Havilah Resources (ASX:HAV) may have unearthed a surprising new revenue stream at its flagship Kalkaroo copper-gold project in South Australia – rare earths.

The results of a June 2018 pre-feasibility study — which is currently being updated — suggested Kalkaroo would have an estimated net present value (NPV) of $564m and an internal rate of return (IRR) of 26 per cent at a copper price of $US2.89 ($4.22) per pound of copper and $US1200 per ounce of gold.

(Current prices hover around $US2.79/lb for copper and $US1565/oz for gold. Looking good.)

READ: This analyst foresees a copper, cobalt recovery this year

The mine was expected to produce ~ 30,000 tonnes of copper and 72,000 ounces of gold each year over an initial 13-year mine life.

Rare earths (REE) production never entered the equation. Most historic exploration in the region has been focused on base metals, uranium and gold, says Havilah, which means that REE were not routinely assayed.

But after reviewing a limited amount of REE data from older drilling that’s exactly what Havilah did, late last year. Early results have been encouraging.

Two copper-gold mineralised drill hole samples, recently re-assayed from West Kalkaroo, show elevated levels of higher value REE, like dysprosium.

Composites of 11 drill samples also recently re-assayed from the Croziers copper prospect returned similarly elevated REE.

Investors sent the stock up 4.5 per cent to 11.5c per share in early trade.


Promising stuff, the company says, but “considerably more exploration drilling and assaying is required”.

Over the next few months Havilah will focus on the Kalkaroo deposit to determine the distribution and grade of REE mineralisation, especially at West Kalkaroo; and whether the host minerals can be concentrated by standard recovery processes as a by-product.

This will be completed alongside an updated Kalkaroo project pre-feasibility study, which is currently well advanced, the company says.

“The critical questions for Havilah are what mineral(s) host the REE and can the REE be recovered and concentrated to produce a saleable, direct shipping by-product along with copper concentrates?” Havilah technical director Chris Giles says.

“We plan to initiate some strategic metallurgical test work to investigate these questions due to the potential opportunity to enhance the Kalkaroo project economics.

“While the Kalkaroo project will be the initial focus for REE test work, in due course exploration drilling of the stratabound copper-gold mineralisation will also follow up the associated elevated REE at several other locations in the Curnamona Craton such as Croziers and Eurinilla.”

NOW READ: Rare earths could be another ‘buy the sector’ situation, just like nickel


In other ASX tech metals news today:

Gold and lithium explorer Zenith Minerals (ASX:ZNC) recently added a promising US-based rare earths project to its bulging portfolio. Initial studies already show that REEs from the Laramie project in Wyoming occur in a coarse-grained mineral – “indicating potential for easy liberation from the host rock”, Zenith says.

Now, test work on a 100kg bulk surface rock sample will help determine if simple processing techniques at coarse grain sizes can easily upgrade the REE minerals and reject waste minerals. Simple processing = potentially lower production costs.

Results should be available in late January, says Zenith, which was up 5 per cent to 6.3c per share in early trade.