ARI shines a light on three ASX-listed rare earths explorers and highlights the emergence of the ionic clay-hosted rare earths deposit.
While China has long dominated the world’s rare earths production, processing and manufacturing of rare earths magnets, the market is changing and other countries are putting themselves in focus.
The hallmark of a successful mining company is the strength of its relationships, and emerging rare earths jurisdictions are looking beyond China when commercialising their product.
Lynas Rare Earths – Australia’s only rare earths producer – has shared a longstanding partnership with Japan, with the latter a trusted buyer and financier of the Perth-based miner.
What started in 2011 with $US250 million of debt and equity financing from Japan Australia Rare Earths B.V. (JARE), was reinforced in March when JARE made a $200 million investment in Lynas and forewent $US11.5 million of debt owed by Lynas.
As part of the agreement, Lynas will update its existing supply rights to reflect continued growth in the Japanese rare earths market, prioritising Japan in its rare earth shipments.
Two other near-term Australian rare earths producers, Hastings Technology Metals and Arafura Rare Earths, have established ties with European, US, Canadian and Korean partners.
This includes partnerships with automakers such as Hyundai and Kia, renewable energy players Siemens Gamesa and General Electric (GE), chemical companies, trading houses and downstream processors, carving out new commercial pathways for the companies and its peers to follow.
Three emerging ASX-listed companies aspiring to be rare earths producers include Meteoric Resources, Larvotto Resources and Eastern Metals, each of which have made significant progress in the last 12 months.
We take a closer look at their attributes and potential.
Meteoric’s stock soared from $0.020 per share in December 2022 to as high as $0.18 per share in late-April following its acquisition, expansion and delineation of the Caldeira ionic clay rare earths project in the Minas Gerais state of Brazil.
The company announced its maiden mineral resource for Caldeira in early May, demonstrating what it believes is the world’s highest-grade ionic clay rare earths deposit.
“Until today, the highest known ionic clay deposit in the world was a deposit called Penco in Chile,” Meteoric executive chair Andrew Tunks told Australian Resources & Investment.
“Penco has a resource of about 20 million tonnes (measured and indicated) and a grade of about 2200ppm (parts per million). Our announcement was significant because one, Caldeira is 400ppm higher – about 20 per cent more than their grade – and its 400 million tonnes, it’s nearly half a billion tonnes.
“Typically, you get small high grade, or large low grade, so it’s a really rare combination for Caldeira to be both large and the highest grade.”
Caldeira’s maiden mineral resource was derived from 1379 drill holes. The average drill depth in the resource is 6.9m and 85 per cent of all holes generated total rare earth oxide (TREO) grades above 1000ppm.
With Caldeira’s maiden mineral resource in the inferred category, Meteoric will now focus on upgrading the project.
“Before you can do any studies, for example a feasibility study, you need to upgrade the understanding of your resource, and that typically means closing up the drill spacing,” Tunks said.
“To get from inferred to indicated, and then from indicated to measured resource categories, we need to complete approximately 100,000 metres of drilling, so there’s a lot of drilling and we’ll be commencing that program as soon as we can.
“In the interim, we will continue and expand the current diamond drilling to collect additional samples for metallurgical testwork. There has been preliminary metallurgical testwork done, it’s quite positive, but we need a significantly larger metallurgical program testing for variation across the project and with depth.
“So really the first year is going to be about drilling, drilling, drilling, and improving our resource categories and at the same time, growing our team. We’ve just appointed a new CEO, Nick Holthouse, who has rare earths experience as COO of Hastings Technology Metals.”
Outside of China and Myanmar, rare earths mining has typically taken place in hard-rock environments. This is how Lynas has mined its rare earths since entering production in 2011.
Meteoric has a unique opportunity in that its rare earths are hosted in ionic clays, with Tunks suggesting that “nature has already done the work for us”.
“Like Lynas, clay-hosted rare earths were originally hosted in hard rock, but through the action of time and oxygen they have weathered at the surface and all the granite has now turned into clay,” he said.
“During that weathering process, the minerals that hold the rare earths have been broken down, and the rare earths have been released into the clay.”
Hard-rock rare earths deposits are typically much higher grade than their clay-hosted peers, but processing this ore is typically more onerous. While clay-hosted processing practices are still early stage, with further research required to understand the metallurgy, there is evidence to suggest this method is less cost- and carbon-intensive.
Another ASX-listed company with a potential clay-hosted rare earths project at its disposal is Larvotto Resources.
In April, the company announced it had intersected bonanza-grade rare earths at the Merivale South prospect within its Eyre project in WA.
The company’s share price surged from $0.135 per share to as high as $0.33 per share after aircore (AC) drilling at Merivale South intersected up to 1.26 per cent TREO. This highlighted the potential of a 3km-long TREO anomaly that sits within a broader 8km-long anomaly.
Larvotto completed two drill lines 500m apart along the 3km-long anomaly, with the zone remaining open in all directions, particularly to the west.
Maiden composites led to the discovery of 3466ppm TREO over 6m, before Larvotto undertook 1m resamples and discovered results as high as 1.26 per cent TREO (12,611ppm).
When asked if the assay results surprised him, Larvotto managing director Ron Heeks said he was always optimistic about the geochemical indications.
“We had a very good geochem anomaly and we had a coincident thorium radiometric anomaly at Merivale South, which meant given the area hadn’t had a single drill hole in it, we needed to test it and see what the anomaly meant,” Heeks told Australian Resources & Investment.
“It came back very strong, and I’d like to be able to talk more about the skill that went into it, but it’s fair to say we didn’t overthink it.
“I was always positive on the prospect because of the level of the anomaly, and I was looking at a lot of companies around us who were following up anomalies at 100–200ppm, and we were up around 700–800ppm. So that was pretty interesting.”
Heeks said while early exploration indicated the rare earths at Merivale South are hosted in ionic clays, Larvotto will need to conduct metallurgical testing to determine the optimal process route.
Once Larvotto has an understanding of the processing options, the company will aggressively drill and explore the tenement to further understand the scale and nature of the rare earths. And with more than 35 years’ experience in building mines, the project is then rapidly falling into Heeks’ sweet spot.
“If they are clay-hosted rare earths, which I’d like to think they are, then we’ll immediately get into a pretty serious drill program to determine what we’ve got, and at the same time, commence very active metallurgy to determine what we have to do to extract the rare earths.
“I think these deposits can be drilled out very quickly, and then it’s about what you have to do with the metallurgy. Is it going to be simple or not?
“You also need to think about how many consumables you are going to use. Water won’t be a problem for us, there should be no significant issues environmentally and with native title.
“But above all, it gets down to what the metallurgy is going to tell you. That’s the beginning and end of the problem.”
Rare earths are just one set of minerals Larvotto is exploring at its Eyre project, with a multi-commodity focus also showing potential for lithium, nickel, gold and platinum group elements (PGEs).
Lithium, in particular, has attracted lender attention with Larvotto receiving a $3.4 million cornerstone investment from Canadian institutional fund Lithium Royalty Corp. and Waratah Capital in October last year.
This came following a successful lithium geochemistry campaign at Eyre’s Merivale prospect that defined a lithium anomaly across 4km with a high-grade centre over 1km. The maximum grade identified was 126ppm lithium.
In April this year, Larvotto announced an AC drill program had identified at least nine pegmatites associated with the lithium anomaly. A broad anomaly containing more than 1000ppm nickel was also identified. This could span more than 1km in length.
Eastern Metals is exploring a suite of NSW and NT base and precious metals projects, and as the Browns Reef and Home of Bullion deposits have shown promise, a new rare earths prospect has also emerged.
The Tara project consists of the Currawalla mine which had been historically explored for base and precious metals. When Eastern Metals carried out portable XRF (pXRF) testing at Tara it didn’t identify base or precious metals but instead discovered high-grade rare earths.
Samples from high pXRF readings were submitted for laboratory analysis and returned assays up to 3.38 per cent TREO.
Eastern Metals executive chair Bob Duffin said these readings were strong enough to indicate the company could be onto a significant rare earths discovery.
“The Tara project is in an environment where there are no rare earth deposits,” Duffin told Australian Resources & Investment. “The trend from Currawalla goes off our tenement onto vacant ground both to the south and the east.
“We lodged an exploration licence application to cover the extensions of that structure and that application has been recommended for grant, so we’ve now got quite a significant tenement position south of Cobar in an area where we’ve got rare earths readings that have been checked and reproduced by conventional assays.
“We’re not simply relying on the portable XRF results, so that’s looking pretty positive.”
To follow up its rare earths findings, Eastern Metals will return to Tara and extend its mapping of the prospect.
“There is a coincident aeromagnetic anomaly associated with the project’s old workings, which gives us comfort that there will be good tonnage potential to whatever it is that’s causing this anomaly and the body of rare earth mineralisation,” Duffin said.
“So, we’re pretty excited about this. What I’ve learnt in my career is nothing beats high grade, no matter what the commodity, and these grades are very high.”
Duffin said that when Eastern Metals listed on the ASX and launched its IPO (initial public offering) in October 2021, it was very much focused on delineating its Browns Reef and Home of Bullion deposits.
But these rare earths findings have changed the company priorities, with Eastern Metals to focus on Tara for at least the next few months.
Duffin said the company would carry out a three-phase exploration program at Tara, which starts at Currawalla.
“Firstly, we will concentrate on Currawalla and its immediate environment because that’s where we got the high-grade rare earths mineralisation,” he said.
“The second phase of our work program is to follow up some high-quality aeromagnetic data available for much of the new ground that we’ve applied and will be granted – we’ve been advised of that by the regulator.
“The Currawalla mine is associated with an aeromagnetic anomaly, and there are a number of other similar aeromagnetic anomalies within the granite terrain in our Tara licence, and our new license which we’re going to call Black Range. So, we will follow up these and do that in parallel with our work at Currawalla.
“The third leg of our program will see us extend that exploration coverage elsewhere into the new Black Range license area.”
Duffin said Eastern Metals would be drilling at Currawalla in the near future.
The ASX might have a few notable rare earths stayers, but there’s also a host of new rare earths players worth monitoring. This includes Meteoric, Larvotto and Eastern Metals, three companies that have made significant ground over the last 12 months.
This feature appeared in the June–July edition of Australian Resources & Investment.