Special Report: RareX’s belief that its Cummins Range rare earths project hosts high-value neodymium and praseodymium (NdPr) has been validated by a review of historical drilling.

NdPr is the key value driver of rare earth deposits globally and is essential for the manufacture of electric vehicles and wind turbines as well as military applications.

The review of historical drill holes by RareX (ASX:REE) has determined that NdPr makes up an average of 22.1 per cent of the Cummins Range rare earths content, in line with other carbonatite rare earth deposits including Mt Weld (24.7 per cent NdPr), Nguall (21.3 per cent NdPr) and Mountain Pass (16.3 per cent).

Cummins Range currently has Australia’s fourth largest rare earth resource of 13 million tonnes grading 1.13 per cent total rare earths oxide.

The project also has the distinct advantage of having an ultralow thorium content of just 50 parts per million, compared to the usual range of between 1 to 10 per cent thorium in monazite derived from mineral sands, minimising the amount of radioactive waste that the company has to deal with.

 

Rare earth market and strategy

Rare earth prices tend to track geopolitical evens and associated perceived supply shocks with NdPr prices reaching over $US280 per kg in 2011 following a dispute between China and Japan.

NdPr prices have increased for five straight days as of 14 May 2020 due to increased downstream stockpiling as demand resumes with the fading impact of the COVD-19 pandemic.

Prices have climbed by about 4.2 per cent to the current $US38 per kg from a month ago.

RareX says the expectation is that demand will continue to pick up alongside the post-pandemic recovery.

It added that China’s crackdown on the mining of ionic clay deposits in the country’s south for environmental reasons and increasing demand for EVs has seen China importing additional rare earth concentrates from offshore sources to satisfy domestic demand.

China’s transition to become a net importer of rare earths underpins the company’s proposed strategy to export rare earth concentrate directly to existing offshore rare earth refiners.

This strategy is expected to reduce the high capital costs and technical risks that are usually associated with other rare earth projects while ensuring that Cummins Range could enter production in time to benefit from expected increases in the NdPr price.

RareX is working with strategic partner Talaxis, a specialist rare earths project developer and wholly owned subsidiary of Noble Group, to engage with downstream processors and refiners.

It is currently planning to carry out an infill drilling program that will allow it to update its Cummins Range model with all the rare earth oxide grades estimated individually.

This drilling will be combined with more detailed grade estimation and block modelling to upgrade the resource from the current inferred classification.

>> Now watch: RockTalk: Does uncertain supply make rare earths a BUY?

This story was developed in collaboration with RareX, a Stockhead advertiser at the time of publishing. This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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