RareX secures acquisition of historic district-scale Khaleesi niobium project

Junior explorer RareX (ASX: REE) has secured an agreement with two private vendors to acquire the district-scale Khaleesi niobium project in the East Yilgarn region of Western Australia.

The project is comprised of one granted tenement and five pending tenement applications across 966 square kilometres of the Albany-Fraser Orogen.

Consideration for the acquisition was in the form of a $100,000 cash payment plus 9.8 million ordinary shares priced at $0.016 each and equating to approximately $157,000.

The shares are escrowed for a period of six months and a 2% royalty and buy-back options exist over three of the tenements.

RareX plans to fund the Khaleesi acquisition from its existing working capital.

Project location

Khaleesi is located adjacent to the Mulga Rocks deposit owned by Deep Yellow (ASX: DYL) subsidiary Narnoo Mining, along the transition of the Yilgarn Craton to the Albany-Fraser Belt and specifically in the Northern Foreland formation.

It is along strike from the highly-endowed Ponton Dyke, which is reported to have returned some of Australia’s best rare earth intersections up to 28 metres at 10% total rare earth oxides (TREO) including 6m at 20.57% TREO.

It also sits near to the Cundeelee carbonatite which measures 10km in diameter and was described by BHP in 1998 as the “largest effectively untested carbonatite in the world”.

The Tropicana gold mine (owned by AngloGold Ashanti (70%) and Regis Resources (ASX: RRL, 30%) is located 110km to the north-east and sits along the same structural trend.

RareX’s Red Dragon project sits 50km to the north of Khaleesi.

Historic exploration

Historic exploration at Khaleesi was focused mainly on gold and the majority of holes completed were not assayed for niobium or rare earths.

Data from more than 10,000m of shallow drilling is believed to indicate the potential for niobium-enriched carbonatites on the landholding, as part of a wider niobium system.

Evidence from 20% of the holes which have been re-assayed shows broad anomalous niobium.

Individual values are reported to have exceeded 1000 parts per million niobium.

Gold-nickel-copper focus

Companies including Anglo Gold Ashanti, Fortescue (ASX: FMG) and IGO (ASX: IGO) have previously explored Khaleesi with a narrow focus on gold-nickel and to a lesser degree, copper and the completion of multi-element four-acid digest assays for elements including niobium, yttrium and europium.

These assays have confirmed large areas of elevated niobium in saprock and fresh rock up to 30 times the background values of 20ppm and over multiple locations.

This suggests there are opportunities to discover significant niobium and rare earths mineralisation across RareX’s acreage.

Due diligence

RareX has conducted due diligence on Khaleesi’s existing data sets which include geophysical assessments by Perth-based consultant Resource Potentials – who are credited with locating the Luni geophysics anomaly owned by WA1, which has become a significant Niobium discovery in the West Arunta region of central Australia.

Detailed gravity and electromagnetic surveys revealed the presence of an alkaline intrusive complex within Khaleesi, measuring 20km in diameter and with the same age profile as the nearby Mt Weld (owned by Lynas Rare Earths, ASX: LYC) and Ponton Dyke discoveries.

The project area is believed to be favourable for niobium-carbonatite intrusions under little to no cover.

Exciting acquisition

RareX chief executive officer James Durrant said the Khaleesi acquisition was “tremendously exciting” for the company.

“This new project is well-endowed with geological data from large [exploration] programs that were mainly gold-focused and never properly tested or evaluated the extensive niobium anomalies,” he said.

“Our due diligence has identified the opportunity for a potential district-scale niobium project and we plan to immediately commence a rapid and highly-targeted exploration program.”

He said the acquisition supports RareX’s goal of becoming a leading rare earths company.

It will be explored alongside the development of the flagship Cummins Range project.

Initial targets

Mr Durrant said the company’s initial exploration at Khaleesi would focus on the historic Luchini and Niobe targets.

Luchini occurs in an area which was subject to detailed gold exploration including 10,000m of drilling by AngloGold Ashanti from 2006 to 2014.

Many of the holes completed in the southern part of the prospect showed highly-elevated niobium through the regolith and into the fresh rock.

The niobium is reported to be coincident with a uranium anomaly identified by radiometric survey data.

The Niobe target comprises two drill lines, approximately 2km apart on either side of a magnetic low and is coincident with a 4km by 0.5km vegetation and thorium radiometric anomaly.

Drilling also showed elevated niobium-rare earth results in the regolith within the fresh rock.

Share placement

RareX has successfully raised $1.5 million under a two-tranche placement which will see the company issue of 107,142,857 shares at $0.014 each.

Funds raised will be used for exploration and development activities across all of RareX’s projects and for general working capital purposes.

The company’s directors intend to subscribe for $150,000 of shares which will subject to shareholder approval at a general meeting.