GBM Resources (ASX: GBZ) has upgraded the Inferred Resource for the Milo Iron Oxide Copper Gold (IOCG) and Rare Earth Elements and Yttrium (REEY) Project in North West Queensland to 187 million tonnes containing 113,000 tonnes of Rare Earth Oxide (REO) Resource.
The Milo resource has expanded to over a kilometre in length stretching over 200 metres wide and still remains open.
A scoping study is underway at Milo.
A maiden copper equivalent resource, due by the end of the September quarter, is now underway and will provide the basis for the move to a Pre-Feasibility Study.
The Inferred Resource now stands at 187 million tonnes at 600 parts per million for 113,000 tonnes of rare earth oxide.
Over 23% of the total rare earth elements and yttrium (TREEYO) Resource comprises neodymium, yttrium, dysprosium and lanthanum - elements considered to be in undersupply for the medium to long term.
In other positive news for GBM, preliminary metallurgical test work indicates that significant beneficiation of rare earth elements (NYSEMKT:REE) can be achieved through proven technology, which is essential in developing a competitive treatment cost model for Milo ores.
Preliminary results from ongoing test work has demonstrated that minerals rich in REE can be concentrated using wet high intensity magnetic separation (WHIMS) units, a widely used means of increasing the ore grade and lowering treatment costs.
In initial testing WHIMS has resulted in high recoveries of up to 80% of TREEYO to a concentrate.
Milo Resource update
The Milo resource model has been updated to include results of recent drilling which returned highlight intersections on both the northern and southern limits of the previous resource model.
These intersections included 70 metres at 0.8% copper equivalent, including 18 metres at 1.3% copper equivalent and 51 metres at 0.8% copper equivalent.
Significant rare earth element intersections were also recorded in these holes, including 20 metres at 3,979 parts per million TREEYO and 11 metres at 1,382 parts per million TREEYO.
Importantly, these results continue to confirm that the mineralisation identified to date is part of a much larger mineralising system.
As with the previous model, the zone of REEY mineralisation is broad and coherent over the entire strike length of the resource, now in excess of 1 kilometre.
Scoping Study progress
The Milo Scoping Study is progressing with preliminary mine design, geotechnical and recovery parameters developed. A concept metallurgical flowsheet has also been developed and capital cost estimates are progressing.
Ongoing metallurgical test work to determine the host minerals for TREEYO mineralisation and to investigate potential means of beneficiation and concentration has recently confirmed two key assumptions made in the initial flow sheet development.
Firstly, that heavy media separation does have the capacity to upgrade copper equivalent and TREEYO elements, and secondly, that WHIMS technology is effective in upgrading TREEYO concentrations.
Apatite flotation was also demonstrated to be highly effective and should permit a high grade apatite (phosphate) concentrate to be produced as a saleable by-product from any future processing plant at Milo.
The Scoping Study has been extended to include the revised rare earth Resource.
The recent drilling program has confirmed that the mineralisation identified to date is part of a much larger system at Milo, with mineralisation remaining open to the north and south.
The Milo deposit covers a broad TREEY zone, over 200 metres in places. The dominate rare earth elements include neodymium, yttrium, dysprosium and lanthanum.
The deposit is a large breccia hosted polymetallic IOCG REEY system that also contains valuable copper, gold, silver, cobalt, molybdenum and uranium mineralisation.
Demonstrating the size potential of the deposit, drilling has only been carried out on around 7,500 metres of a 2 kilometre long mineralised system.
Milo has the potential to be a company making project for GBM, as exploration reveals it to be more than just a multi-commodity IOCG deposit.
Exploration has delineated sulphide mineralisation containing copper, gold, molybdenum and uranium that has been overprinted and enveloped by widespread value adding rare earth elements and yttrium.
The Milo prospect is located near Cloncurry in far north Queensland, where exploration and mining activity is heating up.
The completion and delivery of the Scoping Study and Pre-Feasibility Study in 2013 are likely to be highly anticipated, and potential catalysts for the re-rating of GBM as Milo's potential continues to be revealed.
Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.