TORONTO (miningweekly.com) – Aspiring integrated rare earths producer Great Western Minerals Group (GWMG) on Thursday said it was on track to complete the refurbishment of the previously producing rare earths mine Steenkampskraal, in South Africa’s Northern Cape province, by mid-2013.
The company said that while its focus was mainly set on completing the Steenkampskraal monazite mine project, it was actively evaluating strategic spin-off opportunities for its four exploration properties in North America.
The Steenkampskraal mine is a former high-grade producer of rare-earth metals. Global demand for rare-earth metals, which are used in a variety of applications, including the manufacture of hybrid cars, is increasing, with 95% of the supply provided by China, which is limiting the rare-earth metals it exports.
The company said it was continuing with a “highly successful” drilling programme on the Steenkampskraal property and expected to release an updated Canadian National Instrument (NI) 43-101-compliant technical report and resource estimate before the end of the year.
GWMG had received the remaining $63.2-million held in escrow as part of its $90-million convertible bond financing. The company filed its first NI 43-101-compliant resource estimate at the beginning of June, thereby satisfying the escrow release condition.
GWMG had to confirm that at least 20 000 t of total rare-earth oxides, including yttrium, in the sum of the measured, indicated and inferred resource categories were present at the Steenkampskraal property, using a 1% cut-off grade.
Immediately upon closing the convertible bond offering on April 5, GWMG received $10-million, followed by about $63.2-million on June 6. About $10.8-million remains in escrow to satisfy interest payments.
Meanwhile, the company had reported that additional assay results on the property pointed to a higher distribution of neodymium, dysprosium and terbium when compared with historical data, all of which were critical elements to GWMG’s alloy-manufacturing operations.
The surface refurbishment project was reported to be moving towards its scheduled completion during mid-2013, with the construction of containment ponds and finalising of the headgear, winder and associated electrical equipment.
The development of the Steenkampskraal is managed according to National Nuclear Regulator of South Africa requirements, with all activities and authorisations being up to date.
Recent progress was achieved with the authorisation of pumping and storage of mine water, approval from the Department of Energy for transport of materials, and the submission of worker safety assessments for the forthcoming chloride plant-building phase.
GWMG said it was in the process of awarding the contract for the next phase of underground mining preparations that would focus on the bottom portion of the decline. It was expected this part of the refurbishment project could be completed in about two months.
The company is fixated on achieving first cash flow from the Steenkampskraal project, which would take place as soon as the mixed-chloride plant is completed.
The decision on the final position of the mixed chloride production plant, to be located at the Steenkampskraal site, had been revised twice since the two initial locations proved, after sterilisation drilling, to have significant monazite mineralisation beneath them. A final site had now been selected and approved for construction.
A rare-earth solvent extraction separation plant near Steenkampskraal is also planned for the site.
GWMG said it was expecting a final scoping report on both plants to outline capital and operating costs, as well as timelines for its construction, in September.
The company also has two rare-earth alloy manufacturing plants, one being operated by subsidiary Less Common Metals (LCM) in Birkenhead, UK and the other by subsidiary Great Western Technologies in Troy, Michigan.
As LCM worked toward its first commercial shipment of alloys using its new strip cast furnace, LCM was also planning for the installation of a second strip cast furnace, scheduled for delivery in 2012. More such furnaces were planned to match alloy production with the ramp-up of the Steenkampskraal mining operation, to match production with the availability of oxides from Steenkampskraal.
GWMG said it was looking for a new CEO.
The company’s TSX-V-listed shares traded 1.79% lower at 27 Canadian cents apiece on Thursday morning.