Mining Indaba 2011

by Gareth Hatch on March 7, 2011 · 1 comment

in Event Reviews, Rare Earths, South Africa

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As I mentioned in my article posted earlier this week, I had the opportunity to attend Mining Indaba 2011 in Cape Town, South Africa last month. With a record 5,700 attendees this year, this is the premier annual mining event in Africa.

I’ve already mentioned the presence of Great Western Minerals Group (GWMG) (TSX.V:GWG) in an earlier article. They were about the only recognizable exploration & development company with an advanced rare-earth project, officially exhibiting at the event – though there were representatives from other well-known companies present. There were also exhibitors present with projects on the 300+ long TMR Rare-Earths Project List, with names that might not be as familiar to folks watching the rare-earths sector as others.

Avonlea Minerals (ASX:AVZ) has the Hoarusib project in Namibia that is prospective for rare earths, but their main focus appears to be on the Abenab project, a historical vanadium mine which they’re looking to develop for base metals. I spoke with folks from Montero Mining & Exploration (TSX.V:MON), who have the Wigu Hill project in Tanzania. Since Indaba they have listed on the TSX Venture Exchange and now that they’re through that process, they’ll be focusing back on development work. The company has taken over a couple hundred grab samples from the property, and claims to have seen significantly high grades of rare earths in some of them.

Also present was Peak Resources (ASX:PEK), who has the Ngualla project in Tanzania. They had recently completed a drilling campaign at Ngualla, and the company felt that initial drill results appear to be encouraging. They will follow this program up with more drilling before the summer. I also spoke with the guys at African Consolidated Resources (AIM:AFCR), who have the Nkombwa Hill project in Zambia, a joint venture with Rare Earth International, and, if I recall correctly, one other entity called Ferrex. They commented that the project was “highly prospective” for rare earths.

Also present during Mining Indaba 2011 were representatives of Namibia Rare Earths, who have the Lofdal property in Namibia, and who are in the process of getting ready to roll out an IPO for their company.

James Kenny, CEO of Frontier Rare Earths

I then had the opportunity to spend some time with James Kenny, CEO of Frontier Rare Earths (TSX.FRO), which not too long ago went public on the main TSX exchange and which has the Zandkopsdrift project in the Northern Cape of South Africa. This project is a member of the TMR Advanced Rare-Earth Projects Index and has both inferred and indicated rare-earth resource estimates per NI 43-101. It is not too far away from GWMG’s Steenkampskraal project. Mr. Kenny reviewed the recent presentation that Frontier put together on the project. We discussed the (at the time) new numbers for supply and demand that Dr. Chen of the Chinese Society of Rare Earths had included in the Vancouver presentation given just a couple of weeks prior to our meeting. If a production cap of 110 kept of rare earths really is put in place in China,this could mean shortfalls of supply for both China and the rest of the world, at levels greater than previously expected.

Mr. Kenny pointed out the proximity of the Zandkopsdrift to the Saldanha deep water port on South Africa’s West coast. He commented that they saw the Zandkopsdrift deposit as being a solid peer of other 200 kt+ rare-earth mineral-resource projects. The project would consist of extracting materials from a 50 m high hill on the property, before drilling down a further 30 m. The rare earths are present via supergene enrichment, in the form of fine-grained monazite, similar to the Mount Weld deposit in Australia. Mr. Kenny said that the initial mining campaign would focus on high-grading the deposit, in phases. Frontier is looking to do further drilling over the next six months, including in-fill drilling at intervals of 40 m.

Mr. Kenny said that the goal was to get a significant fraction of the deposit’s mineral resource estimated into the measured category. When I asked him about the challenge of processing fine-grained monazite such as that at Zandkopsdrift, he said that the company was working with SGS to get a flow sheet for the project following the completion of metallurgical studies, and he was (naturally) confident that an effective flow sheet would be produced. Mr. Kenny said that Frontier planned to complete their Pre-Feasibility Study by Q1 2012 and a Bankable Feasibility Study by the end of 2012.

We then discussed the novel approach to presenting value estimates that Frontier adopted in recent presentations. The company has focused on the use of a neodymium (Nd)-equivalent value for its project; this type of approach is used quite often for base metal and other projects, to attempt to determine the equivalent value of auxiliary metals and minerals, in terms of the primary material of interest. To my knowledge though, this is the first time that it’s been used in the rare-earths sector in this way. In the case of Zandkopsdrift, Frontier used Nd as the basis for the metric, it typically being the overall most-valuable rare earth present in many deposits. As an example of how this works, let’s assume that Nd oxide is currently trading at $100 / kg, and that La oxide is trading at $50 / kg. At this ratio of prices, every 1% of La oxide present in the material grade is equivalent to 0.5% Nd oxide – from the potential value point of view. This of course assumes similar recovery rates for either rare earth.

A couple of other observations from Mining Indaba 2011: I saw fewer Chinese delegates present than I was perhaps expecting; and I found it slightly odd to see pavilions / booths from the Czech Republic and the Afghanistan Ministry of Mines here… still – it was a very interesting experience, and I want to thank the folks at Resource Investor for facilitating my attendance at the meeting.

Disclosure: at the time of writing, Gareth Hatch is not a shareholder of any of the companies listed above, or of any other publicly traded junior-mining company. He did not receive compensation from any of the companies listed above, in return for writing this article.

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1 Rider I August 21, 2011 at 1:16 AM

The racist Communist Chinese fund terrorism and genocide in the world to gain cheap resources to centralize the worlds resources to their 97% monopoly

Communist Chinese use Proxy agents then invade via SOE free trade zones after the economy is weakened by the fighting of proxy agents

How the Communist Chinese Party and their espionage unit fund terrorist and genocidal dictators that oppress world women’s rights.

Over four years ago, America suffered the worst terrorist attack in its history, caused by a terrorist group largely known as al Qaeda. About a month after the attack, it was first reported that Communist China bought unexploded American cruise missiles from al Qaeda in order to “reverse engineer” them, i.e., use them to advance its own cruise missile capabilities. That report was just confirmed on Nov. 29. The subsequent silence from mainstream media has been deafening. What gives here? For over four years, as the democratic world has fought the War on Terror, Communist China has managed to stay out of sight and out of mind, despite the information above and immediately below. Even the pro-democracy, anti-Communist movement has largely been quiet on this. This remains a terrible and dangerous mistake. For those new to this topic, what follows is a quick synopsis of Communist China’s actions regarding al Qaeda and the Taliban. 1998: After the American cruise missile attack on al Qaeda, Communist China pays up to $10 million to al Qaeda for unexploded American cruise missiles. 1999: A book by two Communist Chinese colonels presents a battle scenario in which the World Trade Center is attacked. The authors recommend Osama bin Laden by name as someone with the ability to orchestrate the attack. September 11, 2001 (yes, that date is correct): Communist China signs a pact on economic cooperation with the Taliban. Just after September 11, 2001: The Communist press agency makes a video “glorifying the strikes as a humbling blow against an arrogant nation.” Also after September 11, 2001: According to Willy Lam (CNN), the Communist leadership considers al Qaeda to be “a check on U.S. power,” and only decides to back away from it after deciding that “now is not the time to take on the United States.” Also after September 11, 2001: As Pakistan mulls a request from the United States to allow its troops to be based there for operations against the Taliban, Communist China—a 50-year Pakistan ally—announces it would “oppose allowing foreign troops in Pakistan.” Also after September 11, 2001: U.S. intelligence finds the Communist Chinese military’s favorite technology firm—Huawei Technologies—building a telephone network in Kabul, the Afghan capital. November 2001: As U.S. Special Forces and local anti-Taliban Afghans are liberating Afghanistan, Communist China, through public statements and behind-the-scenes actions, tries to prevent what it calls “a pro-American regime” in Kabul. 2002: Raids of al Qaeda hideouts by U.S. Special Forces and allies net large caches of weapons from Communist China, including surface-to-air missiles. This comes weeks after the U.S. government warns that al Qaeda terrorists in the U.S. would try to use said missiles to take down American planes. April 2002: Then-Communist Chinese leader Jiang Zemin, while visiting Iran, rips the U.S. military presence in Central Asia. Late summer 2002: Almost a year after Afghanistan’s liberation, a three-man delegation from the Taliban—led by Ustad Khalil, purported to be Mullah Omar’s right-hand man—spends a week in Communist China meeting with cadres, at their invitation. August 2002: Intelligence from the post-Taliban Afghan government reveals that Communist China has turned a part of Pakistan deemed under its control (most likely “Aksai Chin,” the piece of disputed Kashmir that Pakistan gave to its longtime ally in the 1960s) into a safe haven for al Qaeda. May 2004: Media reports expose how the Communist Chinese intelligence service used some of its front companies in financial markets around the world to help al Qaeda raise and launder money for its operations. Yet Communist China continues to claim that it is our friend in the War on Terror, and foolish supporters of “engagement” continue to believe it. Nothing could be further from the truth. It’s not merely al Qaeda that has received Communist support (for more on Communist China’s extensive ties to terrorists, check out my book on the subject), but given the nearly universal acceptance of al Qaeda as an enemy of the democratic world, one would think that the above information would be enough for a serious and thorough reexamination of our relations with the Communists. After all, Communist China’s reasons for supporting anti-American terrorists are not difficult to ascertain. The U.S. is the main obstacle to the Communists’ plans for conquering Taiwan, replacing Japan as the lead power in Asia, and replacing the U.S. as the lead world power. If Communist China fails in any of these, its reliance on radical nationalism—the regime’s raison d’etre since the Tiananmen Square massacre—will backfire badly. Thus, the Chinese Communist Party sees the United States as the chief threat to its power, and its survival. Yet President Bush has not once demanded that Communist China end its support for al Qaeda—indeed, he has not even acknowledged the existence of that support. Sadly, he is not alone. In fact, those of us who insist on spreading the word about this are in the distinct minority. If we are to win the War on Terror, this must change. The War on Terror is, in fact, part of the Second Cold War—the cold war between Communist China and the democratic world. As such, the War on Terror can not and will not be won unless the free world sees the Chinese Communist Party for what it really is: an enemy. The road to victory in the War on Terror ends not in Kabul, Baghdad, Tehran, or Damascus, but in Beijing. America and her allies will never be secure until China is free. D.J. McGuire is President and Co-Founder of the China e-Lobby, and the author of Dragon in the Dark: How and Why Communist China Helps Our Enemies in the War on Terror.

Rider I

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