Red Mountain expands into rare earths sector with acquisition
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Special Report: Exploration company Red Mountain Mining has added a heavy rare earths project to its portfolio of gold projects in Australia and a copper-cobalt project in Africa.
The Mt Mansbridge project comprising three tenements in WA for heavy rare earths and nickel-cobalt has been acquired by Red Mountain Mining (ASX:RMX) for 50 million shares and $100,000 cash.
The sale agreement for Mt Mansbridge with ARD Group has been restructured on improved terms for Red Mountain after its shareholders queried the original terms in a March vote.
Heavy rare earths are a critical element in innovative technology for EVs and electronics.
The Mt Mansbridge project covers 280sqkm of the Kimberly region of WA southeast of Halls Creek, and is 40 km from Northern Minerals’ (ASX:NTU) flagship Browns Range project.
The company intends to fast track exploration and development of the Mt Mansbridge project which is prospective for heavy rare earth elements and cobalt and nickel.
This is in response to recent government concerns around security of supply for rare earth elements and rising global demand for battery minerals for EVs.
Exploration has been undertaken at Mt Mansbridge since the 1970s, mostly for uranium and gold, but the presence of the rare earth mineral xenotime in the project’s Killi Killi prospect has been overlooked until recently.
The Mt Mansbridge project’s Déjà vu prospect contains an ultramafic intrusion that may be have nickel and cobalt prospectivity.
In March, Red Mountain Mining completed a database of geochemistry, geophysics and drilling data for the Mt Mansbridge project, and has started to assess this data to generate new prospects for drilling.
A reconnaissance program is underway to prepare an exploration program to validate priority drill targets and the potential for rare earth element mineralisation.
Drilling at Mt Mansbridge is expected to start in the January 2021 quarter and will focus on heavy rare earth elements.
Red Mountain Mining is fully-funded for all of its exploration activities and the company plans a share placement to raise $360,000 from professional and sophisticated investors.
The rare earths market has become a hot sector following Wesfarmers’ $1.5bn attempted takeover of Lynas Corporation and because of market speculation that China, a large producer, may move to restrict shipments of material to the US.
This has resulted in strong global interest in the identification and development of non-Chinese sources of rare earths to reduce dependency on supply from China.
Drilling is to start in November at the company’s Mt Maitland high-grade gold project in WA’s Murchison goldfield that contains two mineralised shear zones over a 19km strike length.
The maiden drilling is planned for 18 holes for 1,300m at Mt Maitland which lies 51 km from WestGold Resources’ (ASX:WGX) Fortnum gold project.
At the company’s Koonenberry gold project in NSW, preliminary exploration is planned, and land access agreements for the exploration work are in the process of being finalised.
Tenement areas in Koonenberry contain orogenic gold potential and is highly prospective.
The project tenure straddles the northern boundary of the Koonenberry gold field and the New Bendigo Fault in Victoria, and adjoins Manhattan Corporation’s (ASX:MHC) Tibooburra project which has a new high-grade gold discovery.
Meanwhile, Red Mountain Mining has extended its exclusive exploration rights over its Mukabe-Kasari copper-cobalt project in the Democratic Republic of Congo to September 2021.
Johannesburg-based geologic consultants Minrom Consulting has supervised an extensive soil sampling program at Mukabe-Kasari, and Red Mountain Mining is working with the firm to devise an exploration program for the project.
Minrom conclude the project holds potential for a stratiform copper mineralised body with possible cobalt mineralisation similar to the world-class Kamoa-Kakula copper project, believed to be one of the largest in Africa.
The exploration program for the project will include detailed field mapping to determine structural characteristics at Mukabe-Kasari, and an airborne geological survey.
This article was developed in collaboration with Red Mountain Mining, 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.