the story and keen to gain a broader understanding of the business.