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Cradle Resources To Start Larger Scale Panda Hill Pilot Test Program

Cradle Resources (ASX:CXX) will soon start the 75 tonne pilot plant test for its Panda Hill Niobium Project in Tanzania.

This is another positive step towards the project potentially becoming the world's next niobium producer.

Attracting interest, there have been no new niobium producers since 1976 (39 years).

Niobium production generates in excess of $1 billion in operating profits per annum at current prices, and is a "strategic" metal used for making harder, lighter steel products.

The metallurgical variability program is currently being finalised while results from the mini-pilot plant test are being used to optimise the integrated pilot plant.

Recoveries and grades from latest bench scale program have confirmed robustness of the Pre-Feasibility Study flowsheet while leach test work optimisation on flotation concentrate in progress.

The revised Definitive Feasibility Study, which considers a revised concept with initial processing plant throughput of 1.3 million tonnes per annum extending to 2.6Mtpa in later years, is due for completion in the fourth quarter of 2015.

Panda Hill has Measured Resource of 16 million tonnes at 0.63% Nb2O5 and an Indicated Resource of 53 million tonnes at 0.5% Nb2O5.

It has an Inferred Resource of 108 million tonnes at 0.48% Nb2O5 and an Exploration Target of 200 million to 400 tonnes at between 0.4% and 0.6% Nb2O5.

Grant Davey, managing director, commented:

"These confirmatory met test results are important for the optimisation of the larger scale pilot test program which will be carried out over the next two months.

"This is another positive step in ensuring that Panda Hill is the next niobium producer in the world."

Variability Program

The variability program included a total of 34 individual samples made up in most instances of continuous drill core runs that represent the major material types that will be treated in the current mine plan.

The focus was on material contained within the first ten year pit shell and samples were collected in this area across numerous drill holes and represent the orebody both laterally and vertically.

Mineralogy results (Qemscan) show that the variability samples are consistent with the composite samples tested previously with respect to composition, niobium deportment (i.e. pyrochlore or columbite distribution) and niobium mineral liberation.

Based on these results it would be expected that the flotation performance of these samples will be in line with the composites and blends tested previously.

The comminution data again show the data is consistent with previous results and the mill sizing and power draw as defined in the PFS is not likely to change with these new results.

Both the fresh and moderately oxidised flotation tests were aligned with previous test work results.

For the fresh carbonatite tests the average percentage niobium which reported to the niobium rougher float was 82.9%, after taking into account losses associated with desliming, magnetic separation and pyrite flotation.

This compares well with the best results of the blend and composite tests previously done.

Rougher concentrate grades (2.1% Nb2O5) on average were lower than in the previous tests, but were associated with higher overall recoveries.

The final concentrate grades were on spec (average 43.4%) which as previously shown will easily be increased to approximately 50% after the concentrate leach stage.

For the moderately oxidised materials the average niobium reporting to the flotation rougher feed (81%) was similar to the results from the PFS.

On average lower rougher concentrate grades were achieved, but again higher recoveries were achieved.

The high grades achieved in the final concentrates indicates that the lower rougher concentrate grade did not impact on the final concentrate grade and confirms previous PFS test results.

Mini Pilot Plant

The mini-pilot plant campaign at SGS Lakefield in Canada has been completed. This piloting activity was undertaken to provide data to assist in both the set-up and operation of the 75 tonne integrated pilot plant that is planned to start in July 2015.

Key learnings from the campaign were:

- The importance of desliming on niobium flotation and the potential need for an additional stage of desliming in the rougher flotation circuit prior to the rougher-scavenger float. This concept was successfully tested in the laboratory;
- Recirculating streams do not impact process chemistry;
- There is a tendency for the recycle stream to build up gangue minerals and the cleaner circuit has been modified to more effectively reject the gangue minerals;
- Rougher grades and recoveries were controlled with collector addition rates;
- Final concentrate grades were achieved; and
- The inclusion of a magnetic separation unit on the final concentrate will be useful for the high magnetite feeds.

The results indicate that losses to desliming, magnetic separation and pyrite concentrate were all on target with the percentage of niobium reporting to the rougher flotation averaging 78%, in line with previous work.

The rougher concentrate recovery was improved to 69%. An additional desliming stage before the scavenger float was shown to be beneficial.

Final cleaner concentrate averaged 42% with the associated cleaner circuit recoveries ranging between 73 and 81%.

These results achieved were comparable with the previous locked cycle test work undertaken during the PFS, although with the short running time and split circuit the circuit was not fully optimised and stabilised.

Niobium concentrate produced from this campaign is being used for the concentrate leach development and optimisation program which is currently underway.

Panda Hills Project

The Panda Hill Niobium Project is located in the Mbeya region in south western Tanzania about 650 kilometres west of the capital Dar es Salaam.

Panda Hill is located close highly developed surrounding infrastructure including the new Songwe international airport (8 kilometres away), the TAZARA Rail line (2 kilometres away), the Dar es Salaam - Tunduma Highway (5 kilometres away) and major power infrastructure (26 kilometres away).

The industrial city of Mbeya is situated only 26 kilometres from the project area and will be a significant service and logistics centre for the project.

Analysis

The larger scale 75 tonne pilot plant test will provide all technical information required to complete the final Feasibility Study for the Panda Hill niobium project.

It also takes Cradle Resources another step closer towards developing the project as the next niobium producer in the world.

Initial results from the pilot test are expected from the beginning of September.

This is especially attractive given that there have been no new producers for 39 years and the strategic value of the metal.

Progress is also being made on sorting out the ownership structure, licence renewal and securing offtake.

In June 2014 Cradle reached an agreement with Tremont Investments Limited (backed by Denham Capital) to fund the Project to DFS and beyond.

This not only provides certainty by de-risking the company, it also points to the quality of the project and its potential upside.

Tremont recently exercised its right to acquire a further 12.5% of the Panda Hill Niobium Project in Tanzania for a further US$5 million (AUD$6.25M) investment, taking it to 37.5% in total.

To date Tremont has invested US$10 million in two separate tranches.

Shares in the company have jumped 40% since February to the current $0.215.

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