Geomega Resources completes phase 2 drilling, initiates PEA work and secures $1.5 mln loan

Geomega Resources (CVE:GMA) reported Monday the completion of phase 2 drilling on its Montviel rare earths project near Lebel-sur-Quevillon, Quebec.
The rare earths miner also hired Golder Associates to perform an array of tests needed for the preliminary economic assessment for its Montviel project.
Golder will carry out hydrogeological, geotechnical, geomechanical as well as geochemical tests for the technical report. The mining services firm sees a potential three mining scenarios at the project, open pit, underground mining or a combination of both.
Golder will evaluate soil mechanical properties in the potential pit area, assess conceptual pit design parameters, as well as conduct tests to determine hydraulic conductivity in both overburden and rock, down to a depth of 200 metres.
Conclusions of these tests are scheduled for the third-quarter this year.
In addition, the company said its phase 2 drill program – which wraps up this week – totalled 24,234 metres over 50 holes.
Geomega said a cumulative phase 1 and phase 2 program of 35,050 metres has been finished in the ferro- carbonatite core zone at Montviel, covering a strike area of 750 metres to a vertical depth of 775 metres.
The company noted assay results for the remaining 25 holes are pending.
The impetus of the program was to identify a high grade zone, with grades closer to 2% total rare earth oxide, and to increase confidence in the core zone resource, which the company said it achieved.
The miner said its final NI 43-101 compliant resource calculation for the Montviel core zone is slated to be finished in July 2012.
Last week, Geomega said it was granted a $1.5 million loan by Sidex  – which it plans to use for general and administrative purposes.
The loan, which must be repaid on December 31, 2013 or upon the receipt of certain tax credits, has an annual interest rate of eight percent.
In connection with the loan, the company also issued 400,000 non-transferable purchase share warrants to Sidex, priced at $1.25 each for 12-months.
Last month, the rare earths miner unveiled phase two drilling results for its Montviel niobium project.
Highlights from the southwest portion of the core zone included 2.08 percent total rare earth oxides (TREO) and 0.22 percent niobium oxide (Nb2O5) over 245.9 metres from 52.6 metres in hole MVL-11-32D, including 3.28 percent TREO and 0.25 percent Nb2O5 over 31.5 metres from 174 metres and 2.59 percent TREO and 0.55 percent Nb2O5 over 19.5 metres from 219 metres.
The Montviel rare earth niobium project is 45 kilometres west of the Cree First Nation of Waswanipi and 100 kilometres north of Lebel-sur-Quevillon.
Montviel, one of the largest total rare earth oxide resources outside of China, has the potential for a major near term role in the growing magnet sector due to its proximity to infrastructure and labour.