American Rare Earths Ltd (ASX:ARR) has acquired scandium mineral rights over the Split Rocks Project in Western Australia from Zenith Minerals Limited (ASX:ZNC) to explore, develop and process scandium as well as nickel and cobalt at the project.
Near-surface scandium exceeds 100 parts per million (ppm) in three drilling samples, with notable drill intercepts including:
- 4 metres at 190 ppm from surface;
- 8 metres at 105 ppm scandium from surface;
- 4 metres at 100 ppm scandium from surface; and
- 20 metres at 94 ppm scandium from surface.
Scandium grades exceeding 50 parts per million have been identified in 64 samples from 46 drill holes intercepted at depths less than 52 metres.
In addition, highly anomalous cobalt and nickel mineralisation has been intercepted with best drill results including:
- 30 metres at 0.06% cobalt (600 ppm) and 0.75% nickel (7,500 ppm) from 20 metres depth; and
- 12 metres at 0.27% cobalt and 1.45% nickel from 20 metres depth.
The scandium mineralisation is hosted within a sequence of ultramafic rocks that have already been assessed by Zenith for their gold potential, however, based on exploration work to date there is unlikely to be overlap between scandium and gold mineralised areas.
“Opportunity to expand scandium portfolio”
The acquisition is consistent with ARR’s global objectives to create a rare earths and scandium supply chain.
While the company remains focused on unlocking the rare earths and scandium mineral potential at its La Paz and Wyoming projects in the USA, the acquisition of the scandium mineral rights presents a unique opportunity to expand its scandium portfolio
ARR managing director Keith Middleton said: “Scandium, a rare and highly valuable mineral, has been discovered through ARR’s recent exploration and development activities at both of the company’s Arizona and Wyoming rare earths projects in the USA.
“Additional work is currently being undertaken to validate the scandium resource in its own right at both projects.
“Zenith Minerals, from whom ARR originally acquired the Wyoming Project, uncovered attractive scandium grades at their Split Rock Project in Western Australia.
“While the company remains focused on unlocking the rare earths and scandium mineral potential in the USA, the acquisition of scandium mineral rights over the Split Rock Project in WA presents a unique opportunity for the company to expand its scandium portfolio, and provides further basis for developing our REE strategic materials strategy in the future.”
Hole locations with scandium data.
Under the binding term sheet, Zenith has agreed to grant ARR an exclusive option to acquire scandium minerals to a maximum depth of 50 metres from surface within a portion of its Split Rocks Project (E77/2388) which is 100%-owned by Zenith via a wholly-owned subsidiary, Black Dragon Energy (Aus) Pty Ltd.
The option is subject to the payment by ARR of an option fee (A$50,000 within seven days of execution) and milestone payments as follows:
- A$400,000 worth of ARR shares within six months of execution;
- A$100,000 following an ARR ASX release of a JORC scandium mineral resource containing no less than 10 million tonnes at an average grade of at least 50 ppm of scandium; and
- 5,000,000 ARR shares on the grant of a scandium mining lease.
The option is also subject to a commitment by ARR to fund exploration related expenditure of at least A$10,000 during the option period.
Upon exercising its option to acquire the scandium project, ARR has agreed to pay Zenith a royalty of 3% of the net smelter generated from any scandium minerals or scandium mineral resources.
The planned future exploration activities of ARR for scandium and Zenith for gold can proceed with the individual parties benefiting by sharing exploration data generated at their own respective cost.
Confirmatory drilling was recently completed, with assays pending, that will provide further data for initial scandium metallurgical test-work.
ARR will compile, review and process this data to determine the next steps of development, including determining preliminary resource estimates, as data allows.
The company will then develop exploration plans to further delineate scandium occurrences at Split Rocks focusing on areas to the south.
Story by ProactiveInvestors
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