Mineral exploration and development company Frontier Rare Earths hopes to raise awareness about its Zandkopsdrift rare earths project and the potential benefits it holds for South Africa at this year’s Investing in African Mining Indaba.

“We are looking forward to show- casing the rapid progress we have made in the project to date and sharing our excitement about the project’s potential,” says Frontier Rare Earths CFO Paul McGuinness.

He adds that the company hopes to complete its preliminary feasibility study in the first quarter of 2013 and to deliver a definitive feasibility study within nine to twelve months after that.

Should the Zandkopsdrift project go into production, it will result in high- quality jobs for those directly employed at the mine and at the processing plant proposed for Saldanha Bay, as well as for ancillary suppliers providing key materials and reagents to the operations, many of which will be South African companies, says McGuinness.

He adds that the company hopes that, in time, the project will also potentially lead to spin-off industries, as rare earths are used in many high-tech applications.

“Minerals service providers SGS Minerals Services and Mintek are undertaking metallurgical testwork on material recovered from Zandkopsdrift, after which it will seek to develop a flow-sheet for the recovery and processing of rare-earth oxides from the area.

“Engineering consultants SNC-Lavallin has been appointed as lead engineering consultants for the Zandkopsdrift preliminary economic assessment, which was completed in the first quarter of 2012,” says McGuinness.

The 60 000 ha Zandkopsdrift project, which includes the Zandkopsdrift rare-earth deposit, is in the Namaqualand region of the Northern Cape and is the company’s principal project.

The Zandkopsdrift area is situated about 450 km north of Cape Town and 300 km north of the deep-water Port of Saldanha Bay and McGuinness notes that, therefore, access to the area and the infrastructure surrounding it is generally excellent.

In 2010, the company focused on developing the Zandkopsdrift deposit and, on completion of the Canadian National Instrument 43-101-compliant independent technical report in October of that year, sought a listing on the Toronto Stock Exchange to raise funds for the further development of the deposit.

In early 2011, Frontier Rare Earths initiated an extensive 15 000 m drilling programme at Zandkopsdrift.

The Zandkopsdrift deposit comprises a carbonatite-rich, magmatic rock deposit containing significant rare-earth-element-bearing mineralisation within outcropping and near-surface, deeply weathered phases, says McGuinness.

The Zandkopsdrift carbonatite is exposed as a well-defined outcropping hill, about 40 m above a surrounding plain. It has been the subject of several geological, mineralogical and metallur- gical investigations since the 1950s.

The main rare-earth-bearing minerals of monazite and crandallite and the mineralisation styles at Zandkopsdrift are similar to other rare-earth deposits being evaluated and developed globally, most notably that of rare earths miner Lynas Corporation’s Mount Weld deposit, in Australia.

The highest-value heavy rare-earth oxides, namely europium, terbium and dysprosium, are contained at elevated levels at Zandkopsdrift, compared with several other deposits being evaluated principally in Australia and North America.

Further, the levels of thorium – 178 parts per million (ppm) – and uranium (47 ppm) in the Zandkopsdrift deposit are low, and compare favourably with many of the more advanced rare earths projects worldwide. This also reduces the potential environmental implications that may arise, should mine development be undertaken at Zandkopsdrift.
There are about 22.92-million tons containing 532 000 t of total rare-earth oxide (TREO) at an average grade of 2.32% at Zandkopsdrift in the indicated resource category, with an additional 20.81-million tons containing 415 000 t of TREO in the inferred resource category, with a 1% TREO cutoff grade.

McGuinness says it is important to note that there are a series of higher-grade zones within the overall resource estimate at Zandkopsdrift, which are considered to be sufficient in size for exploitation as discrete units within the deposit.

The 2.5% cutoff zone is a discrete area referred to as the Zandkopsdrift B zone, which contains about 450 000 t of rare- earth oxide and is expected to be the initial focus of the company’s activities.

McGuinness notes that the Mining Indaba is a premier mining conference in Africa, which the company attends every year.

“All our senior management – from project development and geology to finance – will be in Cape Town from February 4 to 7 for meetings with Mining Indaba delegates who express interest in Zandkopsdrift.

“Networking is critical in this business because it is international. Attempting to marry international finance and expertise with opportunities, potentially in remote locations, requires events like this to provide a platform for this type of engagement,” he says.

In addition to providing interested parties with information on the project, McGuinness says the company’s main focus is on increasing the potential to network and reach out to people it believes can assist in bringing the project into production over the next three years.

“The aim is to construct the mine and processing plants on site and in Saldahna Bay over the course of 2014 and 2015 and then move into a phased production ramp-up,” he states.

 

African Mining Challenges

McGuinness notes that the African mining industry faces some challenges.

“Foreign investors need a clear and consistent message with regard to mining companies and foreign investment in general. South Africa failed to maintain its share of global investment in this sector during the commodity-boom years, owing to concerns about the investment environment.

“The country needs to send a clear message that it is open for business and that it welcomes foreign investment and expertise. Although it is difficult to speak about the African mining sector in general, as it is so vast, the same principle is relevant,” he says.

McGuinness notes that mining is inherently a risky business, particularly for early stage miners, and adding regulatory uncertainty does not make it any easier to commit to investments.

“Frontier Rare Earths believes the best way forward for any mining company is to ensure open and honest lines of communication to all parties involved in projects and that there is support for their projects at all levels – from local communities to central government.

“We comply with all obligations in South Africa and have engaged extensively with the local communities around the proposed mine site at Zandkopsdrift to communicate to them what we are hoping to achieve,” says McGuinness.

Despite the challenges, he says Africa provides enormous opportunities, which will not disappear, for mining companies.

“Regulatory, infrastructural and other challenges are hopefully temporary, so the medium- to long-term future is bright for the African mining industry.

“The question is in how quickly these issues can be addressed, particularly in a more depressed economic climate, where there is less risk capital available.

“Therefore, it is essential for governments to try to make their countries more attractive to investors,” he concludes.