Wednesday, 23 May 2012

Geomega phase 2 drill results reveal "bonus" niobium enrichment at Montviel

Geomega Resources (CVE:GMA) Wednesday announced results of diamond drill hole MVL-12-59B at its Montviel rare earths-niobium project near Level-sur-Quévillon, Québec, which included a “bonus” enrichment zone of niobium oxide (Nb2O5).
The company said highlights from hole MVL-12-59B, which completed phase 2 drilling, included 2.06 percent total rare earth oxides (TREO) and 1.38 percent Nb2O5 over 95.5 metres from 334.5 metres; and 2.42 percent TREO and 3.08 percent Nb2O5 over 29.6 metres from 351.4 metres.
Geomega noted that hole MVL-12-59B intersected silico-carbonatite (host rock) at the start of drilling (from 0 to 318 metres) and then intersected ferro-carbonatite from 318 to 501 metres.
Additional results from the remaining phase 2 assays, which include over 15,569 metres in 35 diamond drill holes, will be released once check assays have been completed, said the company.
"The technical team accurately predicted the location of the rare earths enrichment zone in preparing phase 2 drilling," said CEO Simon Britt.
"The enrichment in niobium is a bonus. The enrichment zone niobium grade compares favorably to the average grade mined at Niobec (Iamgold), the only niobium producing mine outside Brazil, also in Quebec.
"Following excellent preliminary results on the recovery of pyrochlore, the niobium bearing mineral, the preliminary economic assessment (PEA) study will include a niobium oxide concentrate by-product."
Geomega said that hole MVL-12-59B is corralled approximately 170 metres and 60 metres south-east of holes MVL-11-32D and MVL-11-34 respectively, on section 6+80 West.
Highlights from those drill holes, previously released in February, included 2.59 percent TREO and 0.55 percent Nb2O5 over 19.5 metres from 219 metres in hole MVL-11-32D; and 3.09 percent TREO and 0.60 percent Nb2O5 over 46.5 metres from 318 metres in hole MVL-11-34.
Niobium is used for making high strength, low alloy steels, specifically used in manufacturing green technologies, turbines, aerospace, automobiles, oil and gas.
According to Geomega, global annual consumption of ferro-niobium is approximately 90 million kilograms per year, and is growing at an annual rate of five to seven percent.
The long term forecasted price of ferro-niobium is US$45/kilogram, said the company, adding that there are three producers worldwide, which include CBMM and Anglo American (LON:AAL) in Brazil, and Iamgold (TSE:IMG) (NYSE:IAG) in Canada.
The Montviel project is located approximately 100 kilometres north of Lebel-sur-Quévillon in the southern, developed, part of Quebec's "Plan Nord", an $80 billion economic, social and environmental development plan of Northern Quebec over a period of 25 years.
In September last year, the company released an initial NI 43-101 compliant resource for the project at a base cut-off grade of 1 percent TREO, for a total of 183.9 million tonnes averaging 1.45 percent TREO in the indicated resources category, and 66.7 million tonnes averaging 1.46 percent TREO in the inferred resources category.
The miner said another NI 43-101 compliant resource calculation for the Montviel core zone is slated to be finished in July. The company completed its phase 2 drill program at the site in March, totaling 24,234 metres over 50 holes.
The asset is lauded as one of the largest TREO resources outside China, which has the potential for a "significant near term role" in the growing permanent magnet sector due to its proximity to infrastructure and available labour.
In April, Geomega closed the second and final tranche of a $3.5 million private placement financing, and earlier this month announced plans to raise another $206,250 through a non-brokered private financing, as it seeks to fund development at its Montviel project.
The company will issue 375,000 units priced at 55 cents per unit, and use the funds to advance the PEA at Montviel. The proceeds will also go toward working capital purposes.
The Cree Mineral Exploration Board (CMEB) and an institutional board will participate in the offering, Geomega said in a statement.
Rare earths refer to a group of 15 specific elements, known as lanthanides, plus scandium and yttrium, used for everything from smartphones to guided missiles. While some rare earths are relatively common, they are dispersed in a way that makes it difficult to find deposits with high enough ore grades to economically exploit.

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