eye-catching high-class rare earths!

May 19, 2011

Rare Earths Have Pulled Territory Uranium Out Of Its Tailspin And Brought Investors Flocking Back In
By Our Man in Oz



For a few glorious days in early 2007 a small uranium explorer was the talk of the Australian stock market. Territory Uranium had picked the perfect time to list as uranium was sky-high at US$135 per pound. That uranium price helped the shares to deliver a 190 per cent profit for stags who sold on float day as the shares zoomed up from A20 cents to A58 cents. After that spectacular start events took a different turn. The uranium price collapsed. The world plummeted into its post-Lehmann Brothers funk, and Territory?s share price headed for the cellar, bottoming at A2.5 cents in early 2009.
Times change, and so has Territory. A new management broom has swept through the company, and while exploration for uranium in the Northern Territory remains a work in progress, the real drive behind recent interest in the shares is what looks to be a high-class rare earths discovery. And so, from being classified as a genuine penny dreadful, Territory has rebounded to trade at around A22 cents, and did get as high as A49 cents in early March as reports of drilling success at its flagship Quantum project were absorbed by investors.

First rare earths intersections at Quantum, which is located near the historic mining centre of Pine Creek in the NT, were reported in October last year. These included an eye-catching one metre thick zone assaying 9.67% total rare earth oxides (TREE). Other results included 8.33 metres at 1.76 per cent TREE, and 12 metres at 3.76 per cent TREE. All assays came from relatively deep sections, around 250 metres down the discovery holes.

?It certainly got our drilling campaign off to a flying start?, said Territory chief executive Ian Bamborough when Minesite caught up with him over a cuppa in Perth. ?Ongoing drilling has continued to reveal high grade extensions of rare earth mineralisation along strike and in previously untested areas.? The best drill result from the most recent work is a 9.2 metre section assaying 3.78 per cent TREE.

Much more work is required at Quantum but early analysis indicates that the company has intersected the nose of a classic ?roll front? structure. This type of structure is created when mineralised groundwater hits an impermeable rock, and splays out in a crescent shape. Some of the world?s biggest uranium deposits have been laid down as roll front structures. But at Quantum the minerals in the groundwater during the deposition phase were rare earths, including rich concentrations of some of the most valuable of that odd family of elements, neodymium, dysprosium and praseodymium.

In his March quarter report Bamborough indicated that further drilling is planned to target higher-grade zones along the strike of the discovery area. There will also be a separate drilling programme on the nearby Quantum uranium prospect where recent intersections included half-a-metre at 4,224 parts per million uranium. ?Fault and fold structures identified from airborne magnetic and radiometric interpretation indicate that the mineralised system has a plus-four kilometre strike length, providing a further dimension in relation to the exploration potential of the Quantum system?, he said. De-coded from geological mumbo-jumbo, Bamborough is saying that the discovery could get bigger in several directions.

Valuing a rare earth discovery is the devil?s own job, because of the complications of so many minerals in the family, the complexity of separating them, and the enormous demand and price differences involved. In the case of Quantum there?s also a question mark over the challenging depth of the orebody. It?s perhaps because of those reasons that Territory?s share price has contracted back from its March A49 cents high to trade around A22 cents. That, plus the problem of having the word ?Uranium? in its name at the time of the Japanese earthquake and tsunami.

However, as the uranium debate settles, and investors get a look at the ongoing assay flow from Territory?s rare earths work, a greater understanding of the company will develop. At its current share price Territory is capitalised at a very lowly A$30 million, a fair whack of which is supported by the A$8 million it has in the bank. The company has a busy drilling campaign planned for the rest of the year, and that should ensure sufficient news flow to attract increased investor attention.


http://www.minesite.com/nc/aus/minews/singlenews/article/rare-earths-have-pulled-territory-uranium-out-of-its-tailspin-and-brought-investors-flocking-back-in/1.h