Perth-based Ionic Rare Earths (ASX: IXR) has increased the mineral resource estimate at its 51%-owned Makuutu project in the Republic of Uganda by a generous 210%, taking the new total to 315 million tonnes at 650 parts per million total rare earth oxides (TREO) with a cut-off grade of 200ppm TREO (minus cerium oxide).
The update places Makuutu among the world’s largest ionic adsorption clay deposits, and makes it a globally-strategic resource for low-cost, high-margin and long-term security of critical and heavy rare earth supply.
Ionic said the new resource was based on a 12-month drilling campaign which started in October 2019, taking in 279 holes for a total 4,754m.
The campaign included 54 infill drill holes completed on a 200m grid at Makuutu Central, increasing the resource confidence to indicated status in that area.
Another eight infill holes on a 100m grid in the same area evaluated short-range variability in head grade and extraction.
Ionic managing director Tim Harrison said the resource update “materially exceeds” the long-term expectation held by the company since acquiring its equity in Makuutu in 2019.
“In just over 18 months, we have been able to advance the highly-encouraging exploration target to confirm Makuutu as one of the largest ionic adsorption clay deposits outside of China, with one of the largest, publicly-reported TREO mineral resource estimates globally,” he said.
“The magnitude of this [update] will provide a platform for us to look at finalising the project’s scoping study, which we believe will reflect the significant nature of the resource, underpinning what we anticipate will be a long-term, low-capital and high-margin critical and heavy rare earth asset.”
Mr Harrison said the project has additional unclassified areas of mineralisation which could further boost the resource.
“We will be commencing new targeted drilling this month and additional material resource increases remain highly probable,” he said.
“Combined with the highly-prospective EL00147 licence [at the eastern extension of the mineralised trend], the overall potential for a heavy rare earth opportunity at Makuutu is high.”
The Makuutu project is 100% owned by Ugandan private company Rwenzori Rare Metals Ltd and comprises five licences over approximately 242sq km of easily-accessible land in eastern Uganda, surrounded by tier-one infrastructure including tarred roads, rail, power and water, and cell phone coverage.
Ionic has entered into an agreement to earn a 51% shareholding in Rwenzori and may increase its shareholding to 60% by funding the Makuutu work program through to completion of a bankable feasibility study scheduled for October 2022.
Milestone payments in cash or Ionic shares will also be required, specifically $479,000 on production of 10kg of mixed rare earth product from pilot or demonstration plant activities; and another $479,000 on conversion of the existing project licences to mining licences.