Great Western Minerals Group (CVE:GWG) (OTCQX:GWMGF) announced Friday its initial NI 43-101 resource estimate for its Steenkampskraal rare earth property in South Africa, which satisfies the release conditions for the remaining funds under its US$90 million convertible bond financing.
The integrated rare earths company said it filed the estimate and technical report on SEDAR.
The company noted that the NI 43-101 report indicates the presence of 13,823.64 metric tonnes of total rare earth oxides (TREO), including yttrium, under the indicated resource category, and 14,147.76 metric tonnes under the inferred resource category, each using a one per cent cut-off grade.
With the filing of the NI 43-101 report, Great Western has satisfied the escrow release condition of the convertible bond financing of US$90 million, and expects the remaining funds, net of US$10.8 million that will remain in escrow to satisfy interest payments, will be released to the company in due course.
In order to satisfy the condition, the company had to confirm at least 20,000 metric tonnes of TREO, including yttrium, from the measured, indicated and inferred categories using a one per cent cut-off grade.
"We are extremely pleased to be able to deliver, as scheduled, a NI 43-101 resource estimate and technical report that achieves two vital goals for our company," said president and CEO Jim Engdahl.
"First, the report illustrates that the Steenkampskraal project is the high quality project that we believed it to be at the time we set out to acquire it. Steenkampskraal has been, and will continue to be, absolutely pivotal to the success of GWMG.
"Second, the report enables the release of funds from the offering. With these funds in place, we are positioned to continue with the development of the Steenkampskraal operation including the exploratory drilling that we anticipate will further increase the resource base."
The database provided to Snowden Mining Industry Consultants for the resource estimate at Steenkampskraal, consisted of 67 diamond drill hole samples, of which only 26 drill holes contained assay data, and 67 underground channel samples, of which only 35 contained assay data.
The database provided for the evaluation of the tailings dams comprised information from 151 drill samples.
Great Western combines upstream resource exploration and extraction at its Steenkampskraal mine in South Africa, with downstream metals processing facilities in the US and UK. The company makes specialty alloys, which are used in the battery, magnet and aerospace industries.
Its development program at Steenkampskraal is central to ensure a strong flow of feedstock for its downstream processing - the company intends to be one of the first to produce significant quantities of the more valuable heavy rare earth oxides, which are important materials for alloys.
The rare earths company, which eventually plans to be its own supplier as well as creating a supply certainty for global customers, has several operational targets this year aside from the NI 43-101 report released today, including the refurbishment of the mine shaft at Steenkampskraal in the first half of this year.
Great Western has said it is on track for this target, as well as for the launch of mining activities by the end of 2012, and the construction of a mixed chloride plant and separation plant near Steenkampsraal in the first half of 2013.
At its Less Common Metals (NYSE:LCM) processing operation in the UK, the company completed the first pour with its new strip casting furnace at the end of January, and in late March, the company placed an order for a second strip cast furnace, allowing alloy manufacturing capacity to double when the second furnace arrives and is commissioned later this year.
The second strip cast furnace will increase the total production capacity of LCM to approximately 2,000 tonnes per annum of rare earth alloys.
The company is boosting capacity in preparation for its rare earths production coming online, and as demand for the metals continues to grow, and as China increasingly restricts exports.
Great Western announced its first quarter results late Wednesday, noting that its financial performance exceeded that of the prior year period.
For the quarter that ended March 31, the integrated rare earths company posted revenues of $4.47 million, compared to $4.23 million for the previous year period.
Manufacturing revenues from the company's processing facilities, LCM and Great Western Technologies, represented a 5.7 per cent increase over the first quarter of 2011.