Quantum Rare Earth's Elk Creek draws interest from several potential partners

Looking ahead, Quantum Rare Earth Developments Corp’s  (CVE:QRE) (OTCQX:QREDF) president Peter Dickie is "greatly encouraged", after last week's significant increase in resources at the company’s Elk Creek niobium rare earth element project in southeastern Nebraska.
Earlier this month, the company released an updated NI 43-101 compliant estimate for the project, which was prepared by Tetra Tech Wardrop, adding an indicated resource.
The new report added a higher grade indicated resource of 19.3 million tonnes grading 0.67% niobium (Nb2O5), at a 0.4% niobium cut-off grade, for 129,182 contained niobium oxide tonnes.
Meanwhile, inferred resources increased from 80.1 million tonnes grading 0.62% niobium in the last estimate in April 2011 to 83.3 million tonnes grading 0.63% niobium for 523,844 tonnes of contained niobium oxide.
Dickie says the company's future plan is to focus on completing the metallurgy work for the property - a multi-month process that commenced late in 2011.  The metallurgy work will unveil not only recovery rates, but also optimal processing methods to achieve these rates, Dickie says.
The metallurgical test program is on-going, and is based on composite samples of drill core obtained from last year. This work is being conducted at the Hazen Research facility in Golden, Colorado.
The Elk Creek Carbonatite is the only primary niobium deposit known to be under development in the U.S., and the highest grade undeveloped niobium deposit in North America, said Quantum. It is an oval shaped magnetic and gravity anomaly about seven kilometres in diameter.
Niobium is mainly used in the form of ferro-niobium to produce HSLA (High Strength, Low Alloy) steel for use in automotive, structural and pipeline industries.  The market for ferro-niobium has grown an average of 10% per year for the past decade, and is forecast to continue that growth pattern in the coming years.
Currently, the U.S. imports 100 percent of its niobium needs. Niobium, which is listed as a strategic metal, is being considered for national stockpiling not only in the U.S., but also in China and several European countries.
Dickie says that the project has prompted discussions with several potential partners, with a drill program aimed at expanding and upgrading the resource classification expected to start immediately should one of these partnerships come to fruition.
"From a shareholder and dilution point of view, development of the project will be best achieved with a partnership, with several parties now kicking the tires and looking at data," says the company's president.
"Very big dominant players in the market, such as CBMM in Brazil, and Niobec (Iamgold) in Canada are greatly expanding their niobium production capacity indicating they are confident in the market going forward," says Dickie.
Based on projected growth patterns current producers are forecasting, the possibility of a niobium shortage by the end of the decade is real,  opening the door for other players.
"There are very few primary niobium deposits currently being developed.  With our combination of grade, tonnage and location, I certainly think our project is head and shoulders above the rest," adds Dickie.
The full NI 43-101 report for the property is due in the next month, in which Dickie expects a recommended first and second phase drill program aimed at increasing both the indicated and inferred resource base, and expanding on the higher grade portions of the deposit.  The start of a  preliminary economic assessment report for the project, which will use findings from the updated resource report, is awaiting metallurgy results.
The company said the recent resource update was the result of an additional three holes completed in 2011 at the Elk Creek niobium deposit, which is an elongated, east-west orientated mineral occurrence in excess of 800 metres along strike.  The deposit remains open to the east, west and at depth, and is hosted by the Elk Creek Carbonatite - an intrusive complex of carbonatite and related rocks.
Dickie says the company has received interest from a variety of institutions due to the unique size and nature of the deposit, with research work underway at the University of Nebraska and the University of Colorado, and with additional studies being done by the USGS.
Elk Creek was originally developed during the 1970s and 1980s, when Molycorp (NYSE:MCP) completed over 150,000 feet of drilling. Quantum Rare Earths secured the project in May of 2010, and immediately completed a compilation and digitization of all historic data.
Some recent drill results from the site include hole NEC11-001, which returned 0.73 percent of niobium (Nb2O5) over 235.22 metres, including 54 metres of 1.17 percent.