Heavy rare earths developer Northern Minerals (ASX: NTU) has shared its insights into positive signs that the rare earths sector is seeing more activity emerging. In the past few weeks, the reported price for dysprosium has increased by over 20 per cent, while Lynas Corporation brought M&A focus to the forefront of ASX investors following a $1.5 billion takeover approach by conglomerate Wesfarmers.
This announcement sets out some exciting recent developments with both Northern Minerals and the rare earth sector in general:
· In recent weeks, we have seen the reported price for Dysprosium increase by more than 20%.
· Fellow rare earths producer, Lynas Corporation, has brought M&A focus to the forefront of ASX investors following an unsolicited $1.5 billion takeover approach by Wesfarmers Limited. While this does not suggest that the Company is a takeover target, it does show that there is interest in the sector for quality producing assets.
· As we continue commissioning of the Browns Range Pilot Plant Project, aimed at assessing the technical and economic feasibility of the full-scale project, we made the prudent decision to strengthen the balance sheet with a well-supported $20m equity placement.
· On the exploration front, the recent high-grade maiden Mineral Resource was well received, with further drilling and resource studies planned for Dazzler and Iceman.
· Finally, as we await the finalisation of our FY18 R&D claim, the Federal Government has forecast a decline in value of registered R&D claims. We expect further information on this in the coming weeks.
Positive signs for the dysprosium price
Over the past month, there has been seriously positive moves in the dysprosium price, with the reported price per kilogram increasing by circa 20% in this period.
There has also been a positive sign from slight upward moves in the price of terbium over the same period, however not to the same extent as dysprosium.
Sector focus with Wesfarmers’ takeover tilt for Lynas
There was some welcome investor focus on the rare earth sector recently, with Western Australian headquartered industrial conglomerate Wesfarmers launching an unsolicited $1.5 billion bid for light rare earths producer Lynas Corporation.
Lynas produces praseodymium and neodymium, both of which are also used in permanent magnets. The proposed takeover, by one of Australia’s largest companies, has shone a spotlight on the rare earth sector in general.
Of course, the Lynas takeover offer does not itself give any indication that a takeover offer may be made for the Company.
Browns Range Pilot Plant Project
Commissioning of the Pilot Plant is ongoing at Browns Range, as we continue the program to assess the technical and economic feasibility of the full-scale operation.
Chemically, the process plant is performing as designed, with the heavy rare earth carbonate product meeting the designed specifications, providing early confidence that the metallurgical process route is in line with the technical feasibility expectations.
Mechanically, there have been a few minor issues throughout the plant that have restricted the ability to operate it at full capacity. As the project is a three-year pilot plant trial, these mechanical issues are not a surprise.
In fact, given the significant R&D work associated with Browns Range being the first xenotime heavy rare earths project globally, the issues simply validate our decision to opt for the pilot plant phase in order to understand the circuit before deciding to proceed to the next phase of development.
The required plant modifications are being addressed systematically, with test production expected to ramp-up over the coming months. The trial shipment in December 2018 is awaiting final assay results from our offtake partner as part of the feedback loop of R&D testing of the Pilot Plant.
