Very positive announcement from Tantalum. Sounds like money for nothing.
Al Baby (A long suffering shareholder)
TANTALUM AUSTRALIA NL 2003-03-21 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ HIGHLIGHTS
* Agreement reached to acquire the prospective Gascoyne tantalum/niobium project
* Joint venture negotiated to acquire up to a 78% interest in a major rare metal (tantalum/niobium/yttrium) resource at the Brockman project in the Kimberley
* Based on current world market prices for tantalum, niobium and yttrium oxides in concentrate the open pitable resource has an in ground value in excess of $750 million.
* Offtake agreement reached with a European refiner with respect to columbite concentrate from Gascoyne. Columbite and tantalite are end members of the same mineral species. Columbite is the niobium rich end member and is a major source of the worlds tantalum raw material supply. Tantalum Australia has received several enquiries from potential customers for supply of columbite rich concentrates.
Tantalum Australia NL ("TAA") is pleased to announce agreements have been reached for the acquisition of two tantalum/niobium projects in the Gascoyne and Kimberley regions of Western Australia. In addition the company has executed a supply contract with a European rare metal refiner to off take the concentrate produced from the Gascoyne project. These acquisitions are consistent with the company's objective of building a world class resource base of tantalum and associated rare metal resources in response to potential customer/strategic partner requirements.
GASCOYNE PROJECT
BACKGROUND
The Gascoyne project covers an area of 400 square kilometres and is located about 120 kilometres north northeast of Gascoyne Junction in the Gascoyne Mineral Field of Western Australia. The project tenements include two granted mining leases of 3 square kilometres and three exploration licences totalling about 400 square kilometres. Historically tantalum and niobium have been produced from several localities in the region the most significant being from the Arthur River and Nardoo Well/Morrissey Hill areas. Significant production of mica has also been recovered from underground mines at the Mica King and Mica Queen.
RESOURCE
Tantalite has been produced predominantly from alluvial/eluvial sources; however a large swarm of rare metal pegmatites stretches in an east west arc across the area for a strike length of about 60 kilometres. Niobium rich columbite has been produced from a kaolinised pegmatite at Arthur River and will be the focus of early bulk sampling and exploration of the project as this product is in significant demand. The only other sources in the world of this product are Brazil and Nigeria. Customers requiring this product have indicated that they are looking for new stable sources of supply.
TAA will install a 50 tonne per hour jig plant at Arthur River at an estimated cost of $300,000 during April to assess the production potential for columbite and alluvial tantalite. The components for this plant have been sourced from the parts of the circuit at Dalgaranga that are no longer required for the recovery of the fine grained tantalite found in the Niobe deposit. Rare Resources NL ( the current owners of the property) have all the necessary statutory approvals and bonds in place for an initial 50,000 tonne mining/ production campaign, meaning, production can be commenced by the end of April 2003.
Trench sampling at the Arthur River prospect of alluvial/eluvial targets and an outcropping kaolinised pegmatite has identified potential resources of 40,000bcm at 150 to 200ppm Ta2O5 and 150,000 to 200,000 tonnes at 2000ppm Nb2O5 respectively. Both targets will be evaluated by the sampling programme described above.
ACQUISITION
The terms of the acquisition involve TAA completing a takeover of the tenement holder Rare Resources NL ("Rare") by issuing about 3 million shares in return for 100% of Rare. The offer will be conditional on 100% acceptance by Rare shareholders; if TAA is unable to reach 100% Rare will effect a direct sale of the tenements to TAA in return for the shares. In addition, TAA will pay to Rare on production and sale of 20,000 lbs Ta2O5 $300,000 in cash or as an equivalent issue of shares (at the option of TAA) based on the prevailing TAA share price. A second payment on identical terms to the first will be due on production and sale of cumulate 50,000 lbs Ta2O5 or equivalent.
BROCKMAN PROJECT
Brockman JV Tantalum Australia (TAA) & Aztec Resources (AZR)
BACKGROUND
The Brockman project is situated in the east Kimberley district approximately 18km southeast of Halls Creek and covers 20 square kilometres held by Aztec Resources Ltd. The Duncan Highway is a graded gravel road extending from Halls Creek and passes within 5km of the target area of the project.
This project, discovered in the early 1980s, was subjected to intense exploration and metallurgical testing in an attempt to rapidly exploit its zirconium and rare earth resources. The presence of niobium and tantalum was known from early stages of exploration but has never been the focus of any development. All the zirconium, Rare Earth Elements (REE) and niobium minerals occur in a zone of a discrete trachytic tuff unit that is termed the "Niobium Tuff". Whilst extending through 3.5km of strike the stratigraphic unit is locally thickened from which zones the reported resources of 4.3 million tonnes derive and is weathered to 30 metres depth. The unit crops-out well and, from drilling, appears to dip approximately 60deg easterly.
RESOURCE
This world class project comprises measured indicated and inferred resources (non JORC) of approximately 50 million tonnes at 4,400ppm Nb2O5, 270ppm Ta2O5, 1240ppm Y2O3, 110ppm Ga, 350ppm HfO2, 900ppm REE and 1.03% ZrO2. Open pitable resources (non JORC) to 70 metres depth were estimated to be 4.29 million tonnes at average grades of 270ppm Ta2O5 is and 4,400ppm Nb2O5 with an estimated stripping ratio of 4:1. The resource is open along strike and at depth. Based on current world market prices for tantalum, niobium and yttrium oxides in concentrate the open pitable resource has an in ground value of $750 million. This value does not include the REE and Zirconia.
The project has been modelled as a REE resource with little attention paid to the production of niobium and tantalum, except where these elements may be used to add revenue to the total resource. That is, specific attention to the preferential extraction of the rare metals (eg tantalum, niobium and yttrium) does not appear to have been a priority. CSIRO was engaged to develop a system for the extraction of REE and specific elements such as zirconium and yttrium. This system involved sulphation, water leaching and solvent extraction and resulted in recoveries of about 65% Nb2O5 and 8% Ta2O5.
METALLURGY
TAA will focus on metallurgical test work followed by a feasibility study into production of a mineral concentrate for sale to refiners that maximises recovery of niobium and tantalum from the oxide section of the deposit. The test work will pursue simple gravity recovery and will be undertaken at TAA's metallurgical facility at Balcatta.
Columbite being the major niobium/tantalum bearing mineral in this deposit is a great advantage as it is the preferred feedstock mineral for many refiners and can be separated from the other mineral species by gravity and wet magnetic separation.
TAA REFINING PROCESS
The potential application of TAA's new refining process, the subject of an R&D programme with Boston University (as previously announced), to the concentrates produced from Brockman will be assessed as part of the metallurgical evaluation programme to potentially optimise recovery of rare metals from the deposit.
JOINT VENTURE
The terms of the farm in give TAA the right to earn 60% by the expenditure of $1,500,000 within three years and a total of 78% by the expenditure of an additional $2,000,000 within five years. TAA can withdraw at any time after the expenditure of $150,000 within the first year and if it elects to earn 78% will fund the next $2,500,000 of expenditure to be repaid out of 100% of the profits derived from future production from the project.
SALES CONTRACT
TAA has executed a contact with a European refiner for the supply, subject to TAA board approval, of 60 tonnes of columbite concentrates (containing 50% Nb2O5 and 5% Ta2O5) from the Gascoyne project. This contract will consume all the concentrates produced during the initial three month evaluation phase of the project and includes a provision for extension once evaluation of the future production potential has been completed. If the contract is extended it would have a yearly value of at least $1.25 million without any increase in monthly volumes, however the customer has indicated the volumes required my increase by up to 300% subject to quality and availability.
TAA has received several approaches from overseas refiners who require supply of the columbite product similar to that found at the Gascoyne project. The world market for Niobium is in excess of 60 million pounds contained Nb2O5 per annum and has been more stable and consistent than the market for tantalum over the last 12 months. Given the size of the Brockman resource TAA is actively pursuing additional customers who have already approached the company looking for supply of niobium concentrates in particular.
DALGARANGA PROJECT UPDATE
Future operations will focus on processing feed from the Niobe deposit whilst this deposit is higher grade than the Dalgaranga deposit the mineralisation is finer grained and will require only the spiral and table section of the existing treatment plant. The coarse recovery jig circuit will not be require and has been removed and transported to the companies Balcatta facility for reconfiguration into the bulk sampling plant to be used at the Gascoyne project and possibly at the Binneringie project. This effectively creates two recovery plants from the existing circuit and will allow simultaneous operation of Dalgaranga and Gascoyne if necessary. Production at Dalgaranga has been halted during this reconfiguration.
For further information contact Michael Fotios.
P Farrah COMPANY SECRETARY
TAA Price at posting:
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