Desoto Resources expands NT acreage with Spectrum rare earths property acquisition

Desoto Resources (ASX: DES) has signed an agreement with private company Copperoz to acquire the Spectrum rare earth elements (REE) property in the Northern Territory.

The Spectrum acreage is located within Desoto’s existing Fenton gold project and comes with a historic dataset targeting REEs.

Past explorers who focused on uranium exploration at the property also reported the presence of high-grade REEs over 350 metres of a potential 4.5-kilometre strike along the Fenton Shear Zone corridor (FSZ), with mineralisation open to the north and south.

The drilling was completed before REEs were recognised worldwide as valuable critical minerals opportunities.

Exclusive rights

Under the terms of the deal, Desoto will have the exclusive right to earn an undivided 70% interest in the Spectrum project by spending a minimum of $5 million on exploration over two stages.

Stage 1 will be carried out within the first 15 months and will comprise a minimum spend of $2m and a minimum of 3,500m of reverse circulation or diamond drilling across the project area.

Stage 2 will span the next 24-month period and see Desoto spend the remaining $3m on exploration activities.

On earning its 70% equity, Desoto will then be required to solely fund all activities towards a positive feasibility study for Spectrum.

Upon completion of the study, the company will have the option to acquire the remaining 30% through an agreed buy-out process.

Consideration for the Spectrum project will comprise an $80,000 cash payment due within the next six months plus the issue of 3.63m Desoto shares at $0.066 each and 1.6m unlisted options exercisable at $0.23 each with an expiry date of 2029.

Diversification benefits

Desoto managing director Chris Swallow said the strategic acquisition would help create a diversified exploration company.

“Spectrum gives us a critical minerals position in the Northern Territory which complements confirmed mineralisation and geophysical anomalies at Fenton,” he said.

“We are now positioned for an accelerated phase of exploration and drilling… the Northern Territory government’s recent decision to expedite rare earths mining will enhance our capacity to capitalise on the region’s REE potential.”

High-grade REEs

The Quantum REE-gold-silver target was discovered in 2010 by previous owner Territory Uranium during drill testing of a coincident radiometric and magnetic anomaly offset to the north of known uranium mineralisation.

The interpretation was that this anomaly could possibly be a blind uranium deposit.

Exploration at Quantum intercepted wide zones of REEs including neodymium-praseodymium with the best results of 50m grading 1.55% total rare earth oxides (TREO) from 245m including 6m at 6.55% from 248m, 21.9m at 2.55% TREO from 276m including 9.2m at 3.78% TREO from 288m and 17m at 1.0% TREO from 254m including 1m at 6.42% TREO from 254m.

First-pass limited metallurgy on one bulk composite was also completed on the TREO mineralisation and identified the key REE minerals allanite and bastnasite.

Vesper target

The Spectrum project area also contains a strong electromagnetic anomaly known as Vesper, located to the southwest of Quantum and within the same structure.

The undercover target was identified with an associated historical soil geochemical anomalism which included peak values of 8,060 parts per billion copper, 3,140ppb zinc and 980ppb lead.

Vesper is interpreted as a localised anticlinal dome on the eastern limb of a regional antiform adjacent to the FSZ.

It represents a potential Proterozoic copper-gold-uranium-REE skarn-style target related to the intrusion and doming of the Cullen Batholith into calc-silicate rocks of the Koolpin Formation.