TORONTO (miningweekly.com) – TSX-V-listed Elissa Resources aims to start drilling at its Thor rare earth elements property in Nevada’s Mojave Desert region – just 26 km east of Molycorp’s Mountain Pass mine – by the end of the year.
CEO Paul McKenzie said in an interview on Friday that the property had shown “exceptionally” good data from a recently completed airborne magnetic survey, and that surface sampling had indicated the presence of heavy rare earths that are in a significant supply shortfall.
“We’ve got almost 10% of our grades represented by heavies,” he said of the surface sampling programme Elissa had conducted.
Further, the samples included four of the heavy rare earths deemed to be most critically short in supply – dysprosium, terbium, yttrium and neodymium, according to McKenzie.
“We have strong representation of all four of those.”
While Molycorp is set to become one of the first major nonChinese sources of rare-earth elements once it completes the modernisation and expansion of the erstwhile shuttered Mountain Pass mine next year, only 0.3% of its production mix will be heavy rare earths.
Australia’s Lynas Corp will also only produce very small amounts of heavy rare earths when it comes into production, leaving the Western world still greatly dependent on China for supplies of heavy rare earths.
The Asian powerhouse now accounts for around 95% of the world’s rare earth supplies, but has been curbing production and exports in a bid to clean up the industry's dismal environmental track record and to protect what it says are finite resources.
McKenzie said it was key that his company had indications that Thor – not to be confused with Avalon Rare Metals’ Thor Lake project in Canada – contained the heavy rare earths.
“There are over 200 rare earth companies right now, and over some time you’ll see a lot of that thinning out with new production coming on stream,” he commented, adding that projects able to produce dysprosium, terbium, yttrium and neodymium in good quantities would be “very profitable”.
Elissa had held dialogue with Molycorp, but McKenzie declined to go into detail.
“We’re talking to each other in amicable fashion,” he said.
The soonest Elissa might bring Thor into production, provided it proves economically viable, would be in four to six years time, he noted.
The recently passed US National Strategic and Critical Minerals Policy Act of 2011, designed to ensure the country had access to supplies of commodities, would benefit Elissa’s Thor project “greatly”.
“There’s going to be a lot of support for companies that are producing commodities that are in short supply,” said McKenzie.
Elissa also owns the Sage Creek gold project in Idaho and the St. Elmo gold project in Nevada, which McKenzie said the company would consider unbundling into a separate entity if it made a discovery at one of them.
“What we hope to do is, if we are fortunate enough to make a discovery, likely bundle them up and put them into a different company.”
At Sage Creek, Elissa will start drilling “in a matter of days from now”, he said, adding that the property had “multimillion-ounce potential”.