Australian Rare Earths set for resource upgrade following strong drilling results
Australian Rare Earths’ Koppamurra resource is due to be updated this quarter.
A host of strong drilling results has set the scene for an imminent resource upgrade at Australian Rare Earths’ (ASX: AR3) Koppamurra project in South Australia.
In its latest quarterly report, Australian Rare Earths says the results will form part of the resource update set for release later this quarter.
The Koppamurra resource stands at 81.4 million tonnes at 785 parts per million total rare earth oxides (TREO). This includes an indicated resource of 45Mt at 835ppm TREO.
The impending resource update is progressing in parallel with Australian Rare Earths’ processing and economic studies, which include the recently-signed memorandum of understanding (MOU) for offtake and technical collaboration with North American-based global rare earths processor Neo Performance Materials.
The MOU provides for negotiation of a joint development agreement between Australian Rare Earths and Neo aimed at accelerating the development of Koppamurra through to production of a mixed rare earth carbonate product (MREC).
It also allows for negotiation of an offtake agreement under which Neo may purchase 50% of Koppamurra’s MREC capacity from the initial module, with a right of first refusal to secure up to 50% of production from a subsequent module.
The companies can also collaborate to identify and develop future clay-hosted rare earth projects in Australia and New Zealand, with Australian Rare Earths to receive a first right of refusal to participate in such projects and Neo to receive a first right of refusal on any offtake from developed projects.
Key rare earth elements for magnets
Australian Rare Earths acting managing director Rick Pobjoy said in addition to the company’s highly favourable location, a key competitive advantage is that Koppamurra has all four of the rare earth elements required to make high-strength permanent magnets needed to meet the growing demand for electric vehicle motors, wind turbines and domestic appliances.
“It was a highly successful quarter, culminating in a host of strong assay results which have paved the way for our imminent resource update,” Mr Pobjoy said.
“The results are consistent with our strategy of growing the Koppamurra inventory to enable the company to participate in future independent rare earth permanent magnet supply chains.
“As part of this strategy we have secured a pivotal joint development agreement with leading rare earths processor Neo Performance Materials and continued to progress critical metallurgical testwork.
“These are all key pillars of our strategy to capitalise on the strong outlook for rare earths, particularly those sources from tier-one locations,” Mr Pobjoy added.
He said the company looks forward to completing the resource update and advancing its testwork and economic studies in the March 2023 quarter.