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On the surface, Elk Creek, Nebraska, doesn’t appear any different than your average small Midwestern town. But under the community’s monotonous rolling pastures lies a deposit of rare materials that has many people quite excited.
Back in the 1970s and 1980s Molycorp (MCP) tested the area and found substantial amounts of Niobium and rare earth elements. Due to financial constraints, however, the project was abandoned and largely forgotten by those outside the region. That is, until Peter Dickie, CEO of Quantum Rare Earth Developments Corp. (QREDF.PK), caught wind of the story and began to take notice.
His company set out to re-test the Elk Creek deposit using modern technology, in hopes of defining a mine and someday recovering elements from it.
Today, the company received the long-awaited resource calculation of Niobium at Elk Creek.
“The results actually exceeded our original hopes by quite a wide margin,” says Dickie.
Historic numbers from Molycorp (MCP), which tested the area decades ago, estimated about 39 million tons of Niobium at 0.82%. “We had hoped for something in the same range as that,” Dickie adds.
But, in a stunning development, the results reveal a deposit over twice that size, roughly 83 million tons of 0.62% Nb2O5. The results are phenomenal and likely make Elk Creek the largest Niobium deposit in North America.
The numbers also favorably compare to reserves of 32.09 million tons at 0.56% Nb2O5 of the highly profitable Canadian Niobec mine, owned by IAMGOLD (IAG).
The full resource calculation erases doubt about the immense size of the Niobium deposit and about the Elk Creek project itself. The news is huge for Quantum Rare Earth, for Nebraska, and for the United States.
Niobium is used in many industries, but most importantly, the element is considered a “strategic metal” by the U.S. government for its application in defense materials. Yet, the nation imports nearly 100% of the material. Elk Creek may provide a way to diversify the country’s supply chain of the critical element.
Although Elk Creek’s Niobium grade was slightly below historic estimates, they are still very solid. Moreover, the company believes large pockets of higher grade Niobium are deposited near the top of the structure.
“Our drilling in April will help define exactly how big that higher-grade portion is, but it has us quite excited,” Dickie says.
"Exciting" isn’t a word residents of Elk Creek are accustom to hearing, but after these results, they better start getting used to it.
Disclosure: I am long QREDF.PK.
Source: Quantum Reveals Massive Elk Creek Niobium Numbers