If I were you I would use the following method :

1. You compute sales value of standard oxides by multiplying the last published prices on metal pages. You get the sales value of your oxides mix.
2. Then you may go down to the concentrate value : you can find costs of separation (both capex and opex) that were recently published by either Lynas or Molycorp, and remove them from your oxide value. Remove also the amortizations of the plan which is necessary to build your separation plant.

And you will get the “value” in your concentrate … Anyway, this is quite theoretical. Concentrate has almost no market outside China. Only Molycorp / Silmet being able to purchase it for the moment…

Wilson

Excellent site most useful.
I am testing some exploration kit that gives value in terms of metal content. Seems to be working well. I need samples for calibration purposes. Can I get any? the more the better! Where can i find the technology to extract these? Is there anyone using flotation? Typical grades so far 0.15Pr and 0.22Nd, looking at rest! Surface stuff.

Chandra Durve

Details are as follows

1. Vein swarm

YHREO distribution= 45 % , LREO=55 %

Inferred ore resources= 0.65 Mt @ 3.9 % TREO and 0.2 % Nb + 0.48 % Zr oxides

2. Hills

YHREO distribution=10 %, LREO=90 %

Inferred ore resources= 8 Mt @ 5.75 % TREO and 0.07 % Nb oxides + 0.03 % Zr oxides

I am very much thanfull if you could give me a roughly value of the deposit (Rock value in your word) and extraction cost per kg/ton of REO as well.

Is your metric specifically with regards to rare earths, or can it be applied to rare metals as well?

In another post of yours I noticed you had created an index of rare earths companies and listed a requisite being that the company has to have an NI 43-101 compliant resource or reserve to be included in your list.

Have you done any empirical testing to compare the valuations achieved by your equation vs. market cap of the company stock?

A specific example I was hoping you could take a look at. I have been trying to understand why this one appears to be undervalued and under the radar. SRSR.

An NI report authored by Patrick Neville Chance said SRSR has an 18 Million tonnes inferred Nb2O5 resource of .47% grade ore. However, the company CEO Scott Keevil told Jennifer Getsinger in a Resource World article that the SE zone of the company’s Nemegosenda property could contain as much as 170 Million tonnes of Nb2O5 ore. Additionally, a block model analysis by the late Alan Hawke suggested that the D Zone (renamed Hawke in his honor) contains a resource of 60 Million tonnes, for a potential total of as much as 230 Mt grading roughly .4% or better.

Additionally, the property was also surveyed for its REE potential. Some of the drill holes and samples show greater than 1% TREOs, but average is about .4%.

Oh, and the property has historical metallurgical data…

“Development work followed two variants of an extractive chlorination scheme; catalyzed chlorination and phosgenation processes. The phosgenation process was taken through the pilot plant stage, however, the plant configuration is similar for both process. Both processes are demonstrably operable and appear capable of producing high purity niobium metal powder for a total cost of less than $13 / kg at a 1000 tpy (ibid.”

Applying your metric to SRSR’s inferred resource, yields a figure in the billions, yet the market cap is only $20 million or so.

If the company’s calculations and statements are accurate, this could be the world’s second largest deposit of niobium after CBMM.

I was hoping you could take a look at this company and give your analysis.

Thanks.

Not that I have a solution as yet, but some form of rating (A, B or C) could possibly be applied depending on how the value of REEs rates against total revenue potential from all saleable products.

As for the radioactivity dimension, this is a grwoing risk factor which should probably be factored in. As most recently reported in the China Daily (Jan 7th), the Chinese government is ex[pected to announce toughened regulations and limits of emission quantities of radioactive elements and phosphorous in early February. I’m sure you’re already noodling on some form of discount rating…

Until soon… Ian

@ orvie zimmerman: certainly such costs have to be accounted for, just as, for example, we have to consider the cost differentials between open pit and underground mining, or mining a mile or two away from a major highway, versus hundreds of miles away. There are many cost factors to consider.

@Tek: per my last comment above – not so much a metric as a simple rule of thumb :-) There is certainly not a lot out there on the cost side of each of these projects, so we’ll look to address that issue in the near future – thanks for the suggestion :-)

@William: cool beans – will look forward to seeing the results.

@Jack: thanks for the comments!

@Ian: Simple can be good, until it’s not good :-) We probably makes things a little too simple in this space, because it’s already complex-enough to be dealing with 15-16 elements!

As you know, there are numerous parameters that affect any project, including those you mentioned. Any good, detailed analysis of the production viability of a project must consider the value of byproduct metals and minerals which can offset the costs associated with the rare-earth production. Also as you know, such byproduct economics, taken to the nth degree is how the mines in China’s Bayun Obo are able to produce at such low costs, since the rare earths are themselves the byproducts of iron ore production.

The presence of radioactive material is also another good parameter to consider, absolutely. Just the delays associated with related permitting alone, make this one to watch carefully.

I believe that we all know that one of the largest risks to production for Rare Earth deposits is its ability to manage the radioactivity either in the process and exposure to people, handling, disposal and most importantly, permitting.

My sense is that these considerations will give people something to think about with all the current REE plays out there!

Until soon… Ian