Locksley Resources aims to be California’s next big rare earth story

Locksley Resources (ASX: LKY) is continuing to unlock the potential of a large rare earth elements opportunity located in the USA’s most prospective home for the highly valuable critical metal.

Sited in the Mojave Desert of California, Locksley’s Mojave Project is in the same neighbourhood as the largest and only currently operating rare earth mine in the US, the MP Materials operated Mountain Pass project.

Recent stream sediment sampling results from a new campaign completed over the Mojave project have returned anomalous results ranging from 0.103% (1,030 parts per million) to 0.26% (2,600 parts per million) total rare earth oxide (TREO).

Elsewhere, the company also recently obtained 12 high-grade samples returning results ranging from 1.03% to 12.1% TREO along the interpreted mineralised horizon at its El Campo target.

Drilling will commence at the El Campo Prospect as soon as practicable following approval.

Growing strike length

The results from samples obtained from the North Block claim are separate to the already existing identified 860m striking interpreted mineralised horizon associated with high-grade outcropping samples at the company’s El Campo lease.

Notably, 4 stream sediments with TREO’s ranging from 0.13% to 0.21%, were obtained from an area just 1.5 km north east of the Mountain Pass mine.

Managing director, Steve Woodham, said this represents a new area of rare earth element potential amongst Mojave’s North Block which is a large block comprised of 164 claims totalling 14.9 sq km.

“The recent stream sediment sampling program has provided further encouraging grades, indicating six catchment areas with elevated TREO results up to 0.26%,” Mr Woodham said.

“These elevated results at the North Block prove the entire area is prospective for REE and provides the group with further potential drilling targets.”

“The company is well funded to commence further work and the Board look forward to informing the market closer to the commencement of drilling.”

El Campo success

In mid-September Locksley revealed significant exploration success with a rock chip sampling program at the North Block, South Block, and El Campo leases.

The surface sampling program returned very high-grade assays up to 12.1% TREO.

Locksley has now identified an 860m long interpreted prospective horizon associated with high-grade outcropping samples with the mapping and sampling program, with the company subsequently lodging applications to undertake 5-6 hole drilling program to further test the El Campo lode.

Early exploration tool

The recent first pass stream sediment sampling program was designed to collect samples from dry stream beds over a broadly spaced area within the North Block as an early exploration tool to cover large areas of the claims with the aim of identifying smaller areas of interest that require additional ground reconnaissance.

Six catchment areas have been identified as potential source areas for rare earth element mineralisation in the North Block of the Mojave Project.

Seven stream sediment samples have identified highly anomalous rare earth element potential, resulting in erosion from nearby surrounding outcrops.

Locksley successfully completed the acquisition of the Mojave project in late August by successfully locking up 100% of the issued capital of Enigma Strategic Minerals.

The Mojave Project consists of three areas: the North Block comprised of 164 claims totalling 14.9 sq km, South Block comprising of 32 claims totalling 3.5 sq km, and the El Campo Prospect comprising of 5 claims totalling 0.34 sq km.

US government demands more rare earths

The company made the strategic acquisition on the back of significant new demand for rare earths, particularly in the US.

The current US administration has made the securing of rare earths a major policy since taking office, concerned that it has very little local production and that China dominates the market.

Just how much the government wants to support local miners such as Locksley was highlighted in May when a new bill was enacted to help accelerate the development of a rare earth industry.

Rare earth developers receive tax benefits

A bipartisan bill introduced in April offered tax incentives to companies that help secure the domestic supply chain and stimulate the production of rare earth magnets as part of a national initiative to strengthen the economy and combat climate change.

The Rare Earth Magnet Manufacturing Production Tax Credit Act would create a production tax credit for rare earth magnets that are manufactured in the United States with no domestic manufacturing of them currently existing.

These magnets are used in a wide variety of applications necessary for our modern economy, such as computer hard disks, cell phones, and MRIs.

They are also critical for certain clean energy uses. For example, 93% of all-electric vehicles contain a powertrain driven by one of these magnets.

The new bipartisan bill creates an approximately $31 per kilogram production tax credit for magnets that are manufactured in the United States, or approximately $47 per kilogram for magnets that are both manufactured in the United States and for which all component rare earth material is produced and recycled or reclaimed wholly within the United States.

To be eligible, the rare earth magnets may not include any component rare earth magnet material produced in non-allied foreign nations such as China, Iran, North Korea and Russia.

The bill has been endorsed by MP Materials, USA Rare Earths, National Mining Association, and Zero Emission Transportation Association.

For Locksley Resources, its hunt for rare earth elements seemingly couldn’t be better located or timed.