Our North American critical minerals Investment,Megado Minerals (ASX: MEG)said its permitting efforts for a maiden drill program at its US rare earths project are progressing well today, with an outcome from the application expected in Q1 2024.
We’re looking forward to a drill program at the North Fork rare earth project - in large part to its already demonstrated prospectivity.
The project which sits on the Idaho/Montana border has returned some of the highest grade rare earth rock chip samples ever seen in the US.
With a drill permit on schedule for Q1 2024, MEG could be drilling in a few short months.
MEG will be focussing on drilling out up to 1km of strike at the Silver King prospect where the company has encountered its best rare earths samples:
Previously, trenching at the project returned 2.0m @ 10.31% TREO; 2.0m @ 5.80% TREO; and 1.52m @ 17.70% TREO and rock chip samples returned up to 15.85% TREE (including 2.79% NdPr).
That’s a strong NdPr ratio from carbonatite hosted mineralisation - Neodymium (Nd) and Praseodymium (Pr) are essential for the manufacture of permanent magnets found in EVs and wind turbines.
These two critical minerals are expected to experience strong demand growth through to 2040.
Meanwhile, carbonatite structures are responsible for some of the world’s most geologically fertile rare earths deposits -including Australia’s Mt Weld deposit which is owned by Lynas.
Lynas has recently attracted funding from the US governmentas it is the only major ex-China source of rare earths.
In addition to this support - a recently proposed bit of US legislation, the ‘Rare Earth Magnet Manufacturing Production Tax Credit Act of 2023’, would provide a US$20 per kilogram credit for NdFeB magnets made in the U.S., with the credit growing to US$30 per kilogram for magnets made with rare earths sourced from U.S. mine.
If passed, we expect this legislation to provide powerful incentives for US rare earths exploration, development and ultimately, production.
This legislation comes at a time where the US is increasingly throwing its financial muscle behind improving its supply chain security for critical minerals - we’re hoping that MEG can prove out a major US rare earths deposit with drilling in the coming quarters.
As further evidence of the increasing momentum for US based rare earths processing, a company which owns a rare earths project nearby to MEG’s US groundsigned a deal with the Idaho National Laboratory to explore new methods of processing rare earthsa week ago:
In short, we think the macro tailwinds for MEG’s rare earths project are growing stronger by the day, so it's a good time to start drilling.
What’s next for MEG?
Drilling commenced at US rare earths project
Today’s announcement outlined a permit application 6-8 drillholes for a total of 1,500m with some flexibility built in to the permit with an outcome of the application expected in Q1 of next year.
Ground truthing at James Bay lithium project
MEG also said that it would pursue ground truthing at its Cyclone lithium project in Canada in H1 2024, with 70% of the project unexplored.
For now, we see MEG’s primary focus as being on the US rare earths project - the company also noted it is on the lookout for more critical minerals projects in a range of jurisdictions.
