Kimberley Rare Earths nears start of exploration at Malilongue after earning 40% interest

Kimberley Rare Earths (ASX: KRE) has reached the significant milestone of acquiring a 40% interest in the Malilongue heavy rare earths project in northwest Mozambique after recently completing due diligence on the project.

Malilongue is a pegmatite hosted rare earths project which hosts major exploration potential, including for xenotime-hosted yttrium, dysprosium and erbium.

Previous pegmatite grab samples assaying over 20% total rare earth oxides show the highly prospective nature of the project.

Under the farm-in agreement made with Great Western Mining, a gemstone mining company incorporated in Mozambique, Kimberley Rare Earths can earn up to a 90% interest in the Malilongue project.

To satisfy the acquisition of the initial 40% interest, Kimberley Rare Earths will pay Great Western a further A$250,000, taking total payments to $300,000, as well as issue 1 million shares at the five day volume weighted average price prior to issue and 750,000 options exercisable at $0.30 each within four years from six months after the date of issue.

Additional consideration comprises a cumulative $4 million payment over five years to earn up to 80%, with a right to increase to 90% by sole funding to production.

Kimberley Rare Earths will begin exploration immediately with the re-processing of geophysical and Landsat data to define suitable exploration targets for follow-up.

Weather permitting, field activities including geological mapping, rock chip sampling and stream sediment sampling will begin in the March quarter of 2012.


Impressive historical data

No doubt attracting Kimberley Rare Earths to the Mozambique domiciled project is the historical data, which includes rock chip samples assaying over 20% TREO.

Added to this is concentrates from 38 separate pits located throughout the pegmatite field sampled by the current owner, which have averaged over 1000ppm TREO with 55% being LREO, 25% HREO and 20% yttrium oxide.

A sample extracted from the eluvial beds was subjected to mineralogical examination by a scanning electron microscope and found to comprise major xenotime and minor monazite and zircon.

In addition to yttrium, the xenotime shows appreciable dysprosium and erbium.


Strategic project location

Malilongue is located in western Mozambique about 300 kilometres west of the regional mining centre of Tete, and comprises two tenements, Mining Concession 1133C and Prospecting License 1583L.

Another plus for the project is good access with grid hydroelectric power, with mobile phone coverage located 50 kilometres to the east.

Great Western has established some basic infrastructure within the mining concession including a secure office, accommodation, workshop complex and has fully operational earth moving, haulage and treatment facilities associated with its gemstone operation.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23290/kimberley-rare-earths-nears-start-of-exploration-at-malilongue-after-earning-40-interest--23290.html