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  • Spectrum Rare Earths Increases Grades At Skyfall Magnetic Rare Earth Project 0 comments
    Jul 28, 2014 9:13 PM

    Spectrum Rare Earth's (ASX:SPX) trial pitting at its Skyfall Magnetic End Use Rare Earth Prospect in the Northern Territory has significantly increased grade and extended mineralisation to over 350 metres in cross section.

    The positive results continue at Skyfall, as assays show an improving grade profile in the the fastest growing and highest value 'magnet feed' rare earth segment.

    Step-out pitting has extended significant mineralisation to over 350 metres in width. There are further assay and metallurgical results pending.

    A number of larger bulk samples are now being tested both in Australia and overseas to investigate the potential for lower cost mineral processing options.

    Skyfall has a very high distribution of Magnetic Rare Earths when compared to other rare earth prospects around the world.

    Importantly, MEU's are experiencing the strongest growth rates across the sector due to their demand in efficient energy technologies.

    The average grade of recent trial pit intersects is 0.58% Total Rare Earth Oxide (TREO) including 39% Magnetic End Use Rare Earth Oxide (MEU REO).

    Trial Pit 5 intersected 2 metres at 0.66% Total Rare Earth Oxide (42% Magnetic End Use Rare Earth Oxide).

    These prove a higher grade profile than the grade profile from recent drilling, which returned 0.34% TREO, which the company believes was depressed due to sample loss.

    Diamond drilling, trial pitting and outcrop sampling have proven the potential for the Prospect to be of significant size.

    TP5 is the first of an eight pit sampling program the company is digging to infill gaps to better understand the mineralogy and the potential target size of the area.

    Importantly, trial pits have provided bulk samples for comprehensive mineralogical and metallurgical testing.

    These will be tested both in Australia and overseas to investigate the potential for lower cost mineral processing options.

    This work is currently in progress at laboratories in Australia and overseas as Spectrum continues to look for low cost mineral processing options.

    Notably, this proves a significantly higher grade profile than the grade profile from recent drilling (0.34% TREO), which the company believes was depressed due to core loss.

    Deep trial pitting (5 metres deep) continues at the far north and south extents of the Prospect (6 kilometres strike length).

    Target geology has been intersected and assays are pending.

    Another competitive advantage is the exceptionally low level of contaminant elements thorium and uranium at 7ppm and 37ppm respectively.

    Skyfall Prospect

    Skyfall has an unusually high distribution of Magnetic Rare Earths when compared to other rare earth prospects around the world.

    It is located about five hours drive south of Darwin in a district that is home to multiple heavy and magnetic end use rare earth prospects

    A number of larger bulk samples are now being tested both in Australia and overseas to investigate the potential for lower cost mineral processing options.

    This is being investigated by Mineralogy Pty Ltd.

    Three types of mineralogy testing have concluded that rare earth phases have high associations with clay minerals.
    A targeted study (including mild leach testing) has shown the potential for other lower cost processing options including leaching of absorbed species.

    Mineralisation at Skyfall is located in a weathering profile above volcanic rocks.

    REE host minerals such as secondary Xenotime could offer some low cost processing characteristics.

    The shallow nature of mineralisation also allows for targeting of rare earth mineralisation with backhoe trial pit excavations as well as with drilling.

    Magnetic Rare Earths are experiencing the strongest growth rates across the sector due to their demand in efficient energy technologies, primarily in the automobile industry.

    Demand had hit almost 120,000 tonnes in 2013 and is expected to grow to more than 160,000 tonnes in 2016.

    High Magnetic End Use Rare Earth distributions in the pits at Skyfall range from 34% to 44% of TREO including high averages of 19.9% neodymium and 4.2% dysprosium oxide of TREO.

    Analysis

    Assays from trial pitting at Spectrum Rare Earth's Skyfall prospect have returned higher grades from a project that already has racked up a number of firsts.

    Significantly, larger bulk samples are now being tested both in Australia and overseas to investigate the potential for lower cost mineral processing options.

    Shallow mining and drilling carries with it many advantages for development, with potentially lower Capex and Opex.

    Skyfall and its world-leading proportions of MEU REO's will upon development have a Leading Basket Price greater than Molycorp's Mt Pass and Lynas Corporation's (ASX:LYC) Mt Weld projects.

    The estimated basket price of just above $70 per kilogram is higher than most of its peers.

    That Skyfall represents a large single location offers potential to impact on Magnetic REE and HEE demand.

    There are further price catalysts ahead including pending assay and metallurgical results.

    Given that Skyfall has a very high distribution of Magnetic Rare Earths when compared to other rare earth prospects around the world, we would not be surprised to see significant interest from potential industry partners, wanting an "in" to this project.

    With good road access and located close to the port of Darwin, the project ticks the box in terms of proximity to Asian markets.

    Despite this, Spectrum has one of the lowest market capitalisations when compared against a peer group of REO-focused companies.The Magnetic Sector is one of the fastest growth segments for Rare Earths, where the drivers are clean energy expansion and miniaturisation i.e. hybrid and electrical vehicles.

    Its market capitalisation is decidedly light at just $7.05 million. In comparison, Northern Minerals is capitalised at $65.12 million and Lynas at $392.23 million.

    With initial coverage, Proactive Investors estimates potential for strong price growth from current $0.042 to $0.12 - $0.16 within 12 months.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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