Kimberley Rare Earths defines process to produce saleable rare earth products from Cummins Range – Proactiveinvestors (AU)

24-Apr-2012 Intellasia | Proactiveinvestors | 9:28 AM Print This Post

Kimberley Rare Earths (ASX: KRE) has defined a simple process flow sheet to produce saleable rare earth products, a milestone in the development of the Cummins Range project.

This is of particular importance given the geological and mineralogical diversity of rare earth deposits and the complexity of extracting and separating multiple metal-based products.

Metallurgical test work on rare earth samples from Cummins Range has defined a simple, viable customised process flow sheet to beneficiate the rare earth ore into a mineral concentrate using a froth flotation process.

This process uses a custom made collector and does not require fine grinding, steam conditioning or elevated operating temperatures, reducing the capital and operating cost base.

As a result, Kimberley has achieved an un-optimised concentrate grade of 17% total rare earth oxides and 50% recoveries. Kimberley will target recoveries of 60% to 70% with future optimisation work.

Kimberley managing director Tim Dobson said the results were better than expected.

“This represents a significant milestone in the development of the overall process flow sheet for Cummins Range and paves the way for us to confirm an appropriate downstream separation flow sheet using existing conventional technologies,” Dobson said.

Kimberley has been working closely with a research institute in China to develop the process flowsheet and assess the economics of the Cummins Range project.

The work with the institute, which has more than 40 years experience in specialty metals research and development, will also help with the company’s understanding of the mineralogical distribution, liberation and deportment of rare earths within the mineralisation.

Scoping Study

Results from the metallurgical test work will inform various components of the scoping study which is being prepared for Cummins Range.

Following the Scoping Study, stage two metallurgical testing will be carried out with the aim of improving metallurgical recoveries.

The company will also test the application of conventional downstream mineral-cracking and separation technologies on Cummins Range concentrate to confirm the separation of material into rare earth products.

Cummins Range

The Cummins Range project hosts a JORC Resource of 4.9 million tonnes at 1.74% total rare earth oxides.

This includes a number of high grade intercepts at or near surface in the core of the deposit, which offers the potential for a high grade starter pit.

Analysis

Kimberley’s Cummins project is in the same state as Lynas Corporation’s (ASX: LYS) Mount Weld, which is believed to be the richest known rare earths deposit in the world. This provides the company with a road map of sorts for approvals.

In addition, the majority of rare earths oriented stocks have been marked down by the market in the last few months.

Kimberley Rare Earths has been no exception, down from $0.17 in July 2011 to a current share price of $0.086 in April 2012.

On an EV/Resource Tonne valuation, Kimberley is currently one of few rated negatively. Clearly, with any market pick up, this situation will be unlikely to last, providing an opportunity for investors at current prices.

On an in-situ valuation, Cummins’ resource would be valued at around $4 billion, depending on recoveries in mining and processing.

While it might have only listed in May 2011, Kimberley is among the front line of rare earth producers, one of few advanced rare earth resource players outside China.

Managing director Tim Dobson is progressing Cummins through exploration and development into production.

The sell-off of rare earth stocks seems to have discounted and disregarded the potential of this world class project, having reduced the market capitalisation of Kimberley to near cash levels.

This provides investors with an opportunity to get onboard at the beginning of a well-funded multi-year exploration and development program.

Kimberley Rare Earths appears ready to follow in the footsteps of other notable Australian rare earth developers such as Lynas Corporation, Arafura Resources (ASX: ARU) and Alkane Resources (ASX: ALK).

http://www.proactiveinvestors.com.au/companies/news/27960/kimberley-rare-earths-defines-process-to-produce-saleable-rare-earth-products-from-cummins-range-27960.html

 

 


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