Spectrum Rare Earths (ASX:SPX) will re-start diamond drilling at Skyfall, Northern Territory in early September to explore for primary Magnetic End Use Rare Earth mineralisation below existing surface assays.
This will be closely watched as drilling seeks to test the potential must exist for higher grades in primary feeder or fault zones at greater depths.
The near surface mineralisation has been highly encouraging.
Three holes will target primary mineralisation beneath the recently announced Exploration Target of 17 to 21 million tonnes at 0.4% to 0.6% Total Rare Earth Oxides, which equates to 36% to 38% Magnetic End Use Rare Earth Oxides.
Drilling will focus on geochemical anomalies where they are interpreted to intersect major fault corridors, with holes designed to target the Northern, Central and Southern areas along a 6 kilometre strike length.
This highly anticipated campaign is expected to take one month to complete.
Skyfall
The Skyfall target sits above a major fault corridor adjacent to an interpreted large, deep seated granite body.
The granite is conceptualised to have provided the original REE source, and major faulting has acted as a conduit for fluid circulation and the transport of mineralisation to the surface.
Recent near surface mineralogy at Skyfall has identified secondary rare earth minerals including crandallite.
Notably, crandallite group minerals are known secondary minerals associated with intrusive controlled rare earth deposits such as Mt Weld.
Its presence in the weathered zone at Skyfall, in association with high neodymium distributions, supports Spectrum's interpretation of a potentially higher grade mineralised stock or feeder system beneath this surface zone.
Dominant rare earth footprint
Spectrum holds 10,000km2 of prospective land package across 21 tenements, making it a dominant REE ground holder in the Northern Territory.
Multiple consolidated project areas are held across several key geological and metallogenic terrains, affording opportunity to diversify exploration into numerous commodities.
Spectrum's main focus is its flagship Skyfall Heavy and Magnetic End Use Rare Earth District where it retains 3,000 square kilometres, just 4 hours' drive south of Darwin and associated infrastructure.
Analysis
Not surprising given the size of the potential prize, Spectrum's share price has been rising in the lead up to this drilling and is expected to continue this trend as drilling draws closer.
Early resource estimates for Skyfall would support production of 722,000 kilograms of neodymium, 152,000 kilograms of dysprosium and 152,000 kilograms of praseodymium per annum over a conceptual 20 year mine life scenario.
Spectrum has a much higher percentage of the more valuable magnetic and heavy rare earth oxides to the ore currently being mined by Chinese companies
Upcoming share price catalysts include drilling results as well as trial pit samples being tested to investigate lower cost mineral processing options; and mineralogy and metallurgical results that are also due in coming weeks.
Proactive Investors sees potential strong price growth from current prices of $0.056 to $0.12-$0.16 within 12 months.