Red Metal (ASX: RDM) has produced what it says could be a premium saleable rare earths product after its first impurity removal trial using ore from its globally-unique Sybella rare earths project near Mount Isa in Queensland.
The company says its low-impurity, magnet rare earth oxides (MREO)-dominant product – seen as crucial in the lucrative electric vehicle (EV) market – is another proof-of-concept step towards Sybella becoming a significant, low-cost rare earths mining operation.
The Sybella deposit features a 12km-long by 3km-wide new granite-hosted deposit type sitting just 20km south-west of Mount Isa. The company believes it is potentially the first of its type in the world and it has many advantageous features including soft free-digging ore that is susceptible to simple, low-temperature processing, resulting in a likely low-capex operation.
As part of its distinctive “metallurgy-first” strategy, Red Metal described the impurity removal success at its maiden attempt to produce a saleable mixed rare earths carbonate (MREC) as a “major step forward” at Sybella.
The MREC features 48.7 per cent total rare earth oxides (TREO), with MREO making up 39.5 per cent of the TREO. The company believes heavy rare earth oxides (HREO) making up 26.6 per cent of the TREO will help garner a premium pricing for its products.
The MREC product was achieved using low-cost and readily-available akali reagents and management says it shows all the essential indicators for a cost-effective premium product that could even outclass those sourced from profitable ionic clay-hosted deposits.
From ore to final product, Red Metal reported high recoveries of 75 per cent neodymium and 76 per cent praseodymium – important elements in permanent magnets for wind turbines and EVs. It also confirmed respective 52 per cent and 45 per cent recoveries for the terbium and dysprosium considered to be crucial for EV manufacturing.
It found only low levels of uranium, thorium and iron in the MREC product.
Impurity removal and precipitation of a saleable product with minimal REO loss is an important hurdle to clear for both the Granite-Hosted Sybella and Ionic Clay-Hosted deposit types. As such, success with our first impurity removal attempt is a major step forward for the Sybella REO discovery as it shows the essential indicators are in place to cost effectively produce a quality MREC product.
Red Metal Managing Director Rob Rutherford
The company says it is now confident that ongoing optimisation studies will lead to increased revenues by specifically reducing expensive acid consumption and ensuring that impurities in its final product remain low.
By reducing the acid strength to a lower-cost pH 3-3.5 acid, it is also expected to improve the downstream impurity removal, as aluminium and iron typically fall out at those lower strengths without diminishing the all-important rare earth oxides.
Red Metal launched resource drilling after metallurgical testwork had confirmed high rare earths recoveries using low-cost economic methods. It is a bold, but informed strategy, as a commonly-practiced method has been to spend millions of dollars on resource drilling before finding later on that the rare earths cannot be made economic.
The company recently completed more than 8000m of step-out drilling across a 24-square-kilometre area of the interpreted mineralised granite. It is now awaiting assay results from the lab.
Red Metal also has a 44 per cent stake in its “spun-out” former lead-silver project that is now operated by Maronan Metals. Maronan has a pair of 30 million-tonne ore bodies that make up one of Australia’s biggest and highest-grade undeveloped silver resources, with the silver price having surged up nearly 50 per cent in the past six months.
A premium MREC product highlights an important next step in the company’s proof-of-concept at Sybella. It continues to frank management’s metallurgy-first strategy as the project moves from being just an idea to a potential game-changer in the rare earths mining space.
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