Ionic signs key deal with world leading rare earth miner Chinalco
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Ionic has reached a milestone agreement with Chinalco, the world’s largest market capitalised rare earth miner and separator, for development of its Makuutu project.
While the memorandum of understanding may be non-binding at this stage, it is still a clear endorsement of the prospectivity of the unique ionic adsorption clay project as a globally strategic supplier of critical and heavy rare earths.
Chinalco is no stranger to ionic clay rare earth projects given that its subsidiary China Rare Earths Jiangsu owns a number of mines in Guangdong and Guangxi provinces, along with four rare earth separation plants in Jiangsu Province.
Ionic Rare Earths (ASX:IXR) has granted Chinalco a 12-month exclusivity period to progress discussions on strategic cooperation to accelerate the Makuutu mine development and production. This includes discussions on investment in the company and potential offtake of rare earths from the project.
Notwithstanding the exclusivity arrangements with CHINALCO, IonicRE has maintained the right to continue discussions with other potential counterparties that had already commenced.
“We are very pleased to have signed this MOU which further endorses the quality of the project and its strategic importance, and will now enable the Makuutu rare earths project to rapidly advance activities in the near term,” managing director Tim Harrison said.
He noted that Chinalco’s knowledge on ionic adsorption clays is second to none and that its involvement will greatly enhance and accelerate the planned development of Makuutu.
“We greatly welcome their expertise in de-risking the technical development and engineering, maximising the strategic value of Makuutu and its importance in the longer-term global rare earths supply chain,” Harrison added.
“We see Makuutu rapidly growing into a very large, long life producer of critical and heavy rare earths.
“Partnering with Chinalco potentially fast tracks the development process for Makuutu and will greatly assist in value creation for IonicRE.”
The scoping study outlining preliminary economics for the project is expected to be released in mid-April.
Makuutu is one of the world’s largest ionic adsorption clay deposits with a 315Mt resource grading 650 parts per million total rare earth oxides.
This is significant given that deposits of this type are commonly considered to be some of the cheapest and most readily accessible sources of heavy rare earths, as they can be desorbed from the clay using a simple salt desorption process.
Ionic’s current Phase 3 drilling has already returned positive indications that the resource could be increased further with initial holes in the reconnaissance program intersecting clay intervals with sediments which confirm the presence of the sedimentary basin that hosts the Makuutu rare earths mineralisation in this area.
This article was developed in collaboration with Ionic Rare Earths, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.