Please describe Northern Minerals to readers less familiar with your company.
Northern Minerals Limited (ASX: NTU), listed on the ASX in 2006, is focussed on becoming a globally significant producer of the heavy rare earth (HRE), dysprosium. The company has a large landholding in Western Australia and the Northern Territory that is highly prospective for this element. Northern Minerals’ 100% owned flagship property is the Browns Range Project. This project has a number of deposits and prospects containing high value dysprosium and other HREs, hosted in xenotime mineralization. Dysprosium is an essential ingredient in the production of neodymium iron-boron magnets used in clean energy and high technology solutions. The Project’s xenotime mineralization facilitates the use of a relatively simple and cost effective processing flowsheet to produce a high grade dysprosium rich mixed rare earth oxide. The Company is targeting construction to commence in April, 2015, followed by initial production in Q3 2016.
On October 15th Northern Minerals released 2 press releases. Could you please summarize those lengthy news items?
The first press release entitled “Further increase in Browns Range Mineral Resource” highlighted the fact that we upgraded our resource statement by a relatively small amount. We now have 52.4 million kg of TREO in the Indicated and Inferred categories. But, more important is the fact that of 13 targets drilled, 6 now have JORC compliant resources on them. Moving from exploration to an actual JORC resource is not easy, in fact it’s quite rare in the world of mining. We have had a great strike rate. Our resource size increases have been limited more by funding then by exploration success. The second press release entitled, “Further Discoveries Reinforce Exploration Potential at Browns Range” deals more with potential then with fact. It describes the substantial potential of the land package we have, that potential is truly enormous. For example, significant drill intersections were achieved from first pass drilling of two new prospects and significant opportunity exists to expand the current six deposits.
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How globally significant is Browns Range?
As a result of increasing global demand for magnet applications, dysprosium supply is critical and therefore globally significant. Most projects in development are dominated by light REEs. There are relatively few HREs outside of China. Browns Range is a dysprosium story. Eventually, we could reach 15% of global supply of dysprosium. Our biggest output will be yttrium. We will need to balance our production of dysprosium and yttrium so that we don’t flood the market with yttrium. Said another way, we could produce even more dysprosium if not for the excess yttrium that would entail. Terbium is relevant, but it’s 1.2% of the mix of REEs. Even though we will produce only about 30k-50k kg per year of Terbium, it will be our 2nd largest economic contributor. To reiterate, dysprosium is the main story here, the centerpiece.
What are the main uses for dysprosium? Which end markets are growing fastest?
One needs look no further than magnets, as I mentioned before. Magnets are expected to grow by a CAGR of 8%-12% a year. Electric vehicles are also a big user of dysprosium as are wind turbines. To be clear, not all magnets have dysprosium in them, but that’s still the biggest market for dysprosium. There’s an enormous push for electric vehicles in China, some predict there could be 5 million there by 2020. It doesn’t take a whole lot of dysprosium in an electric vehicle to add up to a great need for that element. The entire dysprosium market is just 1.8mm kgs, per year.
The importance of dysprosium to the project is clear, what about yttrium? Are there other important contributors to project economics?
As mentioned, we don’t want to flood mar
NTU Price at posting:
30.0¢ Sentiment: Buy Disclosure: Held
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