Spotlight on American Rare Earths, page-2749

Halleck Creek shaping up as a potential major source of domestic REEs in US

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Not content with delivering a maiden resource last March that blew its exploration target out of the water, American Rare Earths has gone one better with its first resource update, growing the endowment of its Halleck Creek project in Wyoming by 64%.

The deposit is now defined at 2.34 billion tonnes grading 3196 parts per million total rare earth oxide based on a 1000ppm cut-off, is of significantly higher grade than comparable Australian projects that use a circa 600ppm cut-off, and on par with Meteoric Resources' Caldeira deposit in Brazil.

The cut-off level has been reduced from 1500ppm, which was used in the maiden resource.

Around 27% of the deposit is high-value magnet rare earths such as terbium, dysprosium, neodymium and praseodymium.

Measured and indicated resources underpinning development studies have increased 128% to 1.4Bt at 3295ppm.

CEO Donald Swartz said the project had "enormous potential", especially given it bucked the usual trend of deposits shrinking during infill drilling.

Halleck Creek remains open at depth and along strike, with only 25% of the project drilled.

Development options

Scale alone isn't enough.

A development needs a supportive environment, and one of the aims of the Inflation Reduction Act is to support US domestic rare earths mining and refining.

China dominates the rare earths market, controlling around 90% of global refining capacity, which is not a situation the US government wants to see continue.

ARR also believes it has cracked the code for processing its ore, with recent metallurgical results delivering a 12:1 upgrade ratio, preconcentrating the ore to 3.5% TREO, a 200% improvement, using a low-cost, conventional dense medium separation process.

It should reduce capex and opex in any development.

ARR has A$6.3 million in cash and investments and is finalising a scoping study.

Market turning

It comes at a time when some analysts believe pricing for REEs has bottomed out, and are due for a recovery as China is expected to pull back on expanding output quotas as pricing has reached production cost levels, according to a recent report from Shanghai Metals Market's Yang Jiawen.

Some REEs may even slip into deficit this year.

The non-China market is dominated by ASX-listed Lynas Rare Earths and Las Vegas-based MP Materials, with merger talks between the pair reportedly stalling this week.

MP operates the Mountain Pass mine in California, but processes its ore in China at a facility controlled by one of its biggest shareholders, Shenghe Resources.

China has banned the export of rare earth extraction and separation technologies and threatened to cut off the supply of REEs to the US and its allies.

The IRA cannot be used to fund projects where Chinese companies have a significant investment.

If MP can get a domestic refining business going, no small feat given the technical challenges, ARR will look very attractive if MP wants to bulk up its US business.

Rare earths are vital not only for renewable technologies but also for modern weapon systems.

ARR shares were up 8% today at 14c, capitalising the company at $62 million.

The stock has traded between 11.5-28.5c over the past year.