Astron Corp ready to exploit world-class rare earths and zircon project
Astron’s Donald project is on the path to becoming a globally significant producer of rare earths and mineral sands.
With a modest market capitalisation of $87 million, Astron Corporation (ASX: ATR) is progressing the world’s largest undeveloped zircon deposit within its Donald project, which also hosts the fifth largest rare earth resource outside China.
Moreover, Astron’s Donald project, 15km east of Minyip in Victoria’s Wimmera region, is at an advanced stage with construction scheduled to begin next year and first production in the second half of 2025.
Last month, Astron revealed an update mineral resource for mining licence MIN5532 which is the site of phase one of the Donald project.
This updated estimate totals 525 million tonnes at 4% heavy minerals, 16% zircon, 7.1% rutile, 23% leucoxene, 21% ilmenite, 1.8% monazite and 0.65% xenotime.
Contained heavy minerals stand at 21Mt, with zircon at 3.4Mt. On the rare earths side, contained minerals are 511,400t – reflecting an 18% increase in the monazite resource and the addition of a 135,500t xenotime resource.
Between them, monazite (neodymium and praseodymium) and xenotime (dysprosium and terbium) contain the valuable key battery REE minerals.
All-up, Donald has 2.6 billion tonnes at 4.6% heavy minerals, with the initial phase one development on MIN5532 only accounting for about 17% of the entire resource.
‘Advanced, globally significant’ project
Donald was discovered by CRA Exploration, a forerunner of Rio Tinto (ASX: RIO), in the 1980s.
Astron acquired the project in 2004 and describes it as “an advanced, globally significant critical minerals project” located 300km north-west of Melbourne.
The project area covers 506sq km and has access to infrastructure, including power and water. The company has already purchased sufficient water usage rights for both phase one and phase two operations.
A standard gauge rail line runs through Minyip.
Zircon was once the dominant resource in the Donald project, but rare earths is now expected to contribute to over 50% of project revenue and, given their critical roles in electrification technologies, including electric vehicles and wind turbines, are an integral part of the development plan.
First output in 2025
The company’s plan is to develop Donald in three stages, with phase one centred on mining lease MIN5532.
Beginning in 2025, Astron plans to mine 7.5Mt per annum of ore to produce a heavy mineral concentrate and a rare earths concentrate.
Onshore rare earths processing in the future
Phase two, which is planned to begin in 2027, will see throughput at the plant double to 15Mtpa, and the company moving into downstream processing.
After 2030, when phase three is due to kick in, mine output will be further increased and Astron will have the potential to introduce additional process stages such as rare earths cracking and/or synthetic rutile production.
This operation will fit with the Federal Government’s Australian Critical Minerals Strategy to be supplying global buyers with critical minerals by 2030.
Donald phase one is expected to provide a significant economic boost to the local region, creating an estimated $2.2 billion of regional economic activity and 536 full-time equivalent employment opportunities over an initial 30-year mine life
In reality, the economic and employment will be significantly higher given the company expects mining to continue for 40-plus years.
Premium prices
Development of the Donald project will be moving into high gear at a time when zircon and rare earths prices have the wind at their back.
Supply constraints apply to both groups of minerals.
In 2021, the price of zircon rose by 23% to US$1,590/t and, by April 2022, had increased to US$2,120/t.
Australia’s largest mineral sands miner Iluka Resources (ASX: ILU) said demand remains strong and expects the zircon price to remain steady around US$2,038/t through to the end of the March quarter.
At MIN5532, in terms of rare earths, 23.1% of the basket comprises neodymium, praseodymium, dysprosium and terbium.
In October, neodymium was fetching US$98.90 per kilogram, praseodymium US$97.5/kg, dysprosium US$318.40/kg and terbium US$1,802/kg.
This contrasts with the lighter (and most prolific) rare earths, lanthanum and cerium, which were priced at US$1/kg.
Key approvals in place
Donald is the only Victorian rare earths or mineral sands deposit that has cleared key environmental hurdles.
It has concluded its Environmental Effects Statement to meet Victorian Government requirements and has also satisfied the federal Environmental Protection and Biodiversity Conservation requirements.
The mining licence has been obtained, with key works including metallurgical test work, at both lab scale and pilot scale, concluded.
The main regulatory approval outstanding is the Victorian Mining Work Plan and Astron is targeting the completion of all regulatory requirements by Q4 2023.
Astron expects to release its feasibility study during the March quarter, which will include key construction, operating and financial metrics.