The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Ucore's separation process draws investor; explorer eyes Bokan feasibility
Ucore Rare Metals Inc.'s exploration endeavors are proving successful - not only in expanding the heavy rare earth elements-enriched deposit at the Bokan Mountain Project in Southeast Alaska, but in discovering new technologies that advance rare earth refinement into the 21st Century.
Hoping to cash in on this success, a "high net-worth" American investor recently tendered a US$1 million down payment toward royalties offered by Ucore.
These royalties will not come from the future sale of rare earths mined at Bokan Mountain. Instead, they will derive from the sale of products and services related to SuperLig Molecular Recognition Technology, a proprietary rare earths and specialty metals separation method that Ucore is involved with developing.
All told, the un-named investor has agreed to pay US$4 million in exchange for royalties associated with the cutting-edge REE separation technology.
"The investment is favorable for Ucore since there is no debt burden, and is prospectively non-dilutive, given that shares will not be issued by Ucore upon closing," said Ucore President and CEO Jim McKenzie. "What's more, the transaction is a vote of confidence from a major investor in the remarkable growth potential of MRT, as well as an endorsement and financing milestone for Ucore, as it transitions towards near-term revenue status and vertical integration."
Separate technology
IBC Advanced Technologies, a Utah-based company that develops and manufactures molecular recognition technology for a broad range of applications, has successfully applied the technique to separating notoriously tightly interlocked rare earth elements.
The MRT process is designed to bind selectively with ions based on multiple parameters such as size, chemistry, and geometry.
Using a pregnant leach solution prepared from material taken from Dotson Ridge deposit at Bokan Mountain, IBC Advanced Technologies developed a three-step process for creating nearly pure rare earths.
On June 16, Ucore announced that Dr. Reed Izatt, a chemist and one of the founding principles of IBC Advanced Technologies, and Steven Izatt, president and CEO of IBC, would be joining Ucore's advisory board.
"With Ucore's expanding focus on metals separation technologies, the insights provided by Dr. Reed Izatt and Mr. Steven Izatt, combined with the benefit of IBC's experience as the global leader in MRT applications to the mining industry, will be invaluable," explained McKenzie.
In early March, Ucore reported that IBC's MRT process had separated all the individual rare earth elements found at Bokan Mountain into salts of greater than 99 percent purity, except for samarium and gadolinium, which remained bound together.
Samarium and gadolinium have now been separated into individual salts, each with 99.2 percent purity.
Not only did the process create pure salts across the entire suite of rare earths, it did so while recovering more than 99 percent of the REEs available in the pregnant leach solution.
"We look forward to completing pilot-scale testing of this promising nano-technology," said McKenzie.
Upon delivery of a fully functional pilot plant, Ucore has agreed to pay IBC US$2.9 million for rights to the potentially sector-changing technology.
Under an agreement announced in March, Ucore will hold a 60 percent interest in a joint venture with IBC to market and sell SuperLig Molecular Recognition Technology for rare earth separation and recycling applications, as well as tailings processing applications.
"Perhaps most importantly, our licensing arrangement includes the application of SuperLig technology to the world recycling and tailings processing sector - both for the recovery of rare earths and all other metals," McKenzie said at the time.
The US$4 million from the yet-to-be-named investor will help pay for the rights.
In exchange, the investor will be granted royalties equal to five percent of gross sales from the first MRT installation or installations, payable until the investment is recouped; and a net smelter royalty equal to 2 percent of the net sales from Ucore's first C$50-million-per-year molecular recognition technology client.
The investor has the option to increase the royalty by up to 0.5 percent by putting up another US$1 million by Aug. 13. An option to trade in the royalties for Ucore shares is also on the table.
Upgrading Bokan
In addition to finding new and improved ways to separate rare earths, Ucore's exploration has significantly upgraded and expanded the REE resources at the Dotson Ridge deposit of its Bokan Mountain project.
This expansion is the result of a 4,000-meter drill program completed last year.
The smaller of two rigs drilling at Bokan during 2014 focused on upgrading inferred resources to the indicated category by infill drilling of the rare earths deposit.
Of the 12 infill holes drilled, 10 cut significant mineralization. One hole, LM 14-142, cut multiple intercepts exceeding 1 percent TREO. Highlights from this hole include 2.42 meters of 1.03 percent TREO, 2.76 meters grading 1.65 percent TREO, 3.37 meters grading 1.9 percent TREO and 2.88 meters grading 1.12 percent TREO.
The larger rig drilled five holes aimed at expanding the resource to depth. The best intercept of this drilling was 3.0 meters averaging 0.755 TREO, of which 43 percent were HREOs, in hole LM14-143.
Incorporating these holes in the calculations, the deposit now contains an estimated indicated resource of 4.79 million metric tons averaging 0.6 percent (63.54 million pounds) total rare earth oxides, a roughly 63 percent increase over the 2.94 million metric tons of indicated resource included in a 2013 estimate.
Additionally, the deposit has 1.05 million metric tons of inferred resource averaging 0.6 percent (13.96 million lbs.) TREO.
About 39 percent of the TREO in both categories are the higher valued heavy rare earths.
The updated resource provides some of the final bits of information for Ausenco Engineering Canada Inc. to complete a feasibility study for Bokan Mountain.
The feasibility study builds upon a preliminary economic assessment completed by Tetra Tech in 2012 that outlines an underground mine feeding 1,500 metric tons of ore to a 750-metric-tons-per-day mill and a state-of-the-art processing facility at Bokan Mountain.
The operation outlined in the PEA envisions the production of about 2,500 tons of rare earth oxides per year during the first five years of full production; including an annual output of 105 tons of dysprosium oxide, 15 tons of terbium oxide, and 568 tons of yttrium oxide.
With the feasibility study in the works, Ucore has already initiated permitting and the company plans to have a plan of operations submitted by early 2016.
Ucore believes the exploration and development of its heavy rare earth-enriched Bokan Mountain project, alongside the cutting-edge REE refining technology separates it from other rare earth-focused companies in North America.
"This resource upgrade, together with our recent advances in molecular recognition technology for refining applications, makes for a compelling mine-to-metal story at Bokan," observed McKenzie.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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