In March 2016 I had the opportunity to visit a leading North American research and development company, focused on materials and components relating to energy-storage devices. I was invited to visit the facility by Alabama Graphite Corp (AGC) (TSX.V:ALP, OTCQX:ABGPF), to see how AGC’s development of coated spherical purified graphite (CSPG) is progressing, and to get a better understanding of the battery prototyping and production processes.

For competitiveness reasons, the invitation was issued with the proviso that I not identify the company that I visited, or the personnel that I interviewed, under the terms of a strict non-disclosure agreement. The company (which I will call EngineeringCo for the purposes of this article) assists a number of players in the critical-materials space with the development of value-added processes, with particular expertise in Li-ion batteries (LIBs). EngineeringCo was at pains to make sure that the only work that I saw during the visit, pertained to processes and components relating to and produced from, AGC natural-flake graphite.

I was able to take a number of photographs during my visit, which are included below (click on the thumbnails to enlarge the images). Also included is a separator / electrode cross-section schematic, and other images produced by EngineeringCo and AGC that were verified during my visit.

Nevertheless, I had the opportunity to discuss a number of topics of wider interest to the use of natural graphite in LIBs with a senior scientist at EngineeringCo (whom I will call Dr. X), who is well known by many in the graphite industry and beyond, for his experience and expertise in the processing of graphite, anode production for LIBs and LIB prototyping and validation.

Regardless of the ultimate application, the early stages of natural-graphite processing are generally the same. The graphite ore is mined or excavated, and then crushed so that the contained graphite flakes can then be concentrated, via flotation. The crushed ore is typically placed into water with an additive such as pine oil or kerosene, which creates a thin film on the surface of the water. Graphite flakes are hydrophobic and lighter-weight, and being repelled by the water they remain at the surface, while the heavier rock matter simply falls to the bottom of the flotation cell. The result of these and associated processes is run-of-mine (ROM) concentrate, and historically has been the goal of most graphite juniors, looking to produce a saleable material as a result of their endeavors.

More recently, companies like AGC have realized that the way to maximize the value of their graphite ores is to apply secondary processes to this ROM concentrate, with the goal of producing so-called battery-grade graphite for LIBs. These secondary processes include purification, micronizing, spheroidizing and coating, to produce CSPG, a high-value graphite product that can be used for the anodes in LIBs. Each of these steps requires careful optimization, with the process parameters being tailored to the unique characteristics of each specific ROM concentrate.

I asked Dr. X why companies choose a particular order for completing the secondary processes of purification, micronizing, spheroidizing and coating ROM concentrate, for battery-grade materials. Not unsurprisingly, he commented that it boils down to economics. In the past, graphite mines would generally categorize their ROM concentrate into two broad categories; coarse flakes (+80 mesh / +180 µm) would be sold into higher-end applications (such as graphite crucibles, extruded shapes and steelmaking), whereas the finer material was only given secondary consideration, for use in pencils and other applications (such as powdered metallurgy, composite brake pads, forensic dispersions, zinc-carbon ‘lantern’ batteries, dry lm and liquid lubricants, and the like).

When first commercialized over 25 years ago, LIBs utilized anode-active materials comprised of mesophase carbon microbeads (MCMBs), produced via an expensive process by a single Japanese company, Osaka Gas Co. Osaka Gas was not able to reduce the cost of MCMB synthesis, in the face of LIBs becoming commodity devices, requiring commodity pricing on all of the materials and sub-components used to manufacture them. MCMBs soon lost their dominant market share to graphitized chopped carbon fibers (GCCFs), produced by Toshiba, BP Amoco and other companies.

The increasing demand for LIBs put further pressure on the anode-material producers and GCCFs were in turn superseded by two materials: graphitized, surface-coated synthetic graphite, and surface-coated natural purified flake graphite. Today, battery manufacturers increasingly favor the replacement of synthetic graphite with natural graphite in anodes for LIBs, for a number of reasons:

• The carbon-based precursor materials for the synthetic route have to be graphitized through a costly heat-treatment process. Since natural graphite is already graphitic in nature, it is an inherently lower-cost material to produce;
• LIB anodes require high-purity, spheroidal particles with sizes in the range of 10-25 µm. Synthetic graphite, once graphitized, is generally brittle and more resistant to processing, in contrast to natural graphite, which is more lubricious and amenable to such processing. This means that natural graphite is significantly easier to spheroidize than synthetic graphite (with some observers arguing that synthetic graphite cannot actually be spheroidized at all). Spheroidal particles are preferred as they contribute to maximizing the overall energy density value of the battery (more on this, later in this article);
• Most premium-quality natural crystalline flake graphite exhibits superior performance to synthetic graphite. For example, CSPG produced from AGC’s Coosa graphite deposit, with a particle size of D50 = 18.3 µm has a reversible capacity (the energy capacity that can be consistently and reversibly achieved upon cycling) of 367.21 mAh/g, just shy of the theoretical maximum of 372 mAh/g. In contrast, one of the industry’s best commercial synthetic graphite products with a particle size of D50 = 15.8 µm, has a noticeably lower reversible capacity of 347.2 mAh/g. More on these values, later in this article;

Typically the larger the flake size, the higher the purity of the untreated graphite, which resulted in the initial recent industry emphasis on the proportion of large-flake graphite in any given deposit (the more, the better, went the mantra). What this focus missed, however, is the fact that the process of converting large flakes into smaller particles of a suitable size for anode production, is expensive because any additional grinding is energy intensive, adding additional cost to processing. Indeed, the larger the flake size, the more energy is required for this size-reduction process.

If instead, the process began with smaller flake sizes, and the purity of these materials could be improved through low-cost purification techniques, finer flake material would become particularly attractive for producing battery-grade graphite, and in fact more cost effective than starting with large-flake material. Deposits would not require significant proportions of large-flake graphite to be suitable for battery-grade graphite production; having larger proportions of finer flake material could in fact be an economic advantage.

This latter approach is the one that AGC has taken with its ROM concentrate. Dr. X pointed out that the flake sizes in AGC’s Coosa graphite deposit are fairly evenly distributed. Instead of trying to convert all of this material into battery-grade graphite, a simple screening filter could separate the ROM concentrate into -100 mesh / -150 µm flake, for battery applications, with the remaining +100 mesh / +150 µm particles for traditional higher-end applications. Further screening to produce +80 mesh / +180 µm, +50 mesh / +300 µm and +32 mesh / +500 µm fractions could be applied, to further differentiate the coarse-flake material for specific end-use applications.

Battery-grade graphite requires high purity for effective operation. Traditional purification processes include baking the graphite with sodium hydroxide, and the acid-leaching approach, widely used in China, to dissolve the impurities out of the graphite. In the acid-leaching process, the ROM concentrate is immersed in a mixture of hydrochloric and hydrofluoric acids. The hydrochloric acid removes oxides present as soluble chlorides, but does not react with the silica impurities that remain. Hydrofluoric acid is needed to remove the silica, in the form of soluble fluorosilicic acid. This results in large amounts of acid washings; in China these are typically not neutralized or treated but are often simply flushed into local waterways, causing damage and pollution to local aquifers and wells.

While chlorides are not noxious, the fluorides produced, at the concentrations resulting from this process, are particularly toxic. While the cost of the acids used in the acid-leach process are relatively cheap (USD 300-350 / t of graphite purified), such costs do not take into account the cost of the treatment of the waste streams that would be required of any processing plant located in a Western jurisdiction, which according to AGC may be as high as USD 5-7k / t of graphite treated, using reverse osmosis. Clearly then, the acid-leach process is unlikely to be a cost-effective approach for any environmentally responsible graphite purification plant.

Another method is a variation of the Acheson process (originally used to produce silicon carbide and synthetic graphite), which involves the placement of large quantities of ROM concentrate and coke into a pit in the ground, and running high electrical current through it via two electrodes. The high electrical resistance of the mixture causes it to heat up quickly, producing a chemical reaction that results in relatively pure graphite. Operating temperatures are in the range of 2,800-3,000 °C. The presence of fine-flaked material in such a process is potentially dangerous because of the risk of combustion. Thus the graphite has to be pelletized prior to purification, with these pellets being re-crushed afterwards, before being further processed. However, the smaller the starting flake size, the more difficult and expensive it is to pelletize the material.

Other methods include the use of fluidized-bed technology, where the graphite is continuously fed into a reaction chamber and subject to a stream of inert gas at high temperature, which causes the impurities to volatilize (convert into gaseous mists) and to be removed from the graphite, which eventually burns off (and partially settles) in the off-gas chamber / neutralization process. The removed impurities are captured via scrubbers and turned into benign products such as gypsum.

The aforementioned thermal process is typically run at 2,400-2,600 °C – higher than the volatilization temperature of the impurities found within the graphite. Such high temperatures require significant energy consumption and are thus relatively expensive.

Using a process that eliminates the need to pelletize, can be run at lower temperatures, and which avoids the pollution associated with acid leaching, is therefore essential to the cost-effective purification of finer-flake graphite.

Although EngineeringCo has access to lower-cost purification processes that are suitable for finer-flake materials, AGC had already turned to another North American company (which we’ll call PurificationCo here – again, their identity is confidential) to work on this challenge for their material. I have previously visited the facilities of PurificationCo, and had the opportunity to discuss the purification process developed for AGC, with senior staff at PurificationCo, after my visit to EngineeringCo.

According to PurificationCo, the purification process for AGC material is essentially a halogenation process, where chlorine gas is used to convert the impurities to volatile chlorides. With an appropriate system design, the chlorine gas can be recycled, resulting in a relatively inexpensive process. The process is the standard process for purification of titanium dioxide to make paint pigments, with production in 2015 of about 3 Mt of titanium dioxide. The process runs at significantly lower temperatures than those of fluidized-bed processing – resulting in significant energy cost savings.

The surface area of finer graphite flakes is higher than for coarse-flake material, and much higher than graphite pellets, and this is advantageous for a process of this type because it makes it easier for the chlorine to diffuse into the graphite particles, and to react with the impurities present.

Dr. X commented that the graphite purity obtained during the purification step must be higher than the minimum purification specification for the battery-grade graphite at 99.95 wt% C. This was confirmed by PurificationCo.

This is because there are a number of post-purification processing steps required to produce such materials. Despite efforts such as air purification and other measures, each processing step has the potential to cause minor contamination in the material, at the parts-per-million (ppm) level. For this reason, the purification process produces a 99.98%+ purity graphite, higher than the final purity specification of 99.95%+ for the finished products.

I asked Dr. X how graphite purity is actually measured. He said that a carefully measured sample of a given graphite product is placed into a low-profile ceramic crucible, loaded in a small muffle furnace, where it reacts with oxygen. This reaction produces carbon dioxide which evolves as a gas. What remains is a tiny quantity of ash which contains the non-carbon content of the graphite. This ash is then weighed and analyzed for content, to determine the purity of the original graphite.

Interestingly Dr. X commented that this process can be used to identify the source of the graphite being tested, since each deposit has a characteristic distribution of impurities. Image analysis of the ash under magnification, combined with computerized statistical analysis, allows EngineeringCo to compare a given sample with a large database of previous samples. This is a useful tool for verifying the source of materials, for buyers and end users. The company also uses atomic-absorption spectroscopy to check the elemental content of the ash, for the presence of some 19 specific elements that are particularly problematic for battery operation, if found at elevated levels in the graphite. Full-blown chemical analyses can also be conducted using standard ICP analysis.

After purification, the next process step for the AGC material is to micronize it – to reduce the average particle size to some value within the 10-25 µm range that is optimal for anodes (the specific value will depend on customer requirements). This is achieved using jet milling, where the graphite flakes are drawn into streams of high-velocity gases that cause the flakes to collide with each other and to break apart, reducing their size to the target value. The EngineeringCo folks showed me how the process is controlled by altering the duration, the gas pressure and velocity in the system, and the mass of flake material processed at any one time. Small test batches are always done before processing bulk materials, since different graphite sources can exhibit different properties during the jet-milling process. Note, micronization may also be performed before spheroidization – and, in some cases, may be required, depending on the graphite material.

Before and after milling, the particle-size distribution of the graphite powders needs to be measured, so that the appropriate set of parameters to achieve the target size value can be determined, and to ensure that the jet-milling process has been effective. This is determined using a device that passes a laser through the powder, mixed with water with the addition of a detergent. The laser light will scatter as a result of its interaction with the particles, and the distribution of particle sizes can thus be determined, via a histogram plot. Cumulative volumes are also plotted against particle diameter, on the same chart.

The cumulative volume allows the operator to determine the ‘D values’ for the sample – essentially the range of particles sizes, and an average value. The particles are modeled as equivalent spheres in the system. The D10 value corresponds to the diameter of the equivalent sphere, at which 10% of the sample consists of smaller particles. D50 is the median diameter – the diameter at which half the sample consists of smaller particles. D90 is the point at which 90% of the sample consists of smaller particles. The D10 and D90 values represent a particular range of diameter values, with the D50 value representing the average particle size. All three values are useful in specifying the characteristics of a given powder.

Once milling is complete, the resulting powder is then classified into precise particle-size-based fractions of the overall material.

The next step in the process is spheroidization – converting the graphite particles into rounded, potato-like shapes. The closer the particles are to being spherical in shape, the greater the performance of the anode in the battery. Why is this?

It has long been proven by mathematicians that the most effective way to randomly pack as many particles into a given volume as possible, is if the particles within that volume are perfect spheres. If arranged carefully, then in any given volume the maximum theoretical space that can be taken up by the spheres, is 74% of the overall volume. For randomly packed spheres, this maximum drops to just below 64%. The further away a particle is from being spherical in shape, the less efficient is the random packing of those particles into a given volume. Spiky or needle-shaped particles, for example, when packed randomly, have an efficiency of packing somewhere in the region of 30% – significantly less than that for spheres.

So why do we care? Because the anode density – the amount of actual graphite that can be packed into a given volume – directly affects the energy density of the battery. This is the amount of energy that can be stored in the battery, per unit volume of graphite (measured in Wh/l). The denser the graphite anode, the greater the energy density on a full cell level.

Dr. X commented that this is one reason why synthetic graphite for graphite anodes is so expensive, because as produced, the particles tend to be long and thin. Even the best efforts to produce spheroidized graphite from synthetic graphite result in lower capacities per unit of battery volume, because they are ultimately less spheroidal. The conversion of these needle-like shapes into spheroidal particles is more energy intensive than for natural-flake graphite, and with lower yields.

Synthetic graphite can also see lower graphitic carbon content than natural graphite. The latter affects that critical parameter of any battery anode, its reversible capacity.

As previously mentioned, the theoretical maximum reversible capacity for graphite anodes is 372 mAh / g. EngineeringCo has measured values of 367.21 mAh / g for anodes produced from AGC graphite. This compares to values of 290-330 mAh / g for typical synthetic graphite, and 340-350 mAh / g for the best anodes produced from premium-quality synthetic graphite.

Needle-like particles are also undesirable because they have a tendency to break into small pieces during processing, and if still present, those pieces may diffuse in the electrolyte during operation, to the cathode, potentially causing a short circuit. Even if this can be avoided, these pieces may absorb electrolyte, impairing the capacity of the battery because of first-cycle losses (chemical reactions at the interface of the anode during the first charge/ discharge cycle).

EngineeringCo uses a highly proprietary spheroidizing process for the AGC materials, causing the particles to smooth each other through collisions that eventually result in the desired spheroidal shape. Sharp edges present in the original flakes are broken off and are redeposited onto the surface of the spheroids. The subsequent yield of the process, according to Dr. X, is 75%+, compared to the typical yields of processes undertaken in China at 20-30%. The cost benefit of such yield improvements are self-evident, if they can be scaled.

Furthermore, the remaining 25% of non-spheroidized graphite, with a typical particle D50 of 3-10 µm, can be used as conductivity-enhancement additives in the battery cathodes. Dr. X commented that junior graphite companies generally have little appreciation for the opportunities relating to cathodes, in addition to battery anodes. Premium-performance conductivity-enhancement materials are typically worth in the region of USD 15-20k / t – significantly higher than the USD 12-14k / t that spheroidal graphite produced from natural graphite can command. These materials could also be used in the production of alkaline and zinc-air batteries, conductive paints and coatings, to name a few markets.

Ultimately the performance of the graphite, once produced, is related as previously stated, to its density in the anode. Tap density is frequently used to describe this parameter – calculated by mechanically tapping a graduated cylinder containing graphite material, until little further volume change is observed. EngineeringCo uses autotap machines to determine tap density, by recording the height of material in a container, and its mass.

Dr. X argues that a more useful parameter is the bulk density of the material, because when used to produce anodes, the graphite particles are free flowing, and are not tapped. The bulk density is the ratio of the sample mass to the volume that it occupies (including gaps between the particles), without being tapped. It is measured using a Scott volumeter. This uses a receptacle of known volume and mass, into which graphite is poured through a funnel that sits on a baffle assembly. As the graphite pours through the baffles, it fills the receptacle until it overflows. The powder is leveled off using a flat edge and then the cup is re-weighed, to determine the mass of graphite and thus the bulk density, since the volume is known.

The bulk density needs to be as high as possible because the battery anode is produced using a painting process, and is not pressed or otherwise ‘tapped’ – thus requiring particles to be as close to spherical as possible, as previously explained, for space-packing reasons. More on that process, later in this article.

Once spheroidized, the graphite particles need to be classified by size and then coated. There are a couple of important reasons for this. The first is to improve the safety of battery operation. As mentioned previously, if there are any sharp edges left at the surface of the graphite particles prior to anode formation, these may break off and diffuse to the cathode during operation, increasing the chances of a short circuit in the system at the cathode, leading to thermal runaway. ‘Smearing’ the particle surface during spheroidizing and then adding a coating reduces the probability of these sharp pieces breaking off the graphite particles in the anode, during operation.

The second reason is to reduce problems at the surface-electrolyte interface (SEI) in the anode, that result in first-cycle losses. During the first cycle in the battery, a foam layer can build up at the SEI which can reduce the reversible capacity of the battery during subsequent charge / discharge cycles. Again, the presence of small pieces of graphite can increase the thickness of this SEI layer and coating the particles helps to reduce it, by decreasing the Brunauer, Emmett, and Teller (BET) parameter for the particles. This is a measure of the effective surface area of the particles; the higher the BET surface area value, the greater the probability of sharp surfaces being present on the particles.

EngineeringCo uses a proprietary method for applying a 10 nm carbon-based coating on each of the particles, which is subsequently cured to polymerize the coating at the surface. The coating provides continuous coverage of each particle to reduce the BET surface area, while at the same time allowing the Li⁺ ions in the electrolyte to pass through small pores or channels, to contact the surface of the graphite particles in the anode. Larger molecules (such as the small pieces of graphite previously mentioned) are prevented from getting through. The ability to protect the surface of the anode without impeding the flow of Li⁺ ions is crucial for effective battery operation, and the proprietary coating allows this to happen.

The coating process is the final step in the production of the CSPG material, and the graphite is then ready to be used in the production of anodes for LIB testing.

All battery prototypes at EngineeringCo are individually produced, in either button (CR2016 or CR2032) or cylindrical (AA, 18650 or 32650) form factors, depending on the particular goals of the project. Putting together the batteries is undertaken in an argon glove box, because of the reactivity of the Li-ion electrolyte in the air. Dr. X indicated that in commercial facilities, the construction of batteries is undertaken in dry rooms which have a special atmosphere called ‘dry air’, which can be breathed by the workers in them, but which prevents the oxidation of the Li-ion electrolyte and other compounds used in battery construction.

For the cylindrical batteries, the anode, separator, and cathode components are wound together in a spiral, before being placed inside a cylinder. The anode is produced from a long strip of copper foil, typically 10 µm thick, which is coated on both sides with a paint of CSPG particles, each layer being approximately 45 µm thick. The cathode is produced from a long strip of aluminum foil, typically 20 µm thick, which is coated on both sides with a paint of one of several metal-oxide compounds, such as lithium cobalt oxide, lithium iron phosphate, lithium manganate, or lithium nickel manganese cobalt, depending on the battery configuration to be tested. These cathode layers are approximately 90 µn;m thick.

Mixed in with this cathode metal-oxide powder is approximately 8 wt% of the conductivity-enhancement additives previously mentioned, that is typically equal parts carbon black and graphite. Such additives are always included in the cathode formulations. Typically, synthetic graphite is used, though as Dr. X commented previously, there is an opportunity to use the natural graphite that remains after spheroidizing, in this additive. The additive is required to improve the conductivity of the cathode during operation, as well as to control the viscosity of the paint when it is being applied to the foil. The graphite here therefore has a different function that the graphite being used in the anode. The aluminum foil used in the commercial production of cathodes may also be coated with carbon.

In between the anode and cathode strips is a 20-25 µm thick separator strip, typically produced from an ultra-high-molecular-weight polypropylene or polyethylene film, which has a controlled level of porosity. This gives some ‘space’ for the electrolyte between the two electrodes. The overall thickness of the anode component is approximately 100 µm, whereas the cathode strip is typically 190-200 µm thick. The difference in thickness is a result of the different reversible capacities of the materials used in the anodes, with the best cathode materials having values that are less than half that for natural-graphite anodes. Therefore, the cathode thickness is approximately double that of the anode, to balance the electrochemistry of the system, during operation. The diagram included in the images below shows a schematic of the anode / cathode / separator arrangement inside the battery.

Once the spiral has been wound and placed in the cylinder, the electrolyte is added, and the cylinder is sealed via either crimping or laser welding. Button-shaped battery prototypes use disks instead of spirals inside the container, though the configuration is effectively the same as for the spiral systems. The batteries are then ready to undergo proprietary formation, followed by testing, which involves repeated charging and discharging of the batteries, to determine the first-cycle losses, reversible capacity, and any changes in characteristics over time.

By the time of my visit, EngineeringCo had previously processed over 10 kg of AGC graphite material into CSPG material, and produced at least 50 batteries from it. Multiple prototypes and tests are required to establish representative performance metrics for the batteries, and the graphite contained within them.

The visit to EngineeringCo was very enlightening and it was a great opportunity to see the operations used to produce CSPG materials from AGC’s graphite, and the process of testing and evaluating such materials in actual battery prototypes. My thanks go to EngineeringCo, Dr. X and his colleagues for hosting me, PurificationCo and to Alabama Graphite Corp. for the invitation to see these processes in action.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Alabama Graphite Corp. (“AGC”). Neither he nor Technology Metals Research, LLC received compensation from AGC or from anyone else, in return for the writing of this article.

In October 2015 I paid a visit to the Coosa graphite project in the USA, being developed by Alabama Graphite Corp. (TSX.V:ALP, OTCQX:ABGPF) in Coosa County, Alabama.

Located in a past-producing region of the state known as the Alabama Graphite Belt, the Coosa project is approximately 50 miles south-southeast of Birmingham and 20 miles north of Montgomery. The project is also 30 miles northeast of the Bama Mine project, also owned by Alabama Graphite Corp (AGC).

20 miles to the northeast, AGC has its field office and core storage facility in Sylacauga, which I also had the chance to visit. Sylacauga is home to the world’s largest marble quarry, and the source of the pure, white marble used in the construction of many famous buildings and memorials in the USA, including the US Supreme Court building, the US Capitol rotunda and the Lincoln Memorial in Washington, DC.

I was hosted during my visit by Don Baxter, President & CEO of AGC, Rick Keevil, VP for Project Development and Jesse Edmondson, Project Geologist for Coosa and also Director of Community Relations.

Per the October 2015 NI 43-101 guided mineral-resource estimate for the Coosa deposit, at a 1% graphitic carbon (Cg) cut-off grade, 78.5 megatonnes (Mt) of the resource is at the Indicated level @ 2.39% Cg and 79.4 Mt is at the Inferred level @ 2.56% Cg. This results in an estimated 3.9 Mt of Cg present in the mineral resource at Coosa. The resource estimate was based on the results of 109 drill holes totaling 7,900 m (25,900 feet) and 9 trenches totaling 1,150 m (3,800 feet).

Graphite development companies typically report on the distribution of flakes sizes in their graphite deposits. Metallurgical results announced by the company in May 2015, and subsequently reported in the PEA report indicate that approximately 25-30% of the graphite present at Coosa is in the form of large flakes (+80 mesh or >180 μm). However, as we will see later in this article, AGC’s intended approach to production potentially negates the need for significant quantities of large-flake graphite to be present in the deposit, since the company’s plan is to process graphite across the range of flake sizes, into higher-value engineered graphite products.

You can see photographs taken during the visit in the galleries below (click on each image to enlarge it).

The name of the Coosa project has its roots in the local history of the area. Historically Coosa was a Native American province which included parts of present-day Alabama, Georgia, Tennessee, and South Carolina. This province gave its name to the Coosa River, which flows at the western boundary of Coosa County. The area is situated towards the southern end of the Appalachian mountain range, in the Northern Piedmont geological province.

AGC holds the mineral rights to a total of 17,000 ha (42,000 acres) of land at and around the Coosa project location. Mr. Baxter indicated that the surface rights for the Coosa Project are owned by a timber company, and are currently leased by AGC for exploration use. He commented that AGC has an excellent working relationship with this timber company and that they are supportive of the project’s continued development.

The host formation for the Coosa deposit consists primarily of schists, including quartz-muscovite-biotite-graphite schist, quartz-graphite schist, quartz-biotite-garnet schist and combinations of these. Schists are medium- to coarse-grained rocks, formed through the metamorphosis of shale or igneous rocks. The resulting foliation, or planes of weakness in the rock, makes it relatively straightforward to break up these materials for processing. Mr. Baxter commented that the quartz and other waste minerals that will result from processing these schists, could potentially be sold and used for a variety of end uses, including the production of roof shingles and the like.

Although the project location is rural, the Coosa project is well served by local roads, with interstate highway 65 less than 5 miles from the property. Coosa is close to other local infrastructure, with the nearest town just 5 minutes away from the site.

Mr. Keevil explained that the top 20-30 m (60-100 feet) of the graphite-bearing material at the Coosa deposit has been oxidized and weathered over time, resulting in a very soft rock that is easy to excavate and to process. This was confirmed during the site visit, with on-site sample materials easily crushable by hand. This weathered layer means that for a significant portion of the mine life, no drilling or blasting will be required to obtain the graphite ore; instead simple excavating equipment will be used in an open pit to get at the materials.

With one or two exceptions, junior-mining companies looking to develop graphite projects typically focus on the production of run-of-mine (ROM) concentrates, produced by beneficiating graphite ores using standard processes such as crushing, milling and flotation. ROM concentrates are typically sold directly to end-users in a number of sectors. Given the relatively low value of such materials, projects focused on ROM concentrates likely need to have high head grades in their graphite deposits, to reduce the costs of ROM concentrate production and to generate reasonable margins.

The path to greater revenues (and margins) for any future graphite producer lies in upgrading the ROM concentrate, preferably in-house, so that it can be used to produce the anodes for lithium-ion batteries (LIBs). Battery-grade graphite requires particularly high purity levels, typically greater than 99.9% Cg.

Mr. Baxter explained that the AGC business model is focused on the production of highly engineered graphite, mostly for the production of LIB anodes. Recent initiatives by Tesla Motors and others to produce large quantities of LIBs for electric vehicles and home energy storage, will require significant quantities of graphite to meet demand. In keeping with the ‘green’ credentials of such end users, such graphite will need to be produced in jurisdictions that mandate a significant degree of environmental protection, with respect to the methods used to produce engineered graphite products.

During battery operation, in order for the lithium ions in the LIB electrolyte to efficiently diffuse between graphite particles within the anodes, the particles need to be small, and this is achieved through micronization of the precursor graphite powders. Standard battery-grade graphite requires an average diameter of approximately 10-30 μm.

Such materials also need to be spheroidized – increasing the packing or ‘tap’ density of graphite particles by converting the naturally flat graphite flakes into potato-like shapes. The combination of high purity and tap density enhances the electrical conductivity of the graphite anodes, during use in the LIB.

Conventional wisdom for battery-grade graphite developers, has been to focus on graphite deposits that contain significant proportions of large (>150 μm) graphite flakes, because the purity of the graphite flakes tends to increase with flake size. However, given the additional energy costs required to micronize large flakes, the ideal precursor material would have small flake size, if it had sufficient purity levels (either as-is or through a cost-effective purification process) for the subsequent processing to be economically viable, and if it can be effectively spheroidized.

In addition to micronizing and spheroidizing high-purity graphite, battery-grade powders also need for the individual particles to be coated, typically using a non-graphitic carbon material, to reduce the specific surface area of the powder. Lowering the specific surface area increases the ability of the anode to operate efficiently in the battery in which it will operate, increasing the useful life of the battery. Just as important, it reduces the risk of a runaway chemical reaction, which could lead to a dangerous situation in usage.

Since Mr. Baxter joined the company in June 2015, AGC has transitioned its business model from that of a potential purveyor of ROM concentrates, to a potential producer of high-purity, engineered graphite. Per the Preliminary Economic Assessment (PEA) for the Coosa project, published in November 2015, AGC intends for 75% of its annual production of graphite to be in the form of coated spherical purified graphite (CSPG), for use in battery anodes, with the remaining 25% of production being sold as purified micronized graphite (PMG), for use in a variety of non-battery applications such as powder metallurgy, friction materials, and polymer, plastic and rubber composites.

Mr. Baxter indicated that the proportions of graphite going into each of the two products is related to the particle sizes that result from micronizing and spheroidizing the graphite flake, which has first been subject to a purification step. Particles with resulting sizes >10 μm are converted to CSPG via surfacing coating, and have typical Cg purities of 99.95%+. The remaining particles, with sizes <10 μm will be sold as PMG materials, and have typical Cg purities of 98%+.

The Coosa PEA assumes a 27-year mine life (mining 10% of the mineral resource estimate and focused only on the oxidized top layer of material), and that production at Coosa will start at 5,000 t / year for five years, rising to 15,000 t / year by year 7. It is further assumed that the capital costs associated with such an expansion, are funded from the free cash flow produced in the initial production period. At an 8% discount rate, this results in a pre-tax Net Present Value (NPV) of $444M or $320M post-tax (all $ in USD), and an Internal Rate of Return of 52.2% pre-tax (45.7% post-tax).

I asked Mr. Baxter how these numbers would look if the expansion did not take place (i.e. if the 5,000 t / year production rate was constant throughout the life of the mine). Such a scenario results in an NPV of $157M pre-tax ($120M post-tax) at an 8% discount rate and an IRR of 47.8% pre-tax (42.4% post-tax).

The PEA assumes that CSPG can be sold for $9,000 / t, with PMG fetching $2,000 / t. These prices are based on estimates from Benchmark Mineral Intelligence of current selling prices of $7,000-12,000 / t and $1,800-2,800 / t for CSPG and PMG products respectively.

The PEA also states an estimated operating cost over the 27-year mine life of $1,555 / t. This is a blended operating cost, covering the combined cost of production of CSPG and PMG. If accurate, these numbers would provide AGC with significant margins for its two product lines, particularly the CSPG material.

So on what basis does AGC believe that it can actually and economically produce these engineered graphite products? The company has been testing a number of processes for the purification, micronizing and spheroidizing of its graphite flake in recent months.

In September 2015, AGC announced that 99.99% Cg purities had been obtained across the full range of flake-size distributions. A conventional low-temperature thermal purification process, using chlorination, was applied by an unnamed metallurgical laboratory to graphite concentrates produced by SGS Mineral Services of Lakefield, Ontario. Recoveries of 90%+ following purification were obtained.

This announcement followed on the heels of the initiation of a pilot plant program at SGS, for the processing of a 200 t bulk sample into graphite concentrate. Mr. Edmondson said that the bulk sample came from a total of 10 pits, each providing approximately 20 t to the sample. The pits were evenly distributed across the Indicated mineral-resource area of the property, to represent the variations in grade, flake size and rock type typical to the deposit.

During my visit, Mr. Baxter indicated that tests of micronization and spheroidization processes for the purified Coosa graphite were underway. These processes were hinted at in the PEA report; a news release from the company issued in January 2016, detailed the results of downstream independent LIB tests using graphite anodes produced from Coosa CSPG materials.

The results announced in last month’s news release indicate that AGC’s micronizing, spheroidizing and coating processes were apparently successful. A tap density of 0.985 g / cm³ was achieved (anode production typically requires a minimum tap density of 0.9 g / cm³), along with a desirably low specific surface area, relative to the commercial LIBs tested.

A reversible capacity of 367.21 mAh/g and irreversible capacity loss of 5.09% were obtained for the AGC batteries, compared to 347.2 mAh/g and 6.06% respectively.

If these results can be replicated at the demo and subsequent commercial scales, AGC will have demonstrated the ability to effectively produce CSPG suitable for commercial-grade LIB graphite anodes.

During my visit to Alabama, I asked Mr. Baxter about a couple of news releases issued by AGC earlier in the year, concerning the apparent occurrence of ‘naturally occurring graphene’ at the Coosa project site. He said that samples from the Coosa site had been analyzed at the University of Alabama, and graphene with 2-10 layers had been observed. Analysis was also performed at Queens University in Kingston, Ontario, which apparently observed the graphene layers in samples obtained from the rougher flotation process applied to bulk samples of Coosa materials.

Mr. Baxter described these initial findings (announced prior to his taking the helm at AGC last year) as “interesting but somewhat academic” at this stage. The presence of multi-layer graphene, if confirmed, may indicate that the graphite present at Coosa may be more susceptible to delamination, which if the case, would present the possibility of the use of shearing during processing. However Mr. Baxter noted that AGC was firmly focused on the production of engineered graphite for battery and other applications, and not on graphene production. This was recently reiterated in AGC’s January 2016 Corporate Update, confirming that AGC has no intentions of getting into “the graphene business”.

Mr. Edmondson commented that because the Coosa project is located on private land, permitting for the project will rest at the state level, which should provide a relatively straightforward process when compared to mining projects on Federal or Crown land, elsewhere in North America. The company anticipates that the entire permitting process will require approximately six to eight months for completion. There is significant local and state-level support for the Coosa project, given the number of potential jobs that would be created from the project. The proximity to the Sylacauga marble mine means that there are significant numbers of skilled workers in the area; labor costs are relatively low in Alabama.

AGC is keen to stress its “Made in USA” credentials for a future Coosa mine; Mr. Baxter commented that the proximity of the project to current and future battery manufacturers in the USA, should give the company a key advantage in servicing such potential customers, over other projects located further afield. The company also highlights the Alabama connection on its Web site and presentations, tying in to the state’s own “Made in Alabama” campaign and the apparent advantages that this might have.

Commenting on the future mine design for Coosa, Mr. Baxter said that a goal will be for zero discharge of wastes from the mine. The site will incorporate a number of sedimentation ponds and dry-stack tailings, where waste products will be stored after thickening. All water used for processing will be recycled, with small amounts of ‘make-up’ water used if needed.

The weather in Alabama is such that winterizing of buildings on the future mine and processing site will not be required.

The initial processing mill will be located on-site at the Coosa project. The plant for purification and further processing of the mined graphite will be located approximately 20 miles from Coosa in Rockford, Alabama, to which there is direct access from the Coosa site along county roads. An existing natural-gas pipeline runs through Rockford. The proximity of this pipeline will be beneficial to the capital and operational expenditures, associated with the furnaces needed for the processing facility in Rockford.

After visiting the Coosa project site, talking with AGC management and reviewing the recent announcements from the company concerning its battery-grade pilot-plant work, I believe that AGC’s Coosa project is on a sound technical footing. The decision to go beyond the production of ROM graphite concentrate, in order to provide a ‘one-stop shop’ for its customers will serve the company well, if the price forecasts and actual operational costs are consistent with the PEA estimates. Combined with relatively modest initial production targets, AGC has a sensible and credible business model.

My thanks go to the AGC team for organizing the logistics of my visit, and to Don Baxter, Rick Keevil and Jesse Edmondson for hosting me during my time in Alabama.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Alabama Graphite Corp (AGC). Neither he nor Technology Metals Research, LLC received compensation from AGC or from anyone else, in return for the writing of this article.

Last month I paid a visit to the Miller graphite project in Canada, under development by Canada Carbon Inc. (TSX.V:CCB) in Grenville Township, Quebec. The Miller property was the home of a historical graphite mine in the latter half of the 19th century.

Grenville is situated 50 miles west of Montreal, approximately half way between that city and Ottawa. The journey from Montreal took about 75 minutes via Highway 50. Grenville is close to the town of Hawkesbury in Ontario, with the two sitting on opposite sides of the Ottawa River, which forms much of the boundary between the two provinces.

Generally I don’t visit a mineral project under development, until it has an associated mineral resource estimate that conforms to guidelines such as NI 43-101 or the JORC code. It’s the same criterion that I use for including projects on the TMR indices for rare earths and for graphite. A mineral resource estimate is a useful initial filter for discerning the evolution of technical knowledge associated with a given project. Miller does not have a mineral resource estimate yet; I had, however, heard about the unusual nature of the Miller project (which we’ll get into later) from a number of sources. I therefore decided to accept an invitation to come visit the property, to see for myself. Canada Carbon published a technical report on Miller in May 2014, which follows the NI 43-101 guidelines, in addition to other data associated with work on the project. This report did not include a mineral resource estimate.

I was hosted on my visit by Bruce Duncan, Executive Chairman and CEO of Canada Carbon. Also joining us were Steven Lauzier, the project geologist, and Rémi Charbonneau, a consulting geologist who is the Independent Qualified Person for the project.

The initial exploration work at the Miller property started in February 2013, with a ground survey to locate the original Miller Mine, and to confirm the presence of graphite veins and pods. Subsequent work consisted of additional ground and airborne prospecting work, identifying a series of anomalies via geophysical techniques such as small-loop frequency-domain electromagnetic (MaxMin), very-low frequency (VLF), induced polarization (IP) and versatile time-domain electromagnetic (VTEM) surveying. Significant anomalies of interest were then targeted for ground trenching, accompanied by core drilling.

The trenching work identified a number of graphite veins and pods throughout the property. The graphite can be found alone or associated with minerals such as wollastonite and pyroxene. It has also been found in disseminated form in marble and sulphide-bearing paragneiss, but the veins and pods are of primary interest because of their high grade and potential purity. Mr. Lauzier indicated that veins with grades of 40-80% carbon as graphite (Cg) and pods with grades of 10-15% Cg are common on the property.

Through the trenching work, the company identified three significant showings, designated VN1, VN2 and VN3, and which we visited in turn. The first of these, VN1, contains an irregular vein of semi-massive, coarse graphite, originally under 1-3 m of glacial till, along with pods of graphite mixed with wollastonite. The rocks here consist of banded paragneiss and marble units. The primary vein is exposed along a strike length of 12.8 m, with widths ranging from 10 cm to 1.7 m. Numerous secondary veins can be seen.

VN2 has a massive graphite vein up to 1.5 m thick, and numerous secondary veins and pods which follow the contact between the local marble and paragneiss rocks. Core drilling at this showing indicates that this contact is at least 39 m deep below the surface. VN3 is another massive graphite vein, some 2 m thick and 5 m long, hosted in unaltered marble. Six shallow cores were drilled at this site and the graphitic horizons were encountered below surface, confirming the initial event of the anomalies. You can see these showings in the images below.

Mr. Lauzier indicated that there are numerous additional graphite-wollastonite pods on the Miller property that have been exposed during trenching. The pods are pegmatitic in nature and generally occur in the contact zone between the paragneiss and marble. Numerous graphite veins have also been discovered as well. Mr. Lauzier commented that the graphite veins are likely the result of the transportation of carbon in hydrothermal fluids, which were channeled up through fractures in the rock over time. As the fluids cooled to 700-800 °C, the graphite was precipitated in large, highly crystalline flakes.

During my visit, on-ground grids for additional IP surveying were being prepared across the property.

So what is the big deal about this type of graphite? The formation of hydrothermal veins leads to the presence of very high-purity graphite and such occurrences are rare. The only current source in commercial quantities is the island of Sri Lanka. Once extracted, the graphite is relatively easy to process. The high degree of crystallinity in vein graphite (as a result of the way that it was formed), leads to thermal and electrical properties that are superior to the more typical natural-flake graphite, which forms from carbonaceous sedimentary deposits under heat and pressure. The most interesting and potentially lucrative applications for hydrothermal graphite materials, however, are in the nuclear industry.

So-called nuclear- or reactor-grade graphite is high-purity graphite that is used as a moderator material in thermal nuclear reactors that utilize uranium. Moderator materials are used to convert so-called fast neutrons into thermal neutrons during the fission process, which leads to a sustained (and controlled) chain reaction, and the liberation of significant quantities of energy. Reactor-grade graphite can also be used as a neutron reflector, which can be used to generate a chain reaction from a mass of fissile material that would normally not ‘go critical’ without the presence of the reactor material. In essence, it reduces the amount of uranium or other fissile material required, to sustain a chain reaction.

Because of the interaction of the graphite with neutrons during the nuclear process, it is vital that the material be free of impurities that will absorb neutrons. Boron is the most problematic impurity in this regard; reactor-grade graphite must have a boron, or equivalent-boron content (EBC), of less than 5 ppm. EBC is a measure of the collective effects that all impurities present have, on neutron absorption.

In June 2014, Canada Carbon announced the completion of purity testing on lump / vein graphite samples taken from the Miller property, indicating that a simple flotation process alone could produce graphite with purities of 99.8-99.9% total carbon (C(t)). With an additional simple thermal process, exceptional purities of 99.98-99.998% C(t) were achieved. Significantly, the EBC of the material after flotation concentration alone was 1-3 ppm, confirming that the material is nuclear-purity graphite, without needing hydrometallurgical treatment of any kind. Such material commands significant price premiums over more conventional natural graphite. Test results showed particularly low levels of sulfur in the graphite. The ease of upgrading via flotation would indicate that the impurities present are found at the surface of the graphite flakes, and not significantly intercalated or embedded in the material as is common with more conventional natural flake graphite. The company has published its assays on its website, so that calculated values such as EBC can be reviewed.

Miller is located on private land, whose owners entered into a surface-access agreement with Canada Carbon. Relations between the company and the land owners are apparently cordial; during the visit we met one of the owners, who is supervising the excavation of bulk sample materials from the site, on behalf of the company. Canada Carbon has permission to remove up to 480 t of materials from the property for processing in a pilot plant, to be built by SGS Canada Lakefield (SGS), and based on the aforementioned initial bench-scale flotation process, previously developed by SGS. The company is in the process of crushing and shipping the first 100 t of material from the site, and has until February 2015 to complete the rest of the sampling.

The property is well serviced logistically; In addition to Highway 50 and a power line which both cross the property, there is a rail line less than half a mile south of the highway and access to water via a river which also passes through the property.

The graphite veins and pods that are present at the Miller property make it highly prospective for the production of nuclear-grade graphite – but they also make it a real challenge to be able to produce a traditional mineral-resource estimate. Such estimates are typically derived from drilled samples taken across a project, with the mineral content found within the cores used to establish a 3D model of the geology of the deposit. This is fine in a deposit where the graphite or mineral of interest is disseminated spatially in the host rock; but when graphite occurs in highly concentrated veins and pods, drill results are likely to be ‘hit or miss’, with mostly ‘miss’.

This is one reason why the identification of graphite occurrences starts with electromagnetic and other geophysical surveying tools, followed by on-the-ground trenching; given the thickness of the initial veins and pods trenched, there should be little trouble in finding significant quantities of graphite on the project. Without a way to properly quantify that graphite however, within the wider project space, how does one move the project forward into a preliminary economic assessment or pre-feasibility study, which will comply with the requirements of NI 43-101? Just as important, how do potential future off-take partners develop a comfort level that the graphite will be there, in the years to come?

I put these questions to Mr. Duncan, who acknowledged the challenges right away. He commented that the unique nature of the deposit has already generated significant interested from end users, who are not only interested in the graphite for its potential nuclear applications, but also for other end uses where very high purity and / or crystallinity is an absolute requirement. He said that such end users are used to acquiring materials from Sri Lanka, where mining is conducting on a rolling basis; resources are identified and then put into a mining campaign with a one-to-two year horizon. As the known occurrences are depleted, new resources are identified by drilling and put into the queue for subsequent mining. Many airborne EM anomalies were found out over the Miller Property. An IP survey on anomaly E1 revealed many different conductive and chargeability anomalies. It appears that the Miller Property could contain sufficient newly discovered graphite occurrences to develop a model based on exploring and mining the discoveries as they are made, without developing a resource model for the property as a whole.

This approach does not necessarily lend itself well to traditional mine financing of course, but Mr. Duncan indicated confidence that the project could be bootstrapped into operation, with a combination of advances on future off-takes from strategic partners, and other non-traditional sources of financing, that do not necessarily require placements in the open market (and which would require greater detail in terms of mineral resource estimates and the like).

While SGS continues to process the initial 480 t of material from the Miller stockpile, Mr. Duncan said that the company will also continue with characterization and purity tests of the graphite material, provide samples for potential end users as well as advancing further exploration of the Miller property. Although he would not comment on capital expenditure estimates – due to regulatory compliance – the cost of mining graphite at the Miller property holds the potential to be comparatively low, versus a conventional open-pit graphite mine in a more remote location. Given the accessibility of the graphite veins, and their apparent thickness and shallow depth (and, in many instances, their location at surface), Canada Carbon’s extraction costs may be particularly low. If the thickness of the initial veins and pods trenched to date, is found elsewhere on the property, then significant quantities of graphite may be present.

Since my visit to the project, Canada Carbon has released additional test results that indicate that certain properties of the Miller lump / vein graphite match or even exceed those found in synthetic graphite. Both tap (bulk / unprocessed) and skeletal (actual) densities were shown to be close to that of synthetic graphite; the specific surface area and porosity levels of the Miller graphite were found to be significantly lower than for synthetic graphite, which is particularly desirable in the production of anodes for lithium-ion batteries. This combination of properties means that once commercially available, graphite produced from the Miller property may be able to command prices as high as $10,000-20,000 / tonne, based on recent cost estimates from the likes of Industrial Minerals and others for synthetic graphite.

The Miller property is clearly an unusual and possibly unique graphite project; and given the indications that lump / vein graphite sources in Sri Lanka are diminishing, a hydrothermal lump / vein deposit in North America would be highly attractive to numerous end users. The key challenge for the project will be to be able to put in place a financing structure that will allow the project to go into commercialization, without the benefit of establishing a minimum level of confidence in the size of the resource present, using the usual means of reporting. Nevertheless, if strategic and other partners can be persuaded to work with Canada Carbon on the basis of the excellent metallurgical results obtained to date, the project has a good chance of going into operation.

My thanks go to Mr. Duncan, Mr. Lauzier and Mr. Charbonneau for hosting my visit, and for numerous useful discussions.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Canada Carbon Inc. He did not receive compensation from Canada Carbon or from anyone else, in return for the writing of this article.

Earlier this month I had the opportunity to visit Round Top, the rare-earth-element (REE) project being developed by Texas Rare Earth Resources Corp. (OTCQX:TRER). While in the Lone Star State I also paid a visit to the University of Texas at El Paso (UTEP), where much of the processing and analysis work on the project has been undertaken.

The project is located in Hudspeth County in the far west of Texas, USA, approximately 85 miles southeast of the city of El Paso. The nearest town is Sierra Blanca, 8 miles to the southeast of the deposit, with a population of around 560 people and where Texas Rare Earth Resources (TRER) has an office. The border with Mexico is nearby, some 10 miles to the south.

Round Top is one of five peaks that make up the Sierra Blanca range, the others being Triple Hill, Sierra Blanca Peak, Little Blanca and Little Round Top. According to TRER’s most recent Preliminary Economic Assessment (PEA) report (published in December 2013), these peaks are rhyolite laccoliths – intrusions of magma that have welled up between layers of Cretaceous sedimentary rock to formed domed structures. The topmost layer of sedimentary rock has eroded over time, resulting in the present exposed rhyolite formations.

The deposit is just 3 miles north of I-10, the interstate highway that starts in Santa Monica, California in the west and which finishes in Jacksonville, Florida in the east, passing through El Paso, San Antonio and Houston in Texas along the way. Round Top is therefore highly accessible by road. Sierra Blanca sits at the intersection of two branches of the Union Pacific railroad. There is an active rail spur that terminates less than three miles from the base of Round Top Mountain, serving a local company, RCL Rock, which mines an average of 6,000 t / day of similar rhyolite for railroad ballast.

My hosts for the visit were Dan Gorski, CEO and director of TRER, and Tony Marchese, chairman of the company’s board of directors.

Round Top is more than a mile across at its base, with a peak approximately 300 m (1,000 feet) above the desert plateau, which is itself approximately 1,300 – 1,400 m (4,270 – 4,600 feet) above sea level.

As part of the recent PEA report, TRER published an updated NI 43-101 compliant mineral-resource estimate for Round Top. The deposit contains an estimated 231.0 Mt of rare-earth mineral resources at the Measured level, with an average grade of 0.06 wt% total rare-earth oxide (TREO), 298.0 Mt of resources at the Indicated level, with an average grade of 0.06% TREO, and an estimated 377.0 Mt of resources at the Inferred level, with an average grade of 0.06% TREO. Each of these estimates used a cut-off grade of 0.0428% yttrium (Y).

You can see photos taken during my visit, below – just click on the thumbnails to see the full images.

In total there are an estimated 573 kt of TREOs in the Round Top deposit, with an average heavy REO (HREO) distribution of 72% of the TREOs present. In addition to the presence of REEs, the project is of interest for by-products of beryllium (Be), lithium (Li), niobium (Nb), tantalum (Ta) and uranium (U).

The first (and an admittedly blunt) question that I asked Mr. Gorski concerned the grade of the deposit. Given the low concentration of REEs at Round Top, compared to other deposits, how could future production hope to be economic – despite the proximity to infrastructure and a large pool of labor? Mr. Gorski explained that despite that relatively low grade, the distribution of the main REE-bearing mineral variety yttrofluorite was highly uniform across the deposit. Furthermore, tests at UTEP had conclusively determined that the rhyolite host rock was highly amenable to leaching, despite the fine-grained nature of the rock.

Mr. Gorski explained that once mined, the material at Round Top would be crushed into pellets, approximately 6-13 mm (0.25-0.5 inches) in diameter, before being placed onto leach pads. The pellets would then be treated with an 8 vol% dilute solution of sulfuric acid in water, which after having time to percolate through the pellet heaps, would leach the REEs and other metals of interest into solution. A series of tests at UTEP on the process achieved recoveries of over 90% of the yttrium (Y), dysprosium (Dy) and other HREEs present via this leaching process. These tests were confirmed in independent contract laboratories.

This amenability to leaching would eliminate the need for a flotation processing step, considered by a previous incarnation of the TRER management team in the initial PEA for Round Top, which was published in June 2012. Mr. Marchese commented that the updated PEA saw a dramatic drop in the estimated initial capital expenditures (capex) for the project from $2.1B to $292M, and sustaining capital from $860M to $553M. The PEA determined a pre-tax Net Present Value of $1.4B at a 10% discount, and an IRR of 67%. I note that these numbers use a conservative REO price deck that is based on current spot prices for these materials, instead of the rather optimistic prices that most REE project-development companies have used in the past couple of years.

Unit operating expenditures would be similar ($14.59 / t mined rock in the initial PEA compared to $15.16 / t mined rock in the updated PEA), despite a reduction in throughput from 80,000 t / day to 20,000 t / day of mined rock. TRER plans to produce approximately 3,200 t / year of separated REOs, with an anticipated initial mine life of 20 years. The proposed pit would focus on the northwest portion of Round Top, with rock sent to the leach pads located north of the deposit, via conveyor. This constitutes approximately 18% of the overall mineral resource, giving the project a potentially long life beyond the initial plan.

90-95% of the rock consists of the minerals quartz and feldspar, which do not react to the leaching solution. The remaining 5-10% of the rock consists of fluorites fluorides such as yttrofluorite and cryolite. Urananite, thorite and coffinite are also present, which contain thorium (Th) and uranium (U). In the rock as a whole Th levels are approximately 179 ppm and U levels are approximately 45 ppm. The rock also contains Li-rich mica, and there is evidence of Be too, though it has yet to be determined just where in the mineral assemblage this element is located. Other accessory minerals include columbite (containing Nb and Ta) and zircon (containing zirconium and hafnium).

The iron (Fe)-bearing mineral magnetite is also present in the rhyolite rock, with some of this mineral having been altered over time to form hematite, giving some of the rhyolite a pink-red color. Hydrothermal or groundwater alteration gives other sections of the rhyolite a tan to brown color.

Once leached, the pregnant solution would be subject to a multi-stage process to remove undesirable elements such as Fe and aluminum, before being subject to solvent extraction (SX) as a means of separating and purifying the concentrate, resulting in individual REOs. According to the PEA, overall recoveries of the REEs after heap leaching, separation and purification include 80% for Y and 76% for Dy. There is little detail in the PEA about the SX processes proposed for the operation, and TRER did not get into much detail on the process, though I was told that the costs of the associated SX facility (approximately $93M) are included in the overall capex estimate.

The first documented exploration in the vicinity of Round Top took place in the 1970s, when fluorite fluoride deposits and Be mineralization where identified near to Sierra Blanca Peak. In the 1980s Cabot Corporation and Cyprus Metals initiated exploration for Be at Round Top, Sierra Blanca Peak and Little Round Top. At this point the Texas Bureau of Economic Geology conducted its own extensive exploration of the Round Top area and vicinity. Associated studies in 1987, 1988 and 1990 identified REE mineralization for the first time, at Round Top.

In 2007, the predecessor to TRER, Standard Silver Corporation, acquired prospecting permits from the GLO and discovered large numbers of documented drill samples in an exploratory decline into Round Top, created by Cyprus Metals during their previous work. These samples were re-logged and analyzed as part of the most recent PEA for Round Top. Subsequent drill programs by TRER commenced in 2010. The core samples are currently stored in a large warehouse building in the vicinity of Round Top; we did not visit the building or examine core samples during the visit.

The Round Top deposit is located on land owned by the state of Texas. In 2011, TRER entered into renewable 19-year leases with the state General Land Office (GLO) totaling some 380 ha (950 acres) of land including Round Top and the vicinity. The associated mineral leases come with a statutory 6.25% royalty to the GLO, on the gross profits of all minerals that are commercially produced at the site. In addition, TRER owns the surface lease to approximately 22,300 ha (55,000 acres) of land around Round Top, and also holds more than a dozen prospecting permits on land elsewhere in Hudspeth County, covering approximately 2,900 ha (7,100 acres).

Close to the base of Round Top, on land accessible to TRER are abundant quantities of Del Rio clays, and Finlay limestone. Mr. Gorski explained that the former will be highly suitable for the production of the heap leach pads at Round Top; the latter will be suitable for neutralizing the acids used, once the leaching process has been completed. Their proximity will save significant costs in terms of the purchase and transportation of such materials, to the future project site.

TRER works closely with Nicholas Pingitore at the Department of Geological Sciences at UTEP, located 90 minutes northwest of Round Top. Dr. Pingitore is a professor in the department, focusing on analytical geochemistry and is Director of the Electron Microprobe Laboratory at UTEP. Dr. Pingitore is also a director of TRER. We paid a visit to his laboratory at UTEP, where he and his researchers have been working on various aspects of the Round Top deposit, and its amenability to processing.

Dr. Pingitore does a nice demonstration of just how permeable the rhyolite rock is, and thus amenable to leaching. Taking samples of the rhyolite that have been sectioned into different thicknesses, he adds a couple of drops of blue ink to the top surface. Within minutes, the ink appears on the other side of the section, with little expansion of the original diameter of the drops applied on the initial side. In other words, the ink penetrates “straight down” with gravity, to the other side, relatively quickly.

Dr. Pingitore noted that the minerals of interest in the rhyolite are very soluble, and that there is enough porosity (typically 3-5%) to allow aqueous solutions to soak through the rock with ease – but not so much porosity that it would do so too quickly, without dissolving the minerals of interest. The work now focuses on obtaining an optimum pellet size for the heap leaching process. I asked him what the rate-determining step or steps would be for the leaching process. He indicated that the key was how fast fresh acid diffuses through the thin films of leach solution that permeate and soak the rock particles, and thus dissolve more and more of the microscopic yttrofluorite grains. Likewise, diffusion of the liberated REEs in the opposite direction, out of the rock particles via those liquid films, also limits the rate at which the overall heap leaching proceeds.

Given the rather unusual composition of the rhyolite rock at Round Top, Dr. Pingitore conducted experiments at the Stanford Synchrotron Radiation Lightsource, part of the Stanford Linear Accelerator in California, to determine which mineral or minerals host the Y and other HREEs. By probing the atomic structure surrounding the Y in bulk samples of the rhyolite, with powerful synchrotron-generated x-rays, Dr. Pingitore said that it became evident that essentially all of the Y, and by proxy the HREEs, is hosted in yttrofluorite, substituting for some of the normal calcium atoms. Dr. Pingitore and Mr. Gorski were co-authors of a paper that detailed this characterization work, in addition to the leaching experiments on the Round Top rhyolite, published in the Chinese Society of Rare Earth’s Journal of Rare Earths in January 2014.

The laboratory at UTEP houses the usual high-end analytical equipment, including an inductively coupled mass spectrometer (ICP-MS) capable of detecting metals in solution to 1 part per trillion or better. It also houses an X-ray fluorescence (XRF) analyzer, for testing solid samples. The latter is particularly useful for quantitative leach testing; XRF analysis is conducted on powders ground and pressed into pucks, from rhyolite pellets that were crushed to various sizes and then subject to different leaching regimens. The XRF profile for each sample is compared to the untreated base case; the XRF curves for each sample can be superimposed on the base case and where REEs and other metals have been removed via leaching, this shows as reduced (or eliminated) XRF peaks for the specific element in question. These peaks are proportional to the quantity of individual elements present. This method is a simple but reliable method of quickly determining the effectiveness of the various leaching parameters used (see the images below for more detail).

Under a joint UTEP-TRER research contract, TRER provides funds for supplies, equipment usage, support personnel and the like for the laboratory investigations. Dr. Pingitore does not receive a salary or other direct or indirect financial benefit in this arrangement, and TRER confirms significant findings at one or more contract laboratories.

In addition to the geochemistry of the rhyolite rock, Dr. Pingitore has also looked at the compositional data from all of the samples taken during previous drilling campaigns at Round Top, and plotted them against depth (see the images below for more detail). By using the primary data points, rather than statistics derived from them, one can quickly see that there is little geographic variation of concentration of the individual REEs in the deposit – i.e. little variation from one drill hole to another. There is also no trend with depth, either; these plots indicate that there is consistent grade of REEs from the top to the bottom of the Round Top deposit, making it unusually uniform in distribution.

At over 4,570 square miles in area, Hudspeth County is larger than the states of Delaware and Rhode Island combined, yet has a total population of only 3,500 people per the last census. During my visit I chatted with Laura Lynch, Executive VP for External Affairs at TRER and a director of the company, about the potential impact of the Round Top project on the local community.

Ms. Lynch pointed out that the county is the poorest and sparsest populated in Texas, with a median income in the country of approximately $13-15k / year. Compare this to the median salary of approximately $50k / year that TRER anticipates will be paid to employees of the future Round Top operation. Ms. Lynch commented that these jobs (up to 150 in total) are just one reason why TRER has received very significant local support to date. Mr. Gorski further commented that wherever possible they plan to hire local people for the project, such as the folks at RCL Rock, or people currently living in the town of Sierra Blanca.

As a local land owner and as someone raised on a ranch herself, Ms. Lynch said that children in these rural areas learn a wide range of mechanical and other practical skills as they grow up, which could be put to good use at the Round Top operation. Other local landowners have commented that they welcome the development of Round Top as a means of potentially attracting their children and grandchildren to return back to the area, having had to leave for other places to find work. Having their family back in the area increases the chances of the ranches staying in the respective families in the future. This is of course a natural desire for the current land owners, who wish to leave a legacy to future generations of their families, with these properties being managed and operated tomorrow, in the same traditional ways as they are today.

Ms. Lynch commented that the 6.25% royalty on GLO mineral leases is used to fund the public school system in Texas. The anticipated $500M in royalties that this represents from Round Top, over the initial 20-year life of the mine, effectively gives the state of Texas a vested interest in the success of the Round Top project. The ongoing collaborative work at UTEP may grow and become even more significant as the project progresses, too. There is strong support for TRER’s endeavors elsewhere in El Paso outside of UTEP too. During my time in El Paso we had the opportunity to meet Robert Wingo, a local El Paso businessman, entrepreneur and UTEP alumnus who recently joined TRER’s Advisory Board to help the company work more closely with the El Paso business community.

Mr. Marchese noted that as a result of the Round Top deposit being on state (not Federal) land, the route to permit approvals for the project has the potential to be more straightforward, than if the company had to deal with Federal Bureau of Land Management or US Forestry Service land.

As the name of the company implies, TRER is very much a Texas company, focused on developing a Texas resource to the benefit of its shareholders, as well as the local and regional community. A key step for the company was teaming up with UTEP as this has helped them to advance the leaching work significantly. The company continues to work with third parties such as RDI, Gustavson Associates and Lyntek in Denver on the specific design of the scaled-up leach processes, as well as to optimize the extraction and purification process for the pregnant leach solution, once produced. Obviously the most critical question for the company is whether or not they can do that heap-leach process in a cost-effective and environmentally sustainable manner. All indications are that they are on the right path to figuring that out.

During a conversation with Mr. Marchese, he commented that one of TRER’s biggest challenges is getting people past the idea that just because a REE project based on rhyolite has not been commercialized before, does not mean that it can’t be done in the future. I have to agree with him on this point. At the end of the day each project has its own unique characteristics, and will ultimately live or die on its own merits or shortcomings. The HREE industry in southern China has clearly demonstrated that low grade is not necessarily an impediment to economic production, if the processes used to extract the REEs are simple and cost effective. If you can produce a range of products for less than the market is willing to pay for them, you have yourself a business. It will be for TRER to demonstrate that it do just that, and I for one will be most interested to see how they do.

My thanks go to Mr. Marchese and Mr. Gorski and their colleagues at Texas Rare Earth Resources Corp., for facilitating the visits to Round Top Mountain and to the University of Texas at El Paso.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Texas Rare Earth Resources Corp. (TRER). TMR’s Jack Lifton is a director of TRER. Neither Gareth nor Jack received compensation from TRER or from anyone else, in return for the writing of this article.

A couple of weeks ago I had the opportunity to visit the mini-pilot plant set up by Quest Rare Minerals Ltd. (TSX:QRM, MKT:QRM) for materials that come from their Strange Lake B-Zone project in northern Quebec. The plant, in Mississauga, Ontario, is hosted and operated by Process Research Ortech Inc, in conjunction with the process metallurgists on staff at Quest. The initial front-end work for the Strange Lake B-Zone flow sheet was completed at the bench scale in 2012 by Hazen Research Inc. at their facilities in Golden, Colorado. The purpose of the mini-pilot plant is to confirm the bench-scale results under continuous processing conditions.

The materials being tested come from two distinct bulk material samples from the deposit; the first is a composite that represents the materials that will be mined during the first 10 years of production at Strange Lake. The second is derived from materials that will come during subsequent production years.

The host rock at Strange Lake is a peralkaline granite; the rare-earth elements (REEs) present in the deposit are primarily found in silicate minerals such as allanite, zircon and gittinsite. Most of the undesirable minerals present are also silicates, such as quartz and feldspar; there are few phosphate minerals present.

The initial Hazen flow sheet which is being tested in the mini-pilot plant utilizes a so-called acid bake water leach (ABWL) process. Material retrieved from the Strange Lake deposit is crushed and ground to particle sizes of 40 µm or less, using a ball mill. It is then blended with sulphuric acid before being heated in a kiln at a temperature somewhere in the range of 150-350 °F (65-175 °C). The small particle size is required to ensure effective reaction kinetics with the acid during the process. This results in a thermal sulphation process and the formation of mixed REE-Nb-Zr sulphates.

Lumps of the calcined or dried materials are broken up before being put into an agitator tank with water, to dissolve the desirable sulphates into water, at room temperature. Approximately 10% of the previously calcined materials dissolves into the water to form a pregnant leach solution (PLS), with the remaining residues being filtered and removed.

Much of what goes on at the Quest mini-pilot plant is understandably proprietary and thus commercially sensitive. As a result no photographs or videos may be taken inside the facility. The company provided the photographs shown below (click on the individual thumbnails to expand). I can confirm that all of the equipment and materials shown in the photographs were present at the facility during the tour.

The proposed flow sheet for Strange Lake is as interesting as it is unusual. At present it does not include a beneficiation stage, which is typically required for rare-earth (and other) projects, for upgrading the initially mined materials into a mineral concentrate, prior to cracking and leaching to form a PLS. The aim of such beneficiation is the reduction in the mass of materials that goes through the subsequent processing steps, thus reducing processing costs. If however the metals of interest can be leached from the minerals with high recovery rates, without pre-concentration, a flow sheet without beneficiation may be considered. The economics of the process will ultimately dictate whether or not beneficiation is required.

Per Peter Cashin, Quest’s President & CEO, Hazen has conducted physical beneficiation tests, including gravity and magnetic separation work. A flotation test program was also completed at the Research & Productivity Council facility in Fredericton, New Brunswick. Initial results from these tests indicated that mass reduction was achievable, but that it was at the expense of subsequent recovery rates. For this reason, to date initial beneficiation steps have not been included in the proposed flow sheet, so that recovery rates can be conserved. The trade off will be that higher processing rates via ABWL will be required, to produce the amounts of PLS required for the subsequent process stages.

Sulphuric acid is consumed at a rate of approximately 180-220 kg / tonne process material. Quest’s mini-pilot plant is currently testing an acid-recovery circuit, as a means of taking unreacted acid, cleaning it up and putting it back into the process. Such circuits are required so that operating costs can be reduced.

To date, the ABWL phase of the mini-pilot plant has been able to extract 85-90% of the REEs, 72-78% of the Zr and 90-95% of the Nb present. This compares to recovery rates of 87-93% of the REEs, 85-90% of the Zr and 93-96% of the Nb during the bench-scale testing by Hazen.

Once the PLS has been produced, it then goes to a solvent-extraction (SX) circuit within the mini-pilot plant, for the extraction of Zr. Quest’s process metallurgists indicated that they plan to optimize each individual SX circuit before moving on to the next. Each initial test is typically run for around four days continuously; once the circuit appears to have been optimizes, the parameters will be tested continuously for at least two weeks.

At present, approximately 100 kg / day of PLS is being processed through the Zr SX circuit, which results in the capability of producing approximately 1-2 kg of ZrO₂ / day. ZrO₂ has been consistently produced in the mini-pilot plant for some time now. Recoveries of 93-98% of Zr have been achieved in the SX circuit, compared to 96% recoveries at the bench scale.

The next step is for the PLS to be pH adjusted, before passing through the Nb SX circuit. The equipment required for Nb SX testing has recently arrived at the facility and is in the process of being set up. The production of Nb₂O₅ has previously been achieved at the bench scale, and the process metallurgists will scale up and optimize those processes as appropriate.

During the previous bench-scale work, the remaining PLS from the Nb SX circuit was processed to remove the uranium (U) and thorium (Th) present, before precipitating out a mixed REE oxalate compound. Prior to being dissolved into the PLS, there is approximately 70 ppm U and 300-400 ppm Th present in the feedstocks. Once removed, the grades of Th and U present in the future tailings will be lower, because of the addition of neutralizing materials such as lime.

According to Mr. Cashin, the equipment for testing U & Th removal and for precipitation of the REE oxalates will be ordered soon. He said that the mini-pilot work should be completed in April or May, followed by demonstration-scale piloting work at a rate of 500-1,000 kg / day continuous throughput, for an additional 3-6 months of operation. He indicated that the overall budget for the existing and future process stages of the mini-pilot plant described above, is approximately $1-2M in capital expenditures and $250k / month in operational expenditures. In addition to the aforementioned Nb SX work, U – Th removal and mixed REE oxalate precipitation processes, and scaling up of the existing processes, planned future test work for the materials from Strange Lake include an ongoing bench-scale program to define processes for the separation of individual REEs.

I was impressed with both the Process Research Ortech facilities in Mississauga, and Quest’s mini-pilot plant itself. A methodical approach to the verification of bench-scale test results is vital to the progression of projects like the one at Strange Lake. The combination of the Phase II metallurgical work previously conducted by Hazen in Colorado, and the piloting work in Ontario, should stand Quest in good technical stead as they move their project forward.

My thanks go to Peter Cashin for facilitating my visit to the mini-pilot plant facility in Mississauga.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Quest Rare Minerals Ltd. (Quest). Neither he nor Technology Metals Research, LLC received compensation from Quest or from anyone else, in return for the writing of this article.

During a visit to Australia last month, I had the opportunity to visit the Commonwealth Scientific And Industrial Research Organization (CSIRO), the country’s main governmental organization for scientific research and development. More specifically, I visited CSIRO’s Materials Science & Engineering Division in Lindfield, New South Wales, about eight miles north of Sydney.

CSIRO is well known in many parts of the international scientific community for the quality of its work. It has its origins in the Advisory Council of Science and Industry which was founded in 1916. Today CSIRO has over 6,500 staff (approximately 5,200 full-time equivalents or FTEs) who work at 56 sites in Australia and overseas. While folks outside of Australia may not be too familiar with CSIRO, you undoubtedly are a beneficiary of some of its work; inventions at CSIRO include the underlying technology behind Wi-Fi systems, phase contrast imaging for X-ray imaging and atomic absorption spectroscopy. The organization had an annual budget in 2012-2013 of approximately AUD 1.6 billion.

Materials Science & Engineering at Lindfield (the Division also has sites in Victoria) shares a building with the National Measurement Institute (NMI), Australia’s top body responsible for maintaining Australia’s measurement standards. I had to chuckle when I arrived in the lobby of the building – on the wall opposite the front entrance are a couple of clocks which show VERY precisely the time at that moment – no excuses for being late in this building! I later found out that it was here at this location, in a collaboration between the NMI and CSIRO’s Australian Centre for Precision Optics (ACPO), that a pair of extremely round objects were created and measured, as part of the international Avogadro project. This is an initiative centered on developing a new way of defining the kilogram, the SI unit of mass. Unlike all of the other fundamental SI units of measurement, the kilogram is the only one that is defined as a comparison to a physical object. The NMI / ACPO project set out to produce two perfect spheres of pure, single-isotope silicon, containing enough atoms to make a kilogram. The idea is for other researchers to then measure the number of atoms in these spheres, in order to re-define the kilogram. The best sphere that the scientists achieved as part of the project had an out-of-roundness of just 35 nanometers – less than 150 times the diameter of a single silicon atom!

My visit to the Lindfield facility was hosted by Dr. Stephen Collocott, a long-time researcher in the field of magnetic materials and applications. I first met Dr. Collocott at a magnetic-materials conference many, many moons ago. We’ve been corresponding and bumping into each at conferences and workshops ever since. It was great to finally get to visit him on his home turf and to learn more about the work that he and his colleagues do at CSIRO.

Dr. Collocott wears two hats these days; he is the group leader for magnetic materials research at CSIRO’s Materials Science & Engineering division; he is also the stream leader for electric drive systems, within CSIRO’S Future Manufacturing Flagship initiative. These Flagships bring together multi-disciplinary teams to focus on key research themes. Dr. Collocott’s group has for years been involved in the application of magnetic materials to real engineering systems, and so is a natural fit for the Future Manufacturing Flagship. The group frequently conducts contract research for OEMs and other companies in the manufacturing, automotive, appliance and general transportation sectors. Past and present clients include GM Holden (both CSIRO and GM Holden are members of the Co-operative Research Centre for Advanced Automotive Technology), Electrolux, Marrand Enginering, and Transfield. The group, presently consisting of eight researchers, has particular expertise in electric machine design using 2D and 3D FEA, power and control electronics and machine simulation.

The magnetic materials group at CSIRO was involved in some of the early work to characterize and optimize neodymium (Nd)-based permanent magnet alloys (Nd-Fe-B). In the early 1990s, a spin-out company called Australia Magnetic Technology (AMT) actually set-up to manufacture approximately 50 tonnes / year of these materials in a pilot plant for the Australian market. Plans to scale up production were put on hold indefinitely due to falling prices at that time, as a result of the growth of Chinese magnet companies. AMT was eventually acquired in 2003 by AMF Magnetics, another Australian magnetics company.

The CSIRO magnetics group continued with its materials research work, being involved in the subsequent discovery of so-called 3-29 rare-earth intermetallic phases for possible permanent magnet applications. They were also involved in melt spinning, mechanical alloying and hydrogen-based processing of rare-earth-based materials, as well as powder metallurgy. This work eventually evolved into looking at more fundamental questions concerning magnetic materials, relating to, for example, the role of dysprosium in increasing the resistance of Nd-Fe-B magnets to being demagnetized (coercivity). The purpose of such research was to increase understanding of the underlying mechanism in such materials, rather than creating incremental improvements in specific magnetic alloys.

The group then turned its attentions to the use of magnetic materials for specific end-use applications, building on the industrial collaborations that it had fostered over the years. These days the focus is on high torque density and high power density electric drives, based on brushless permanent-magnet machines as well as switched-reluctant machines that use no magnets at all. The idea is to provide the best machine required for the specific application being developed and refined. Examples of such applications include drives for electric vehicles and for more energy-efficient (and lower cost) consumer appliances such as washing machines. Some of the group’s machines have been used in ultra-long distance races for solar-powered vehicles, where the ultimate in efficiency and reduced weight is required. Being able to meet or exceed the specifications for such challenging applications helps to spur the wider development and utilization of such devices for commercial applications, just as innovations that we see in, for example, Formula One racing cars eventually make their way into the mainstream some years later.

During my visit I got a chance to tour Dr. Collocott’s group laboratories; as you might imagine, a number of the projects are sensitive (commercially or otherwise); I was allowed to take some photos though, which can be seen by clicking the thumbnail images above. I saw some really interesting electric devices and equipment under development, but I think my favorite device of the ones that I was shown was a more energy-efficient electric sheep shearing device. This tool uses an Nd-Fe-B magnet, and dissipates heat by using the blood flow in the operator’s hand, without him or her noticing the device getting warm. A very clever and elegant way to improve a long-established tool used in one of Australia’s quintessential industries.

Dr. Collocott commented that 60% of the CSIRO budget comes from government funding; the rest is drawn from contract research, royalties and licensing fees from previous technology, as well as cooperative entities. The organization has a number of ongoing research programs in collaboration with groups outside of Australia. One example in which Dr. Collocott is involved is with the University of Shanghai. He commented that quite often, Australian-based researchers are seen as “honest brokers” when it comes to their perspective on matters pertaining to strategic materials. This reinforces similar comments that I’ve heard from others too, from entities that would rather work with Australian than US or even Canadian groups, for this reason.

That said, CSIRO as a whole has strong collaborations with partners in Canada and the USA, with dozens of projects undertaken each year. Canadian projects tend to focus on minerals, mining, mineral resources and related engineering services. Recent partners include Alcan, COREM, Barrick Gold, Riot Tinto Alcan and Syncrude. Incidentally, CSIRO has a Minerals Down Under Flagship which builds on the organization’s expertise in these areas (most notably on extraction and separation), based at a CSIRO facility in Clayton, Victoria. US-based partners include Boeing, Chevron, DuPont, NASA, the US Department of Agriculture, the National Oceanic and Atmospheric Administration. According to the CSIRO web site, other initiatives include the Fulbright CSIRO Postgraduate Scholarship, established in 2008 to enable an American citizen to undertake postgraduate research in Australia at a CSIRO institute.

The strong Australian dollar has been an ongoing issues from the economic perspective, since it hurts the country’s ability to export products that it manufactures. As a consequence there has been a lot of off-shoring to Thailand and Malaysia, primarily because of free-trade agreements in place with these two countries. The once strong electrical appliance industry in Australia has largely disappeared, with some exceptions, namely in the large refrigeration and commercial cooking appliance markets. There has been 15-20% decline in the manufacturing of larger passenger vehicles in Australia; Toyota, General Motors and Ford still have a visible presence but are confined these days only to a handful of vehicles being manufactured in the country.

Still, it is through working with entities like CSIRO that the Australian manufacturing sector can re-group and prosper once again. CSIRO is undoubtedly a jewel in Australia’s crown, a jewel that hitherto now has not got a lot of whole lot of attention from strategic materials folks outside of the academic community. Folks in the rare-earths sector may have heard of the work and capabilities of ANSTO Minerals, another Australian government organization, with respect to process development; CSIRO also has extensive capabilities and experience in these and other related areas too and should not be overlooked. Groups like the one that Dr. Collocott leads can be a “below-the-radar secret weapon” for manufacturers, who need high quality contract research done by folks who know what they are doing.

My thanks go to Stephen Collocott for facilitating my visit to the CSIRO Materials Science & Engineering Division.

A milestone was reached by Lynas Corporation last Wednesday, February 27, 2013, at the company’s Lynas Advanced Materials’ Plant, known as the LAMP, when the plant’s solvent-extraction (SX) system produced the first results of its initial run, 200 kg of SEG (samarium-europium-gadolinium) carbonate. The next day La-Ce (lanthanum-cerium) mixed carbonates were delivered by the system. Finally the system will deliver – and may have already delivered – mixed neodymium-praseodymium carbonate, also known as didymium in the rare-earth trade. The system is designed to produce 30 tonnes a day of products when operating at full capacity. It was announced that the system will be capable of running at full capacity by June 30, 2013; it was also announced that Phase II of the system, an additional 11,000 metric tons per year of capacity, will be in operation by Sep 30, 2013.

The campaign (the length of time from loading the plant with a mixed concentrate to the delivery of the designed product(s)) was 90 days, I was told. The sequence in which the product(s) come out is due to a process-flow design that maximizes the separation and minimizes the time required to carry it out. LAMP takes mechanically beneficiated ore concentrates from Australia, roasts them and then extracts the rare-earth elements (REEs). It then converts them to a chemical salts solution, which is then fed into the solvent-extraction (SX) system to separate the individual rare earths into chosen combinations or individual elements according to customer specifications.

I hope that it is obvious that although an SX system operates in a linear fashion, it separates the REEs from each other in an order, which is not necessarily linear, i.e. it doesn’t do so by delivering its output in the order in which the REEs appear in the periodic table of the chemical elements. The process chemistry at LAMP is in fact designed to meet customer specifications for mixtures of La and Ce for the fluid cracking catalyst (FCC) manufacturers for the oil industry, cerium oxide for glass polishing, and didymium for the REE permanent magnet industry. The mid-range REEs, the SEG fraction, and the heavy REEs, the HRE fraction, are from LAMP produced as (mixed) concentrates to be processed separately and at the present time elsewhere.

LAMP is now in the ramp-up phase to prove that it can operate at full capacity in Phase I. This is the process that all such chemical engineering plants must go through, and it is NORMAL and looks, to me, as an outsider, as if it is going very well.

The open issue now is not chemical engineering, but marketing. The plant became operational behind schedule not because of technical issues but rather due to political ones. An environment activist group claimed first that the LAMP would release too much radioactivity, and would not be able to manage this waste. This argument has been overcome by multiple expert panels and site surveys and finally by the Malaysian courts and government, so the anti-Lynas group has now switched to the cry that the plant will emit toxic chemical wastes (as well as radioactive ones).

This argument falls flat with regulators who have noted that the industrial park in which the LAMP is located, also has large operations of BASF, W.R. Grace, and Tennessee Eastman, all three of which process immense volumes of oil and organic chemicals to make plastics, organic intermediates, and pharmaceutical intermediates. A spill from anyone of those plants would be far more toxic than ANYTHING that could be leaked from the LAMP! Further the LAMP has triple-redundant spill control systems that are among the most impressive I have ever seen. I wonder if the LAMP’s Global 1000 neighbors are held to the same standards?

A national election will be held next month, and the anti-Lynas environmental faction is campaigning only for candidates who are willing to openly state their opposition the the LAMP. The “anti-” group recently commissioned a study by a well-known German industrial advisory group that without visiting the site condemned it as unsafe. This argument did not fly with the Malaysian Supreme Court which refused further injunctive relief to the “anti” group. The leader of that group threatened two weeks ago to “burn down the plant” if his group doesn’t get their way. The tragedy is that if this very deluded man, who is apparently a doctor of medicine, were to do any such thing the danger would be not from LAMP but from its surrounding Global 1000 chemical processing plants. Many thoughtful people in Malaysia who were supporting the “anti” group have now drifted away due to the irrational actions of the group’s founder.

The management and the on-site chemical engineering R&D group answered all of my questions this time as they did last time I visited in May 2012. They wouldn’t disclose the proprietary extractants they use or the process parameters, but I did not expect them to.

I was extremely impressed by the professionalism of the management and of the technical support staff. Of the 400 staff currently at the plant I would say that 99% were Malay nationals along with, as far as I could see, one Australian (Lynas VP – Technology) and one Chinese national who has applied for Malay citizenship (she formerly worked in Baotou and is the Chief Research Engineer). The managing director is Malay who is an impressive individual in his demonstrated ability to manage both the plant and the company’s relationships with the local people (among whom he now resides) and the political opponents and the local and national politicians.

The LAMP plant had process design assistance from Rhodia China but it was built and is operated by Malaysian contractors and employees.

Lynas has just announced that it will sell up to a certain portion of the LAMP’s output preferentially to Malaysian companies that want to further process the rare earths and use the downstream products to make end-user products. I think we are seeing the seeding, thereby, of a Malaysian total rare earth supply chain.

Lynas told me that the LAMP will be profitable even if the prices of the rare earths decline beyond current levels, because it was designed to be profitable in the 2009 price period. I believe that, and I wish them good luck in their Malaysian operations.

I note that on June 30 if LAMP reaches its goal of full capacity, then it will be the largest capacity REE separation plant on earth, and if it further reaches the Phase II capacity of an additional 11,000 metric tons per annum then it will be not only the largest RE separation plant in the world but the largest one ever built anywhere. Until and if Molycorp’s Project Phoenix is in the same stage as the LAMP, then the LAMP will be at least one-half of the non-Chinese world’s capacity to separate/refine light rare earths. Thus, at that time, Malaysia will be second only to China in RE separation capacity.

Disclosure: at the time of writing, Jack Lifton holds no shares or stock options in Lynas Corporation (Lynas), nor is he doing paid consulting for Lynas. Mr. Lifton’s visits to the Lynas facility have been as a guest of the Malaysian Academy of Sciences, which paid his travel expenses for those trips.

In June 2012, while passing through Sweden on my way to a magnets conference in Finland, I made a short detour to visit the Woxna Graphite Mine, the flagship graphite project of Flinders Resources Ltd. (TSX.V:FDR) and located at the site of the company’s Kringel graphite deposit.

The previously operating Woxna mine is located in central Sweden, approximately 5 miles from the town of Edsbyn. The capital Stockholm lies around 190 miles to the south.

Per the September 2012 NI 43-101 compliant mineral-resource estimate for the Kringel deposit, at a 7% graphitic carbon (Cg) cut-off grade, 1.5 Mt of the resource is at the Measured level @ 10.4% Cg, and 1.1 Mt is at the Indicated level @ 10.7% Cg. This results in an estimated 273 kt of Cg present in the deposit. Indications are that there is a significant fraction of the more desirable large-flake graphite at this site.

The Kringel deposit is actually one of four graphite deposits that form part of the Woxna graphite project, named after a local river and which is wholly owned by Flinders through its Woxna Graphite AB subsidiary. The Woxna mine is fully permitted with much of the previously operating mine and plant infrastructure still in place. Woxna Graphite AB produced some 13,000 tonnes of graphite per year at the Woxna mine, from 1996 until 2001, when the mine was closed and put on care and maintenance due to falling graphite prices.

The graphite produced included coarse (+160 µm) , medium (+75/-160 µm) and fine (-75 µm) flake materials. Size distributions within the graphite produced were typically 40%  @ +160µm, 28% @ +75/-160µm and 32% @ -75µm (all at up to 94% C).

Getting to the Woxna mine site was straightforward. After taking the train north from Stockholm to Söderhamn, I was met at the train station by Folke Söderström, Managing Director of Woxna Graphite AB. We took a 90-minute drive west towards Edsbyn and the mine site, and along the way we had the chance to discuss the Woxna project, its history and its place within the local community.

You can see photographs taken during the visit, in the galleries below (click on each image to enlarge it).

The mine site itself consists of an open pit, a processing facility and a tailings storage facility from past production. In addition to getting the mine back up and running, Flinders has invested resources since acquiring the project, to upgrade the historical graphite resource estimates, resulting in the initial NI 43-101 compliant estimates summarized above. My visit to the site coincided with a visit from Geoffrey Reed, a consulting geologist who is the independent Qualified Person for the Woxna project, who was also able to offer insight into the geology of the project.

The graphite mineralization at the Kringel mine occurs in two types. The A-type contains higher grades of graphitic carbon; the B-type has lower graphite content, and has relatively high concentrations of sulfides. The latter is more challenging to process because of the impurities present, and most of it was historically stockpiled during mining. Mr. Söderström indicated that the company plans to develop processes to be able to use B-type material. According to the resource estimate, the Kringel resource was drilled within an area that was approximately 1,200 m in length, by 100-200 m in width. Mineralization in the deposit was intersected by all drill holes, is present to at least 150 m below ground and is open at depth. The thickness of the mineralization was typically greater than 10 m, but varied between 5-25 m. Mineralization at Kringel remains open along strike too.

The host rocks in the vicinity of the Kringel deposit contain sulfides, meaning that they are naturally acidic. Indeed, initial measurements from the tailings pond indicate pH levels of 3-3.5, a significant level of acidity; the mine pit is partially filled with groundwater, with initial pH levels of 5-4.5. Mr. Reed commented that pH and water management for the project, both in terms of processing the graphite once mined, and subsequent safe disposal of waste materials, will be particularly important for the project. In the vicinity of the tailings pond are clarification ponds that were used previously to help control the pH levels of the water subsequently used in the processing facility.

The bottom of the pit is approximately 45 m below the adjacent surface. Recent calculations indicate that there is approximately 75 kt of A-type mineralization down to approximately 65 m below the adjacent surface. Mr. Söderström said that he planned to de-water the pit this coming fall (autumn), so that the company could get a better idea of how the pit was mined previously, and to begin new mining. The pit contains approximate 200,000 cubic meters of water. He also commented that they were looking to use strip and sterile areas on the property as feedstocks for road and berm construction, to reduce the cost of trucking in such materials.

Since my visit to the Woxna mine site, dewatering of the pit has begun. The water in the mine has been conditioned via the addition of lime, to increase pH levels and to ensure that it complies with the conditions of Kringel’s water discharge permit. Recent testing has confirmed that the water is within specification and so pumping of the water from the pit has now commenced.

The tailings areas from past mining are contained by two walls, known as the upper and lower dams. It is likely that some remediation work will be required for the tailings area, including sealing or otherwise preventing acidic run off from entering the clarification pond (known as acid mine drainage). There is some evidence that the tailings dams have leaked at some point, meaning that pH levels must be managed before water can be discharged from the mine site (in similar fashion to de-watering the pit). Characterization work at these tailings sites is ongoing, so that the geologists and mining engineers have a better idea of what they are dealing with, and so that they can satisfy environmental permitting requirements into the future.

Also on-site during my visit was Elin Ryosa, a geologist originally from the area, and who is working as the exploration and mine geologist for the project. She explained that the local geology at site shows development of trace to massive graphite in high-grade metamorphosed, metasedimentary and metavolcanic host rocks, which have been metamorphosed to sillimanite grade and intruded by felsic units, ranging from alkali pegmatite to granite. At Kringel, the geology is dominated by steeply-dipping, calcareous quartz-rich meta-tuff, with interbedded metasedimentary units and cross-cutting pegmatite. Two discrete tabular zones of graphite mineralization are developed and trace pyrrhotite (an iron-bearing mineral) is associated with the mineralised zone, its foot wall and hanging wall.

We were able to go out into the area surrounding the pit, where drilling was being undertaken for the mineral-resource estimate. Ms. Ryosa commented that in continuous zones the diamond drilling rigs could produce up to 25 m of drill core per shift, meaning that a single drill rig could complete a hole every day or so, depending on conditions. The area being drilled was quite boggy when we visited and small clearings have to be made in the forest to complete the work. The region of interest around the Woxna mine has a covering of moraine deposits from the last Ice Age that can be several meters thick in places. Because graphite and pyrrhotite are good electrical conductors, modern geophysical techniques make it fairly straightforward to detect the presence of graphite to significant depths.

We then took a look at the existing processing facilities on-site at the Woxna mine. When in production, Mr. Söderström said that the initial mining and crushing was historically undertaken by a third-party contractor, with the material being fed into rod and ball mills for subsequent grinding. The coarsest flake material was subsequently removed by flotation as well as spiral and vibratory tables for gravimetric separation.

The rest of the material went through additional cycles of grinding, milling and flotation. These materials were then filtered and dried, before being sieved into the coarse, medium and fine flake sizes described above, and then bagged for shipping. The original crushing equipment was removed from the facility when the mine closed, but otherwise all of the machinery from grinding to final packing remains in good order.

Mr. Söderström indicated that at some point in the life of the original mine additional milling equipment was acquired in order to better optimize the processes being used. However, restricted funds due to the low graphite prices at the time, meant that numerous opportunities to improve purity, large-flake recoveries and to reduce operating costs were unable to be pursued.

Interestingly, at the time of my visit there were approximately 500 t of previously processed graphite that had not been shipped before the original operations closed. Mr. Söderström indicated that the company was in the process of characterizing these stocks, with a view to selling them to end customers as a means of both generating some revenues and cleaning up the site. Since my visit, processing at the Woxna mine has been restarted, and production of graphite from these stockpiled materials is now underway. The entire supply has apparently been sold to customers in Germany.

Mr. Söderström said that the company has developed a good rapport with the people who live in the vicinity of the Woxna mine, and the other landowners. One of the first things that Flinders did on acquiring the project was to meet with the local residents, to introduce the management team, to explain what the plan was for the mine, and how that might benefit the local community (in contrast to the low-key approach taken by the previous owners of the mine). There is a local cooperative for landowners, which among other things organizes local road maintenance. As previously mentioned, the by-product of the mining activities at the Woxna site is suitable for road construction, and so could be used on local roads. It is important for Flinders to engage with this group on topics such as new water pipelines, road upgrades and so on.  An example of such projects is a proposed new road to connect the Woxna mine directly to the main road, bypassing the local community so that vehicles coming to and from the mine will not disturb the local people.

Speaking of water; the Woxna mine draws its power from a hydroelectricity power station on the Woxna river, and will continue to do so when back in operation. This station was built before the original mine was opened, to provide power to the entire district, which includes a number of lumber mills. Some of these mills are able to provide heating to the local district through the effective use of waste water, lowering heating costs. Mr. Söderström commented that the company might consider installing a wind turbine on site, or using forestry waste in boilers, to reduce energy costs.

Forestry companies own most of the land surrounding the Woxna mine; timber production has been the dominant industry in the region for many decades. Flinders is interested in acquiring some of the land surrounding the mine as part of the further development process, and to date there have been no obstacles to pursuing that course of action. The value of such land is typically based on the value and quantity of the timber that could be harvested.

The Woxna mine is located less than 10 miles from a rail line and the port of Söderhamn on the east coast of Sweden is 50 miles to the east. Getting graphite products to market, therefore, should present few logistical issues, as evidenced by sales of graphite in the past from this facility.

After visiting the Woxna site, I believe that Flinders is well on its way to getting this project back up and running, with relatively low capital expenditures required, compared to green-field graphite projects elsewhere. Since my visit, the company published the NI 43-101 resource estimate for the project and started reprocessing the aforementioned stockpiled graphite. They have also appointed Craig Griffiths, an experienced mining engineer, as General Manager for the mine, with him starting his work there later this month.

My thanks go to Martin McFarlane, President & CEO and his team, for organizing the logistics of my visit, and to Folke Söderström and his on-site colleagues for hosting me on the visit.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Flinders Resources Ltd. (Flinders). Neither he nor Technology Metals Research, LLC received compensation from Flinders or from anyone else, in return for the writing of this article.

In October 2011, I took a short trip to Sweden, invited by Tasman Metals Ltd. (TSX.V:TSM, AMEX:TAS, F:T61) to join an analysts’ tour of Norra Kärr, Tasman’s flagship rare-earth-element (REE) project in Scandinavia.

First things first: the Swedes spell the name of this mineral occurrence as ‘Norra Kärr’, not ‘Norra Karr’. This spelling renders the project’s pronunciation as something similar to “Nora Shah”, instead of “Nora Car”. The things you learn on the way to learning other things…

Norra Kärr is located 10 miles northeast of the town of Gränna, which itself sits on the shores of the beautiful Lake Vättern, Sweden’s second largest lake and found in the south central part of the country. The city of Jönköping and its 90,000 inhabitants are 30 miles to the southwest; Stockholm is around 200 miles away to the northeast. Norra Kärr is readily accessible from all parts of the country via the E4 highway that runs close to the deposit. And by close, I really do mean close; while standing in the middle of the deposit, we could hear the cars whizzing by on the highway. Clearly then, accessibility is a key positive for this mineral deposit, regardless of what might be present in the ground. Power and water are also available right at the site.

Having flown into Stockholm the night before, early the next morning the group piled into a couple of vans and cars, for the 3.5 hour drive to the project from the Swedish capital. I spent the journey in the company of Tasman’s Chief Geologist Magnus Leijd, and Yasushi Watanabe, the well-known senior geologist with the Geological Survey of Japan, and who was also along for the visit. This was an excellent opportunity to listen to the two geologists talk about the project, and for me to pose a bunch of layman questions, which fortunately they were both only too happy to answer.

Along with Mr. Leijd, our Tasman hosts included Mark Saxon, President & CEO, Jim Powell, VP for Business Development and Henning Holmström, Project Development Manager.

Norra Kärr is the only rare-earth project in mainland Europe with an NI-43-101-compliant mineral-resource estimate. Per the most recent numbers at the time of writing, Norra Kärr contains an estimated 60.5 Mt of rare-earth mineral resources, at an average grade of 0.54%, resulting in an estimated 327 kt of rare-earth oxides (REOs) present. In addition to the production of rare earths, the project is of interest for zirconium (Zr), hafnium (Hf) and possibly niobium (Nb) as well. Oxides of europium (Eu) through to yttrium (Y) make up 53% of the total REOs (TREOs) present, thus Norra Kärr has one of the most attractive TREO distributions of any rare-earth project with a defined resource. Despite the relatively low overall TREO grade in the deposit, the actual in-situ grades of dysprosium (Dy) and Y, two of the critical REOs (CREOs), are some of the highest of any defined resource.

All of these factors, combined with very low concentrations of thorium (Th) and uranium (U) (7 ppm and 14 ppm respectively), mean that the deposit is of high potential strategic interest.

You can see photographs taken during the visit, in the galleries below (click on each image to enlarge it).

Mr. Leijd indicated that the main minerals of interest at Norra Kärr are eudialyte (85%) and catapleiite (10%), and other minerals that closely resemble them. The latter is a Zr silicate not unlike eudialyte. Norra Kärr probably has the largest occurrence of catapleiite currently known in the world. As an aside, he made the interesting comment that the more intense the characteristic pink color is in a eudialyte sample, the less rare earths it contains, with the mid-brown eudialyte being preferred. The host rock consists of feldspar, nepheline and pyroxene.

There are few exposed outcrops at Norra Kärr; much of the surface is covered by so-called glacial till. Mr. Leijd mentioned that since much of Sweden has been covered in ice in the recent geological past (10,000 years, which is recent to a geologist), there are very few weathered rocks in the country. While this doesn’t sound all that important, its significance was pointed out to me.  The lack of weathering means that the rare-earth minerals are the same at surface as they are at depth in the Norra Kärr intrusion, and they haven’t been altered to new minerals by the effects of air, water and time. While Norra Kärr is not unique in this regard, this lack of mineral variation should simplify subsequent processing of the deposit.

During initial bench-scale metallurgical testing, the main rare-earth-containing minerals were all very soluble in sulphuric acid, with the catapleiite dissolving faster than the eudialyte. Early in the company’s research, preliminary leach tests gave only a 50% rare-earth element (REE) yield. However, after analyzing the residues and mass balance of the metals, the folks at Tasman noticed that most of the remaining mineral was eudialyte, and were able to refine their processing to recover up to 90% REEs in solution. Since my site visit, Tasman has released the next round of metallurgical results, arising from their work at the laboratory of the Geological Survey of Finland.  They appear to have made good progress, with a mineral-concentrate step and room-temperature leaching both giving good recoveries.

I asked Mr. Leijd about the presence of zircon in the deposit, since this mineral tends to be an impediment to processing at other projects, due to its refractory nature. He indicated that there were only very low amounts of zircon present, around 0.6% (compared to around 10% for some of the other well-known deposits). I asked how important it was to distinguish between different mineral types within the Zr silicate family, since there is a wide range of Zr silicate minerals known to date, some with pretty complex chemical formulae (I don’t think I’ve ever seen the same formula for eudialyte, for example, ever used twice!) Mr. Leijd commented that from the metallurgical flow sheet point of view, the differences are only really important if they exhibit different processing characteristics. The mineral zircon, for example, is known to process very differently from the eudialyte present at  Norra Kärr. This makes sense – the empirical results of testing are the driver here.

Mr. Leijd explained that the Norra Kärr mineral deposit has been known for quite some time. It was explored for its Zr content after the Second World War, and indeed at the entrance to the deposit there is a sign in three languages, explaining some of this history. Sweden has of course played an important historical role in the development of rare earths. It was from a black mineral (later named gadolinite) found in a quarry in Ytterby, a village in the vicinity of Stockholm, that the chemist Johan Gadolin extracted the first individual rare-earth elements (REEs) in the last decade of the 18th Century. Four of those elements were named after the village, namely terbium (Tb), erbium (Er), ytterbium (Yb) and yttrium. Elsewhere in Sweden, from a mineral found in the ore fields of Bastnäs, cerium (Ce) and lanthanum (La) were first discovered and isolated – the mineral subsequently being named bastnäsite (or bastnaesite), after its place of first discovery.

Sweden as a whole has a long history of mining, but the specific area in which Norra Kärr is situated does not have a modern mining operation. As mentioned above, the project is close to a large freshwater lake, which means that any subsequent work has to be particularly mindful of the environmental impact. In the summer of 2011, the Swedish authorities designated the Norra Kärr area as one in which mining activities will take precedent over other land uses, such as the construction of buildings. While there are around 50 such designated sites in Sweden, this is the only one so-designated because of the presence of rare earths. This designation does not mean that the project can avoid the usual normal environmental permitting procedures, but has significantly increased the awareness of the project within the local community and government.

Tasman is looking to mine 1.5 Mtpa of material at Norra Kärr, from which 6 kpta of TREOs will be produced. Projections were built around the potential numbers for Dy. Mr. Saxon said that the project could produce around 360 tpa of Dy, which would meet approximately 15% of total world demand. Such numbers will depend on the results of the Preliminary Economic Assessment (PEA) or scoping study for Norra Kärr, which was initiated in August 2011 and is due for completion shortly. Mr. Saxon said that they anticipated very low strip ratios for the project.

Tasman houses its core shack in an industrial unit in Gränna, recently upgraded from its original location in an old barn on the Norra Kärr site, and we were able to see a wide range of drill-core samples. At the time of our visit, 50 drill holes had been completed, though additional phases of drilling since then have been finalized. Costs were around $85-100 / m drilled, all in, including personnel and rig hire. Mr. Saxon indicated that coarser pegmatitic materials at the center of the property contained higher grades of TREOs, with heavy REO (HREO) numbers around 40-50% of TREO. As one moves towards the edges of the deposit, the TREO reduces slowly but the HREO percentage increases, making it a challenge to determine appropriate cut-off grades for resource estimates, and subsequent cost estimates for producing concentrates. Some of the holes in the drilling campaigns have intersected mineralization over 250 m or more. Additional drilling in the spring of 2011 was geared towards increasing the size of the resource estimate, with down-dip drilling, and to increase confidence in the data by completing in-fill drilling. Further drilling campaigns subsequent my visit has also been geared towards these aims. Note that despite its Nordic location, drilling is possible all year round at this location. As of the time of writing, I am informed that approximately 75 holes have now been drilled, totaling in excess of 13,000 m.

Mr. Saxon said that some non-ore minerals in the host rock also dissolved in the sulphuric acid used to process the eudialyte and catapleiite. Finding a way to avoid such dissolution would be highly beneficial for acid consumption and cost. The recent update provided by Tasman on their processing methods highlighted the use of magnetic separation and flotation in beneficiation, with initial work recovering around 90% of the REEs and over 60% of the Zr present, in a much reduced rock mass. Being able to reduce the presence of nepheline in this way, has greatly reduced acid usage in the processing.

When I asked about the infamous ‘silica gel’ problem (where the processing of silicate-based materials can potentially lead to the ‘gumming up’ of processes due to the formation of a gel), Mr. Saxon indicated that to date, they had not encountered such problems in their leach tests. Tasman had previously utilized the services of the late Les Heymann to advise on processing methods, and using Mr. Heymann’s knowledge, of the 13 tests conducted, 11 had no silica gel issues. This was achieved by carefully managing the chemistry of the acid solution in which the minerals were dissolved. Mr. Saxon noted that the aforementioned leach testing occurs at room temperature, using sulphuric acid.

During the first evening of the field trip, Tasman gave the group additional presentations on the company, the project and its history. Mr. Saxon kicked things off with an overview of the history of the project. The “muddy paddock in Sweden” was acquired in 2009 by a precursor company to Tasman. Norra Kärr had been first discovered in 1906, and is well known to local mineral collectors. Swedish mining company Boliden AB held the property for a number of years, having an interest in Zr and possible hafnium (Hf) occurences. The project was relinquished in 2001, with the project data only being made available in 2009, via a database put together by the Swedish Geological Survey for all projects. It was soon after that, that Tasman’s predecessor claimed the land

Due to previous exploration only being for Zr, Norra Kärr was not previously known as an REE occurrence; it did not feature in the US Geological Survey database, for example, which is perhaps surprising given the prior history of rare earths in Sweden. Tasman had first-mover advantage in Sweden and in Scandinavia in general; since acquisition, Mr. Leijd has led the efforts to date, to get the deposit drilled and characterized. Other projects, such as the newly announced (at the time of the field trip) acquisition of the Olserum deposit, are also being explored and characterized.

Mr. Saxon said that the company could live with setting the value of Ce and La present at Norra Kärr to $0-1/kg, focusing primarily on the Y and Dy present only, given their significant in-situ grades (though of course only a competed PEA or Pre-Feasibility Study (PFS) will be able to figure out if that is the case or not). He said that production of Dy, Y and Zr could constitute up to 80% of revenues for the project. Mr. Saxon also re-iterated the point that the deposit had by far the lowest Th content of any defined resource. When I asked if there was a particular reason for the low occurrences, Mr. Leijd commented that there were no obvious geological reasons. There may have been higher levels of Th and U present in a previously eroded part of the deposit; unusually, the intrusion itself frequently contained lower concentrations of Th and U than the surroundings.

In the past couple of years the European Union (EU) has been increasingly focused on issues concerning strategic materials, including the REEs, and in that context, Mr. Saxon said that Norra Kärr is seen within the EU as a strategic asset. Later in the evening the group heard an interesting presentation from Jaakko Kooroshy, of Chatham House, on the EU perspective on minerals, mining and related matters.

Mr. Saxon pointed out that Sweden has a population of only 9 million people, with a very well developed mining industry. What was not so well known is the fact that 90% of mining production is conducted by Swedish companies (in contrast to other countries and jurisdictions). While the general cost of living in Sweden may be higher than in other jurisdictions, corporate tax rates were relatively lower. In addition, the cost of doing drilling work, and the ability to house people in local towns and villages means that overhead is much lower than other projects, with no need for helicopters, mining camps and the like. I asked Mr. Saxon what the royalty rates were on mining; he said that they were 0.25%, with 0.2% going to the land owner, and 0.05% to the government.

Mr. Saxon commented that they had been in discussions with several different groups in Europe in regards to separation of concentrates. Given the proximity, he said that it was sensible to be talking to such entities, and that the company might consider setting up facilities in a country like Germany, to get ready access to chemicals and reagents. With a rail line some 10 miles away, Mr. Saxon said that mined materials could be transported via rail to appropriate locations for subsequent processing. There are no plans for Tasman to do its own solvent extraction (i.e. separation of concentrates into individual oxides). Given the relatively low concentrations, all processing would need to factor in ease of transportation and associated costs.

At the time of my visit, Tasman had not yet received final confirmation of their dual listing on the NYSE:AMEX exchange, but has subsequently done so. Per Mr. Saxon, the desire to make this move was a reflection of the 8,000+ US-based shareholders that Tasman has, and the need to support them.

Dr. Holmström shared some comments on the permitting process for Norra Kärr. He said that Tasman had started the process ahead of the PEA in order to accelerate the timeline. Such matters are regulated by Sweden’s Minerals Act, local and regional environmental codes and other aspects of land use, waste and water management, some of which involve the application of EU legislation. So far, Dr. Holmström said, all of the local municipalities and counties had been positive about the project, in initial discussions.

Interestingly, according to Dr. Holmström there are no guidelines for concentration levels of waste products in air and water, in the Swedish regulations, unlike in other jurisdictions. It was up to the individual operators to show that their processes would have minimal impact on the environment, during permitting. Such work might include, for example, leach tests to simulate the effects of rainfall on a tailings dump.

Dr. Holmström said that they had already commenced the process of obtaining information that can be used in the application for an exploitation concession, simultaneous to applications for environmental permits. He said that the Mineral Act was biased in favor of the mining companies, to encourage the exploitation of natural resources, to the benefit of Sweden. This has led to some conflicts in the north of Sweden, were groups of the indigenous Saami people live and work, engaging in traditional activities such as the management of herds of reindeer. The Saami are increasingly facing the prospect of mineral projects on their traditional lands. Since there are no such groups in the southern part of Sweden, this will not arise for the Norra Kärr project.

Exploitation concessions are valid for definite areas, decided on the basis of the extent of a given deposit. They are granted for 25 years, with 10-year extensions possible, if exploitation is in progress at the time. Dr. Holmström said that there was a special supreme court in Sweden for environmental issues, and five regional courts. When I asked if local politicians can influence the permitting process, Dr. Holmström chuckled, saying that the courts are very independent, and do not take kindly to such attempts at influencing outcomes. That said, legitimate ways to accelerate the overall process included enhanced stakeholder involvement, using high-quality, detailed studies, and discussions with local county and municipality administration boards.

Tasman personnel also gave an overview of the newly acquired Olserum deposit, not far from Norra Kärr. Potential REE potential for this property was identified in 1990; the property itself has previously been subject to small-scale iron-ore mining since the 17th Century. In 2003, the property was claimed by the Swedish junior IGE, who identified HREE-rich minerals in 2004-2005, following 27 diamond drill holes. In March 2006, IGE released figures of 2.5 Mt in resources, @ a grade of 0.8% TREO, and 33% HREOs, although the resource estimate were not NI-43-101- or JORC-compliant. Additional work by a subsequent owner confirmed the presence of REEs at the project, and Tasman acquired the project in October 2011 for 37,746 fully paid shares of Tasman stock. An NI-43-101 compliant resource estimated is slated for H1 2012.

We also heard some information on Tasman’s other projects in Scandinavia, including Otanmäki and Korsnas in Finland. In addition, we heard from Stefan Sädblom, an exploration geologist and project manager with Bergskraft Bergslagen, a “project for the development of mining and associated enviromental work” in the Bergslagen region of Sweden, in which Norra Kärr is partially located.

I was most impressed with the Norra Kärr project, and the pragmatic approach that the Tasman team is taking towards its development. Certainly there will be questions about the viability of the material grade in the resource, but the distribution of HREOs, initial metallurgical results and location (location, location) make this a project most definitely one to watch. I am particularly interested to see how the focus on a handful of critical elements as the basis for project viability will fare, following the completion of the PEA and PFS. If successful, this would be a new approach to the issue of dealing with the problem of balance – namely the fact that in order to get at the ‘good stuff’ such as the CREOs, you also need to deal with a potential surplus of non-CREOs such as oxides of La and Ce.

My thanks go to Mark Saxon and his colleagues at Tasman Metals Ltd, for facilitating my visit to Norra Kärr.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Tasman Metals Ltd. (Tasman). Neither he nor Technology Metals Research, LLC received compensation from Tasman or from anyone else, in return for the writing of this article.

In August I had the chance to join an analysts’ tour of Strange Lake, the rare-earth-element (REE) deposit owned by Quest Rare Minerals Ltd. (TSX.V:QRM, AMEX:QRM) and the company’s flagship project. While there we also had the opportunity to visit Misery Lake, another rare-earths project owned by Quest.

The Strange Lake deposit is located close to Canada’s Quebec / Labrador border region. It is approximately 80 miles west of the Voisey’s Bay nickel-copper-cobalt mine on Labrador’s east coast, and around 135 miles northeast of Schefferville, Quebec. The project site is about 170 miles north of Goose Bay, Labrador, and it was from here the group took off for the flight by Air Labrador Twin Otter charter planes. 90-minutes later we arrived at the exploration camp at Strange Lake, landing on a permanent airstrip built on a glacial esker deposit (a ridge of stratified materials) close to Lac Brisson, not far from the actual Strange Lake.

On the trip were a number of analysts from financial and capital-market institutions in Toronto, New York and elsewhere, as well as Mickey Fulp (the well-known “Mercenary Geologist”) and Steve Zajac, a consulting geologist who is advising Quest on the Strange Lake project. Steve was involved in the original exploration work at Strange Lake in the 1970s, as Chief Geologist of the Iron Ore Company of Canada (IOC). According to Mr. Cashin, Quest’s President & CEO, IOC was not far from a production decision on Strange Lake, but unfortunately the bottom fell out of the iron-ore market around that time. This meant that the steel guys involved with IOC wanted the company to focus its attention on iron ore, not rare earths, and the project became relatively dormant, exchanging hands several times, until Quest came along.

We were hosted on our visit by Pierre Guay and Patrick Collins. Mr. Guay is Quest’s Manager of Exploration, overseeing the day-to-day operations of the camp and its personnel. Patrick Collins is Quest’s Senior Project Geologist for the Strange Lake project. Mr. Collins was present when the first drill hole was made, and will see the exploration program through to its completion.

You can see photographs taken during the visit, in the galleries below (click on each image to enlarge it). On my second full day on-site I had a bit of a camera malfunction, but fortunately one of the analysts on the trip took some good pics of the day’s activities, and kindly allowed me to use some of them for this report. Mr. Collins also provided some additional core-sample photographs, some with labels; I can confirm that these images match the core samples that I saw during the trip.

The Strange Lake Alkalic Complex (SLAC) is part of a post-tectonic, peralkaline granite complex, which has intruded along the contact between older gneisses and monzonite of the Churchill Province of the Canadian Shield. At present, the primary area of interest at Strange Lake is the so-called B Zone, which was discovered during the 2009 exploration program. Quest published an updated 43-101 compliant mineral-resource estimate for the B Zone in April 2011. The deposit contains an estimated 140.3 Mt of rare-earth mineral resources at the Indicated level, with an average grade of 0.93% total rare-earth oxide (TREO), and an estimated 89.6 Mt of resources at the Inferred level, with an average grade of 0.88% TREO. Both of these estimates assume a 0.58% TREO cut-off grade; for the purposes of the pre-feasibility study (discussed below), Quest used a cut-off grade of 0.95% TREO.

In total there are an estimated 2.1 Mt of TREOs in the ground at the B Zone, and with an average heavy REO (HREO) distribution of 39% in the TREOs present, the deposit is one of the largest and richest potential HREO deposits in the world. 67% of its value comes from the presence of critical REOs, as that term was recently defined by the US Department of Defense. In addition to the presence of REEs, the project is of interest for co-products of beryllium (Be), zirconium (Zr), niobium (Nb) and hafnium (Hf), which, according to Mr. Cashin, have the potential for providing strong credits within the overall cost structure of the project. The Be present, for example, may be of interest to Canadian (or other) defense contractors who do not want to be dependent on US sources for this important element.

Recent drilling at the B Zone has led to the discovery of a pegmatite “spine” more than 25 m thick, which trends northwards towards the airstrip and which contains higher grades of TREOs. The pegmatite material has a coarse-grained mineralogy, associated with volatiles and past fluid flow. The pegmatite spine is both sheet-like and finger-like in nature, with and layers of material in the main deposit. The spine appears to go under the lake to the north. Additional drilling is being undertaken to determine the margins of the spine and to better define its edges. So far, the B Zone appears open along strike to the north and south.

The overall deposit contains a wide range of minerals and in places exhibits very significant alteration. The three main aliquots or portions of the B-Zone deposit are the pegmatite spine, alkaline granite and altered granite. Although there are some variations in the TREO content within these aliquots, the mineralogy of each is similar, which will allow them to all be processed using the same methods and flow sheets. There are significant quantities of gittinsite (a calcium zirconium silicate REE-bearing mineral) in the pegmatite spine. Other REE-bearing minerals present in the B Zone are aegirine, gerenite, gadolinite, kainosite, pyrochlore and zircon. Non-REE-bearing minerals commonly found here include amphibole, feldspar, fluorite, pyroxine and quartz.

Quest uses Activation Laboratories for its material testing and analysis. This company has a preparation lab in Goose Bay, where core samples are sent to be crushed, ground and milled, before 20 g pulp samples are bagged and sent to Ancaster, Ontario for testing and analysis. The rest of the material is warehoused in Goose Bay. At a later date, Mr. Cashin said that these surplus materials could be used for metallurgical testing. On occasion, drill holes will be twinned and an entire core sample will be sent for studying the variability of the minerals within the rocks present in the entire deposit.

While in the core shack, I asked Mr. Collins and Mr. Cashin about the reliability and accuracy of the handheld Niton XRF analyzers that they used. Mr. Collins said that a properly calibrated system would be accurate to within 20%, but that a rigorous calibration process was required to achieve that.

The Main Zone of the Strange Lake project (2 miles southeast of the B Zone) was the starting point for Quest’s exploration at Strange Lake. During our visit to this area of the project, Mr. Guay commented that it is not as altered as the B Zone. In the summer of 2010, Quest decided to remap the whole area in order to update the original data that had been produced by IOC. 30 holes were drilled to depths of up to 75 m; the results indicated the presence of pegmatites towards the west of the zone. Further exploration may be conducted at a future date.

Quest completed a preliminary economic assessment (PEA) from Wardrop Engineering for the B Zone project, in September 2010*. The PEA looked at an average production of 12.5 ktpa of TREOs over the 25-year projected life of the mine (at a cut-off grade of 0.95% TREO, higher than the cut-off grade used in the mineral-resource estimates). An open-pit production rate of 4 ktpd was proposed, with an initial estimated strip ratio of 0.4:1 (this is the ratio of waste material to ore recovered ). The PEA estimated required capital expenditures of around C$560M, which included a 25% contingency.

The PEA was based only on mineralization estimates within 200 m of the surface; Mr. Cashin estimates that there is mineralization as far down as 300-350 m below the surface. Most of the pegmatite spine, with its higher concentrations of TREOs, is within 125 m of the surface, with little overburden. The B-Zone resource is open in all directions, including at depth and below adjacent Lac Brisson, although the materials below the lake would almost certainly not be considered for future exploitation.

Work on the flow sheet for the production of REOs at Strange Lake continues. Initial work using an acid bake at 220°C for one hour on the REO-bearing granites and pegmatites resulted in the successful production of 77-93% REO slurries. Mr. Cashin said that physical beneficiation would not be required for the minerals, beyond initial crushing and grinding of the feed stocks, thus avoiding potential REO losses via early pre-concentration steps.

Mr. Cashin went on to say that past processing tests on the REE-bearing silicate minerals present at Strange Lake, resulted in the gumming up of the filters with a silica gel, which results from the process. The acid-bake process avoids this problem as the silica gel is desiccated, and falls to the bottom of the reaction vessel. Up to five concentrates will be produced; tailings will be dry stacked, with a process developed to recover water and acid, which could then be recycled for use in the processing facility.

The original processing plan was to send slurry concentrates via pipeline to the Labrador coast for processing, but the permitting process was deemed to be too difficult. Quest is now looking to build concentration and separation facilities close to the proposed Strange Lake mine site in Quebec, in order to simply the process.

Sulphuric acid is the principle initial reagent for processing, Mr. Cashin said that the company was looking at the feasibility of having elemental sulphur (S) shipped to the future processing facility at Strange Lake, in order to produce the acid on-site.

The company is also looking at the development of an access road for shipping materials in and out of the facility once built. Two options are being considered; the first would be a 75 mile-long road east to Voisey’s Bay; the second would be a 135 mile-long road southwest to Schefferville. Estimates indicate that the capital expenditures involved would be approximately $135M and $250M respectively. When factoring in the cost of maintenance over the 25-year mine life, total cost estimates are $600M for a road to the coast, and $2.4B for a road to Schefferville. Obviously for cost reasons, a road to the coast is preferred.

In the meantime, Quest has already begun airborne, topological and environmental studies on the impact of building such a road. There is also the need to avoid aboriginal archeological sites and other sites of importance. The goal is to have the road underway by early 2013 at the latest, so that it can be completed in time.

As part of the pre-feasibility study (PFS) now underway for the B Zone, Quest is looking at the possibility of attaining lower strip ratios, perhaps as low as 0.25:1, by revising the angle of the planned pit wall, which because it is contains particularly robust rock, could be set as steep as 55°. The B Zone has gone from discovery to initiation of a PFS in less than two and a half years – a relatively short period of time for such projects.

The northern edge of the planned open pit will be at least 150 m from the lake and airstrip, to prevent any problems of seepage. The pit has a planned depth of 125 m to start; the first ten years of mining, targeting the pegmatite spine, is estimated to produce higher grades of TREOs than the rest of the B Zone, and will be executed at a high production rate of 18-19 ktpa TREO in the same period. Mr. Collins commented that as additional in-fill drilling results have been analyzed, the company has started to consider altering the original pit design, in order to accommodate additional mineralization that has been found.

Mr Cashin said that Quest hopes to complete the PFS by Q1 2012. The initial proposed flow sheet is slated for completion at any time now, with the information gleaned from the metallurgical testing being used to put together a pilot plant in early 2012. This would be undertaken by Hazen Research at their facilities in Colorado, with a goal of producing end products that could be tested by potential end users for quality and consistency. A bulk sample of 25 t of material will be used to test the run of process in the pilot plant; 15 t of that material has already been excavated, with an addition 10t to be removed in the future.

Quest has recently been engaged in a joint venture with Search Minerals, on part of the Strange Lake Alkali Complex (SLAC). Much of the SLAC was explored by IOC in the past, but only via shallow drilling. IOC had a historical (non-43-101-compliant) resource estimate of 53 Mt @ 1.96% TREO (0.66% Y oxide + 1.3% REOs), along with oxides of Zr, Nb and Be. Search acquired a series of claims in the vicinity, and in June 2010, through its Alterra Resources subsidiary it entered into an agreement with Quest, for the latter company to acquire up to 65% of the interest in 30 mining claims adjacent to Quest’s own claims on the SLAC. This was in return for conducting an exploration program on the claims, in addition to the transfer of Quest shares to Alterra.

The camp at the Strange Lake project is pretty impressive. Located to the west of the active exploration area, next to Lac Brisson, it is very well-provisioned and can accommodate up to 80-90 people at any one time. Mr. Cashin explained that the camp uses a “6 weeks on, 10 days off” rotation, with work conducted during 12-hour shifts. This is the second year that Quest has been based at this camp; it was first established towards the end of the 2009 exploration season, with significant infrastructure first put in place at the beginning of the 2010 season. The company recently tripled the size of the kitchen and canteen; provisions are flown in from Schefferville and Goose Bay. The camp uses a 40 kW generator for electricity, plus a backup. There is a nurse’s station, wireless internet access connected to a satellite uplink and even a makeshift sauna on-site!

Mr. Cashin commented that the turnover of employees at the camp is very low – word gets out concerning the good working conditions at the site, and this means that the project can attract high-quality personnel. Such conditions no doubt contribute the the relatively high productivity of the drilling program, with a single hole being drilled on average every 24 hours. The drilling contractors are paid per meter of core drilled.

Quest’s drilling contractor is Forage Boreal, the contracting division of Versadrill, the manufacturers of the machines being used for the drilling. At the time we visited, the project was using four exploration diamond-drill rigs for in-fill drilling, with a fifth drill rig being used for outside targets and doing condemnation or sterilization drilling (used to make sure that areas around the site to be allocated for tailings, processing facilities etc do not contain valuable minerals). The crews have also twinned 12-16 existing drill holes, to allow for the subsequent completion of location-specific metallurgical testing.

This season will likely be the last for exploration drilling at the B Zone; Mr. Cashin told his geologists that if they had particular targets at which they wanted to take a look, then now was the time to do it. The next phase for the project will be the transition from exploration to engineering, with an associated change in personnel and activities on site. The geologists and other exploration personnel will then turn their attentions to Misery Lake and possibly other targets in the vicinity. In some of the early surveying work, for example, the folks at Quest noted radiometric anomalies associated with a boulder train close to the SLAC; there is some interest in determining the sources of associated mineralization.

Around 20% of the non-Quest-owned portion of the SLAC lies within lands subject to the Labrador Inuit Lands Claims Agreement. This area is now part of the autonomous region of Nunatsiavut on the eastern side of the Quebec / Labrador border. Mr. Cashin indicated that these lands may become available for auction at some point in the future, and that Quest would determine at that time if they would bid on them. One potential challenge of working so close to the border between Quebec and Labrador is that the exact position of the boundary between the two provinces has never really been properly defined. There are a handful of marker posts indicating the boundary, around 100 m away from the pit in the Main Zone that IOC excavated in the 1970s. The boundary between the two provinces was only set in 1927, and there are indications that Quebec never formally recognized the position of the border. Still, the issue is not exactly a flash point at this moment in time.

Quebec has long been known as one of the most mining-friendly jurisdictions in the world. The Quebec government gives a 50% rebate to companies who spend money on eligible mineral-exploration initiatives, upon presentation of audited financial statements. Mr. Cashin said that Quest will soon be in receipt of a $3.35 million rebate from the provincial government, as a result of the companies 2010 exploration activities. He indicated that Strange Lake has been visited by senior officials from the provincial government, and that the Ministry for Natural Resources and Wildlife has designated specific personnel within the ministry to liaise with Quest on this project. Mr. Cashin noted that to date, most mineral projects on Quebec and elsewhere in Canada, were located south of the 49th parallel. Since Strange Lake is located above the 49th parallel, the company is benefiting from the Quebec government’s “Plan Nord”, its long-term economic-development strategy for that region of the province.

The provincial government is interested in the strategic potential of projects such as Strange Lake. Mr. Cashin said that he had been able to discuss Strange Lake with various governmental departments during a recent trade mission to Japan and Korea.He commented that there may be some interest in helping to bring separation facilities and other elements of the supply chain, to the area. Mr. Cashin also said that from his own experience during his time working for the Ontario Ministry of Mines, he estimated that for every $1 that provincial governments put into the development of projects (or into helping conditions conducive to their development), the investment produces $3 in revenues due to subsequent private investment.

In 2007, Quest undertook reconnaissance of a significant ring alkaline intrusion at Misery Lake, some 80 miles south of Strange Lake. Grab samples indicated TREO content of up to 8-9% TREO, with 17-20% HREO content. The government of Quebec subsequently did a detailed magnetic survey of the region, and geochemical samples have also been taken. In 2011 Quest will likely complete 6,000 m of drilling at Misery Lake, out of an initially planned 10,000 m (there were a number of weather-related delays).

The group took the trip to Misery Lake from the Strange Lake camp by float plane and helicopter. The group was accompanied by Mr. Guay and by Laura Petrella, a student from France completing her master’s degree in geology at McGill University, with a thesis focused on the Misery Lake property. Ms. Petrella said that the Misery Lake claims were extensive, and that a significant amount of prospecting and surveying was required to keep them in good standing. The materials at Misery Lake have similarities to those at the Lovozero deposit in Russia’s Kola peninsula, and elsewhere.

There is significant overburden covering much of the deposits of interest (up to 35m thick in some places), so this made it challenging to characterize the area. The short field season at Misery Lake (2-3 months long) also made it very challenging to explore here; there was absolutely no infrastructure in place at the site, and the geologists are shuttled back and forth from a hunting and fishing lodge located around 6 miles away, by helicopter or float plane. Mr. Cashin indicated that they may start to build a permanent camp at Misery Lake next year.

Mr. Guay said that the company was looking to develop enough information from the site at Misery Lake, to interest potential third-party partners to assist in the development of the project, as a way of speeding up the exploration process. There had been some initial interest from JOGMEC, the Japanese government entity, but a joint venture was ultimately not initiated.

A comment that Mr. Cashin made early on in the visit, was that the company was looking to expand its Board of Directors to include additional individuals who have experience with mining development. Just this past week, the company announced the appointment of one such individual, George Potter, to their Board.

Overall, I was very impressed with all aspects of the Strange Lake project, and the management team behind it. The project is clearly well on its way to completing the pre-feasibility study, and determining the flow sheets required to produce end products. Although the project site is pretty remote, the company has not let that stand in the way of making significant progress. On a side note, I was also impressed with the way that the Quest team handled some unexpected logistical challenges before we arrived at Strange Lake, caused by the notoriously unpredictable weather in that part of the world. The little things can make all the difference.

My thanks go to Peter Cashin and his colleagues at Quest Rare Minerals Ltd., for facilitating the visits to Strange Lake and to Misery Lake.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Quest Rare Minerals Ltd. (Quest). He did not receive compensation from Quest or from anyone else, in return for the writing of this article.