Bokan Mountain may be strategic deposit

Advances in high technology, especially the recent drive to produce increasingly efficient hybrid automobiles, is spurring demand for rare earth elements and energizing a little-known mining sector with at least one known Alaska mineral deposit.

Thanks to analysts touting the virtues of investing in rare earth mining, two companies, Commerce Resources Corp. and Rare Element Resources Ltd. listed on the Toronto Stock Exchange have seen gains in their stock price of 32 percent and 37 percent, respectively, this spring, according to Dow Jones.

The analysts point to recent moves by Chinese investors to acquire a sizable slice of the global supply of REEs and the U.S. Defense Logistics Agency to stop selling into the REE market in 2008 as indications that prices for the unfamiliar metals are on the rise.

Worldwide HREE production originates principally from deposits in China. In 2008, China announced progressive restrictions on the export of REEs to non-China-based production facilities. The resulting constraints on supply have generated increasing global demand for the securing of predictable and scalable sources of these critical high technology metals.

This, in turn, suggests that companies developing rare earth deposits, especially in North America, can expect to see their values continue to increase, analysts say.

Promising deposit in Southeast Alaska

In Alaska, Ucore Uranium Inc., a Canadian junior based in Halifax, Nova Scotia, recently has focused on exploring for rare earth elements and uranium within the Bokan Mountain Granite complex on the southern end of Prince of Wales Island in Southeast Alaska, about 60 kilometers, or 37 miles, southwest of Ketchikan and 130 kilometers, or 81 miles, northwest of Prince Rupert, B.C.

Ucore's Bokan Mountain Project covers 30 square kilometers, or 19 square miles, within the Tongass National Forest and includes the former high-grade Ross Adams Mine, Alaska's only prior producing uranium mine.

Ucore June 11 said it changed the name of its U.S. subsidiary, Bokan LLC, to Rare Earth One LLC to reflect its evolving focus at Bokan Mountain. The rebranded unit will hold Ucore's 512 federal lode mining claims at Bokan Mountain and its other rare earth assets, while the company will retain Ucore Uranium as the operating name of its Canadian holding company.

"The property goes well beyond its superficial prospects as a prior high-grade uranium producer, and is a multi-metal deposit in every sense," said Ucore President and CEO Jim McKenzie in announcing the name change. "The Rare Earth One trade name is a strong mineral group specific brand. Its use will delineate Bokan's potential as a significant rare earth element deposit and a prospective source of these increasingly valuable technology metals."

Wide spectrum of REEs

But what are "rare earth" elements? The narrowest definition restricts them to the lanthanides, which are lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium.

Sometimes the radioactive actinides are included, so that all elements in the f-block are considered "rare earth metals" in a manner similar to how d-block elements are called "transition metals." The actinides are actinium, thorium, protactinium, uranium, neptunium, plutonium, americium, curium, berkelium, californium, einsteinium, fermium, mendelevium, nobelium, and lawrencium.

All are radioactive, and only thorium and uranium are found in large amounts in nature because of their very slow decay rate; one might argue that the elements from neptunium on cannot be properly called "rare earths" because they are all artificial.

Lastly, some include scandium and yttrium as rare earth metals because of their chemical similarity to the lanthanides.

The cheapest rare earth metals are yttrium, lanthanum, cerium, praseodymium, neodymium, samarium, and gadolinium, along with thorium and uranium; while the most expensive are scandium, europium, thulium, and lutetium.

However, the moniker "rare earth" can be misleading, since some REEs, such as cerium, are actually more abundant than lead.

REEs such as thulium and lanthanum are used in numerous electronic applications as well as superconductors, super-magnets, refining catalysts and hybrid-car components.

The two other rare metals one needs to know about are tantalum and niobium. Tantalum is widely used in the electronics industry. Niobium is used in steels and super-alloys.

Though the actual amount of REEs that go into manufacturing products such as hybrid cars is small, it has become increasingly vital, especially in strategic and national defense applications.

REEs in Alaska

Ucore has been exploring Bokan Mountain since 2007 and in 2008, reported drill results from the I&L zone with indications of potentially significant concentrations of highly valuable heavy REEs, many of which are uncommon at most other North American deposits and have valuations ranging from hundreds to over US$1,000 per pound. Further, Ucore said it identified several zones with surface sampling that contain even higher REE values outside of the I&L zone and the other main uranium-bearing zones at Bokan Mountain.

The junior said Bokan Mountain is exceptional among North American rare earth deposits for its pronounced enrichment in the heavy rare earth elements.

"Rare earth deposits in North America and around the world almost invariably skew towards the comparatively less valuable light rare earth elements, with the notable exception of select geological areas in China," Ucore said.

Currently, there is only one REE mining operation in the United States, at Mountain Pass in the Mojave Desert in California near the Nevada border, said Steve Borell, executive director of the Alaska Miners Association. Thus, the potential strategic importance of the Bokan Mountain cannot be overestimated, he said.

"We consider ourselves very fortunate to be exploring a prospective deposit in the State of Alaska," McKenzie told Mining News June 20. "The area has a long history of producing successful mining facilities, and the ongoing support from both the Forest Service and the Ketchikan area has been more than encouraging. Our efforts to establish a prospective rare earth resource are also exciting, since these valuable technology minerals are rapidly increasing in demand in the U.S. and beyond."

Dependence on imports

Analysts for the U.S Geological Survey, an agency of the U.S. Department of the Interior, anticipate increased long-term growth in demand for heavy REEs, both domestically and worldwide. The agency has issued an opinion on the impact of anticipated shortages of REEs on U.S. domestic high technology production capabilities. The USGS noted that the United States was once self-sufficient in the production of REEs but in recent years, has become more than 90 percent dependent on China for its REE supply.

"The United States is in danger of losing its longstanding leadership in many areas of REE technology. Transfer of expertise in REE processing technology and REE applications from the United States and Europe to Asia has allowed China to develop a major REE industry, eclipsing all other countries in production of both ore and refined products," the USGS said.

Deposit may be strategic asset

In 1989, the U.S. Geological Survey first indicated Bokan's potential as a heavy rare earth prospect in a (pre NI 43-101 and non 43-101 compliant) study of the resource. The scientific agency estimated that the area hosts more than 11 million pounds of uranium as well as tantalum, niobium, and rare earth elements, which ranked Bokan as housing the single largest combined heavy and light rare earth deposit in North America.

The study also identified significant in situ yttrium mineralization at Bokan, estimating one of the largest concentrations of yttrium in North America (non 43-101 compliant). Yttrium is considered to be a proxy for the presence of the entire "Yttrium Group of Lanthanides," otherwise known as the HREEs, and has a strong statistical correlation to the presence of HREEs, according to Ucore. In turn, the high relative concentrations of yttrium at Bokan correlate well to the area's strong prospectivity for the entire suite of HREEs, the junior said.

Since acquiring the Bokan Mountain property in 2007, Ucore has been working to confirm the USGS estimates and is investigating the possibility of an even larger resource, to be explored with modern exploration techniques.

Drill core results from 2008 show REE mineralization, including yttrium, zirconium, beryllium, and niobium, at Bokan Mountain.

USGS funds more research

In April, the USGS awarded one of four 2009 Mineral Research Grants for the investigation of mineralization at Bokan Mountain. The focus of the studies will be the uranium and rare earth deposits within the Bokan Mountain Granite complex, and will be conducted by a group of geologists from four Canadian universities, lead by Dr. Jaroslav Dostal of Department of Geology, Saint Mary's University, Halifax, Nova Scotia.

The U.S. Department of the Interior scientific agency said its Mineral Resources External Research Program awards the grants to support research projects that assist in securing sustainable supplies of minerals for the future, while delivering mineral information of critical importance to national security.

The research at Bokan Mountain is expected to provide further insight into the geological processes which led to deposit formation, while characterizing the granite complex which hosts the deposit at Bokan. In particular, the project will aim to define the various types of mineralization, decipher the nature and origin of the uranium and REE mineralization, document the description, classification and chemical nature of the host peralkaline rocks, and supplement data as to their origin and tectonic settings. The study may also establish geochemical parameters to help distinguish ore-bearing from barren peralkaline granitic complexes.

The project is expected to provide a better understanding of the geologic processes that led to deposit formation and to characterize the granite complex that contains the deposits. From this study, analogies to similar deposits around the world will be made and the potential for similar deposits in Alaska and western North America can be assessed, according to the USGS .

"This research project represents a substantial financial commitment on the part of the USGS to the greater understanding the Bokan Mountain complex," said Ucore President and CEO Jim McKenzie. "It will undoubtedly raise international academic awareness of the site, and add greatly to our own understanding of what we have. Ucore will be providing extensive logistic support as the project moves ahead."