rare earths .. alk under the radar

http://www.resourceinvestor.com/pebble.asp?relid=36382

9 October

Artilce in part reads...


Rare Earth Hopeful Sees Promising Signs

The flip-side of the REE market's current fundamentals is that the situation may prove a fillip for companies looking to bring non-Chinese REE production online in the near future.

One outfit hoping to become a rare earth producer, the multi-commodity junior Alkane Resources is sitting on a zirconium-niobium deposit that also contains REEs. The project, named Dubbo after a nearby town, is located in the eastern Australian state of New South Wales. The company worked up the project from scratch after latching onto tenements previously picked over by other companies looking for other commodities. The company also holds a gold project in the same region.

To date, Alkane has seemingly flown in under the radar as far as REEs are concerned.

A bankable feasibility was already in swing at the Dubbo project to assess a $180 million capex operation involving annual ore throughput of 200,000 to 500,000 tonnes. A development decision would probably be made towards the end of 2008.

The project's Toongi deposit had a measured resource grading at 0.745% total rare earth oxides, which would see about 1,500 tonnes of oxides produced each year if the lower end of the ore throughput range were selected or about 3,700 tonnes for the upper end of the range. The main products at Dubbo would be zirconium and niobium oxide, with concurrent production of additional, smaller amounts of hafnium, tantalum, uranium, yttrium and rare earth oxides.

The company had no plans to work on shifting the deposit's inferred resource to a higher confidence category as part of the BFS because the measured resource stood at 35.7 million tonnes, sufficient to support a mine life of around 100-200 years depending on annual ore throughputs.

According to company managing director Ian Chalmers, the company anticipated beginning a demonstration-scale pilot plant at a scientific research facility in Sydney in late October or early November.

"Obviously it proves the [processing] flow sheet, but also we're going to get substantial amounts of product off it," Chalmers told RI.

"We'll distribute that product around the world to various end users and get feedback from them, the idea being that on the back of that we can start getting some real, hard revenue numbers."

He said revenue-related data obtained by about the middle of next year would go into the Dubbo BFS.

According to Chalmers, potential buyers already making contact with Alkane have largely been Japanese companies, although some European companies have approached the company as well.

"They really have been particularly interested in our heavy rare earth distribution. In other words, things like dysprosium and terbium and erbium."

He said the global market adjustments that China's policies were sparking had been a major force in prompting those potential customers to seek early contact with Alkane.

"You've got the Japanese end-users and European end-users suddenly saying 'Hang on, we've got to look very closely at every other potential rare earth supply around the world.' And for these guys to come to us - I take that as a real positive, because they have obviously tracked back, gone through the public domain, found that Alkane is a potential rare-earth producer, and made the effort to come and see us."

At the time of writing, Alkane Resources shares last traded at A$0.29 on the Australian Securities Exchange.