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
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
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
"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
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
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.