West Cobar Metals Limited (ASX: WC1) - The Salazar REE Project - High Grade & a JORC Resource.
Coffee with Samso Episode 178 is with Kevin Das, Executive Director of West Cobar Metals Limited (ASX: WC1)
The REE story is maturing for investors as the complexity of what is a good REE project is has moved several levels. What is still lagging is still a sound grounding on what is exactly an economic REE. There has been several stories on Samso but I have to admit that the jury is still a long away from a decision.
When Kevin Das, the Executive Director, of West Cobar Metals approached me to engage a Coffee with Samso, we spoke deeply on what make West Cobar different to other REE stories. The first major difference is the existence of a JORC resource for the Salazar REE project. This resource does give WC1 a first mover advantage but the competition is fast catching up.
The details of the resource may ultimately be the difference but we will need to wait for some critical steps such as the metallurgical results. The other factor which would drive this story far is that the deposit sits on top of an ultramafic base. What this means is unknown for now. There is evidence of other deposits that the enrichment of the REE is related to the base.
Salazar is the only REE deposit that I know of that is not on a granitic base. To add to the story, there is a HPA story here. There is a aluminium inferred resource on part of the Salazar resource. This may become a credit to the mining process and hence benefit the overall feasibility of the deposit.
The West Cobar Story
West Cobar is a minerals exploration and development company focused on rare earths and battery minerals within Australia and the US.
The Salazar REE Project
The Salazar Rare Earths Clay Project is located on non-agricultural undeveloped state land approximately 120km north-east of the township and deep-water port of Esperance in Western Australia. The Newmont deposit, located on the easternmost tenement at Salazar, contains an estimated JORC Inferred Mineral Resource of 43.5Mt at 1192ppm TREO + Y2O3 (500ppm cut-off). The O’Connor prospect to the west of Newmont has potential to host further significant high-grade rare earths mineralization.
Figure 1: Location of the Salazar Project. (Source West Cobar Metals Limited)
Nevada Lithium Project
The Montezuma Well and Big Smoky Valley claims are considered prospective for large-scale sedimentary-hosted lithium claystone deposits. The claims are located within the world class mining-friendly jurisdiction of the Nevada lithium district and host similar geology to known major lithium deposits in the region – including American Lithium (TLC deposit), American Battery Technology Company (Tonopah Flats deposit), Ioneer (Rhyolite Ridge deposit) and Century Lithium (Clayton Valley deposit).
Figure 2: Location of the Nevada Lithium projects. (Source West Cobar Metals Limited)
Hermit Hill Lithium Project
The Hermit Hill project area is located in the Litchfield Province in the Northern Territory, roughly 100km south-southwest of Core Lithium’s Finniss Lithium Project and Lithium Plus Minerals’ Lei lithium prospect, and 30km west of Ragusa Minerals’ Tank Hill lithium discovery. The project is prospective for pegmatite-hosted lithium mineralisation.
Figure 3: Location of the Hermit Hill project. (Source West Cobar Metals Limited)
The West Cobar Difference
Currently, on the Australian Stock Exchange (ASX), there seem to be an overflow of REE stories. Every week there are companies announcing the presence of REE and one could be forgiven to felling a sense of boredom. When the REE story emerge nearly 2 years ago, there was excitement and a bullish feel to this sector. However, as investors start to get a flood of news, this excitement starts to turn into confusion.
What I can say about the Salazar REE deposit is that it holds a few point of difference. It is still a clay hosted deposit as opposed to the ionic versions but the high grade nature of the resource - 43.5Mt @ 1192 TREO, makes this one of the deposits to take note.
On top of the REE resource, there is a HPA n inferred JORC Resource of 28.3 Mt at 23.4% Al2O3 (at 10% cut off). How this adds to the economics of the minnig of the Salazar REE story is yet to be played out. The positive would be that it adds credit to the process and lowers the overall feasibility and the downside is that it is mined and put aside. As the HPA content is part of the overall Salazar deposit means that there is no extra cost in mining it or isolating it.
The clay mineralisation at Newmont has a relatively high magnet rare earth oxide content comprising about 25% of the basket. In particular the Newmont deposit is relatively high in
high value, heavy magnet REE content, comprising 3% dysprosium and 0.5% terbium content.
Praseodymium makes up 4.2% and neodymium 16.8% of TREO (See Figure 4).
Figure 4: REE distribution within the Salazar deposit. (Source: West Cobar Metals Limited).
The other factor which may eventually affect the leachability of the deposit may lie in the fact that this deposit is overlaying a ultramafic (Amphibolite) basement. Like many of the REE story, the outright understanding of the flow chart of processing is still work in progress. This ultramafic basement is the key difference as all the other known Australian clay hosted deposit sits over granitic source.
Samso's Conclusion
These days, there is a large volume of REE deposits being marketed. We know that there is a Clay hosted and a Ionic hosted REE deposit. The difference is in the ability to easily extract the REE in the downstream process. I have spoken to people who tell me that the difference is not a physical or grade factor, but it in the test of whether they are easily leached out.
The host of ionic deposits are not restricted to the Chinese version as they are also granitic base. I know of an Australian ionic style being hosted over a limestone which is totally different. I am told that research has shown that the enrichment may be helped by the limestone interface.
If this is true, will the fact that the West Cobar deposit being overlaying an ultramafic source lead to a different leaching style? Management seems optimistic but lets wait for the facts.
If we want to look at which of the REE stories are going to have the legs to be at the mining and processing stage, then the odd balls like the Salazar REE project should be on our watch screens. Remember that there is also the potential for the mining of the HPA which is again something that is not present in all the other stories presently being sold in the ASX.
Chapters:
00:00 Start
00:20 Introduction
01:29 About Kevin Das
02:01 Kevin’s experience at Northern Minerals
03:44 All about the Salazar Rare Earth Project
04:21 The unique aspect of the Newmont deposit
05:37 The drill results at Salazar
06:29 The resource in Esperance
07:09 Understanding the drill results
10:34 West Cobar Metals being a first mover
12:14 The Alumina resource in Newmont
16:31 Projects in the US
17:21 Discussion about the journey of rare earths
21:52 The rare earths capital market
23:49 News flow
26:54 Challenges faced by West Cobar Metals
29:01 Why West Cobar Metals?
30:02 Conclusion