Northern Uranium expands strategic rare earth interests

Northern Uranium (ASX: NTU) has signed a Heads of Agreement (HOA) with private company Arnhem Resources Pty Ltd, which will provide the exclusive right to purchase Arnhem’s John Galt HREE project.

The John Galt Project is located in the Kimberley region of Western Australia about 28km south of Turkey Creek and 35km from the Great Northern Highway. It covers an area of 65km² within tenement application E80/4298 held by Arnhem.

Northern Uranium Managing Director George Bauk said the HOA represented a strategic expansion of the company’s rare earth interests, following the recent discovery of high value HREE at the 100% owned Browns Range project.

“The John Galt project has similar geological characteristics and similar indications of high value rare earth elements in xenotime mineralisation,” Bauk said.

“We are excited by the potential of our rare earth projects, particularly given the high value and the strong demand and price environment for these types of products. The HREE projects are complementary to our uranium development program, and provide another avenue for value for our shareholders,” he said.

Bauk said the company expected to undertake some initial exploration work at the John Galt project as part of its 2010 exploration program after due diligence is completed.

“Following the positive results from Browns Range and our analysis of the rare earths market last year, we intend dedicating HREE exploration activities in 2010, in conjunction with our core uranium exploration program,” Bauk said.

According to historical reports, rock chip sampling of two under explored mineralised zones at the John Galt Prospect returned assays between 4.5% and 17.8% Total Rare Earth Oxides (TREO).

Northern Uranium has recently completed a successful rights issue raising $3.2m before costs.

These funds will be applied to a drilling program at the Gardner-Tanami Project and Gardner JV Project, following on from successful 2009 results and exploration activities on the HREE projects at Browns Range and John Galt.

http://www.proactiveinvestors.com.au/companies/news/6332/northern-uranium-expands-strategic-rare-earth-interests-6332.html