Emerging developers: Who’s chasing an upgrade from explorer to developer?

Emerging developers: Who’s chasing an upgrade from explorer to developer?

• Junior companies are looking to move into development status
• Resource updates and scoping studies are the first step on the path
• These companies have updates coming late 2024 or early 2025

Junior resource companies are leveraged to news from their projects, whether that comes in the form of an update to a mineral resource or releasing a scoping study.

These kinds of updates could deliver real growth to a company’s share price. But more than that, it’s about proving up a project.

The first step is defining an inferred or indicated resource (indicated being of higher confidence) which shows your project could actually host some decent mineralisation.

Next comes the scoping study, which is basically looking at the project’s economic viability, capital costs, life-of-mine sustaining capital and cashflow as well as details on processing and production rates of the ore based on assumed commodity prices.

That’s a stepping stone that justifies the move towards a pre-feasibility Study (PFS) which assesses the project’s feasibility (it’s in the name) with a more detailed financial analysis and whether all or part of the resources can be classified as an ore reserve.

Then further down the lines there’s the definitive feasibility study and bankable feasibility study, but that’s a more detailed story for another day.

Today, we’re looking to juniors who are toeing the line into emerging development territory.

Essentially those companies who are announcing resources, scoping studies and even a PFS for their projects – meaning they’re on the cusp of something potentially profitable and mineable.

One such company * spoke to is Brazilian Critical Minerals (ASX:BCM) who are looking to release a scoping study for the Ema rare earths project in Brazil in Q1 2025.

In April of this year the company put out a resource estimate of 1.02Bt at 793ppm total rare earth oxides (TREO). Current drilling is expected to wrap up by the end of the month, with results to date including up to 1,149ppm TREO.

These results will be included in an interim updated resource estimate that will underpin the study, and the results already received will allow the company to commence production and plant feed scheduling for the scoping study, as well as enable the pre-planning and in-situ field trials as part of a feasibility study scheduled for 2025.

Highlighting low capex processing route

Managing director Andrew Reid says the fully ionic rare earth clay-hosted deposit’s distinguishing factor is that the physical and chemical characteristics of the ore body are very similar – if not exactly the same – as a lot of the large Chinese deposits.

“That’s quite a distinguishing factor because about 30-40% of the world’s rare earths come out of China, Myanmar, South East Asia where they use in-situ recovery extraction processes,” he said.

“We have one of the few deposits, probably the only deposit that I know of, that’s similar to the Chinese outside of China, where we can apply this technology.

“That’s the route that we’re going down at the moment.

“It’s certainly much lower cost in terms of capital requirements and the operating costs to run the plant – once it gets up and running.

“They are the two big pieces of work that are coming out of the scoping study which will be completed over the next few weeks.”

The pros of in-situ recovery include the minimal disturbance compared to traditional mining methods, there’s no tailings dam or big dusty mining gear – plus BCM has a ‘green’ reagent, which means the leaching at the drill site will also be much more environmentally friendly.

“We’ve also been able to leach the same benign green reagents right through the process part so we’ve got this really environmentally friendly mining method,” Reid said.

“It’s certainly one of the greenest mines of any commodity that’s ever started up.”

Where will BCM fit into the market?

One of the key elements of a scoping study is also highlighting where the project sits in the current market, particularly around commodity pricing and supply/demand forecasts.

Reid says it’s a tricky sector to get across, as there are virtually no rare earths available outside of China, Myanmar and Malaysia – and all of their product gets sucked back in to China.

“There are lots of projects and lots of companies trying to get up and running but no one is even close to being able to push the button at the moment,” he said.

“There are a variety of reasons, cost is a big one with rare earth prices at the moment being quite low.

“The capital hurdles for some of these projects are astronomical and next to impossible to finance in the current environment and/or they’ve got metallurgical challenges.

“But we tick all the boxes. We’ve got good metallurgy and we have the opportunity to create one of, if not the lowest, capital requirement rare projects in the world with very low operating costs and we are certainly aiming to have a project that can return a profit under the current pricing regime – which is quite low.”

“We’re the only company on the ASX that’s talking about doing anything like this in the rare earths space.

“There is not a single other project outside of China, Malaysia and Myanmar that can lay claim to that right now.

“Given that there’s very little supply outside of China, if we can get this project up and running in a short amount of time I think we will be very attractive in the market and we are certainly going places.”

https://st*ckhead.com.au/resources/emerging-developers-whos-chasing-an-upgrade-from-explorer-to-developer/