Codrus soars on rare earths, niobium project pick-up

It seems the combination of both rare earths and niobium is making the market meerkats sit bolt upright at the moment. WA1 Resources’ stock price ran over 2000 per cent after it made a major rare earths and niobium discovery recently and Codrus Minerals’ share price tripled today after it announced it has its foot on a new project in WA that has solid hints of rare earths and niobium.

Codrus’ share price finished yesterday at 6.9c and touched 21c in intraday trading today after announcing it would farm into a privately held project that covers an old Quarry that was originally exploited for quartz and feldspar.

The company has entered into a farm-in and joint venture agreement with Talgomine Minerals to earn up to 90 per cent of the Karloning rare earths project in WA’s Wheatbelt region.

Karloning boasts a 1.5km long pegmatite system that Codrus says is 200m wide and could be just one of a number of pegmatites at the project with others anticipated to be lurking under cover.

Notably the pegmatites have already been sampled for critical rare earths and did not disappoint.

Codrus says samples of the pegmatite are showing high-grade “heavy” rare earths such as dysprosium and terbium. Heavy rare earths, as opposed to “light” rare earths, are scarce and are currently only mined commercially in China.

Karloning is showing sample results as high as 5740 parts per million for dysprosium and 3516ppm for terbium.

The project also appears to be blessed with light rare earths such as neodymium and praseodymium, with grab samples coming in at 2658ppm for neodymium and 235ppm for praseodymium.

All four rare earths are currently being swept along by the electric vehicle juggernaut. Whilst lithium is the glamour metal, its use is restricted to the battery whereas rare earths such as praseodymium, neodymium, terbium and dysprosium are a critical part of the engine in an electric vehicle. They are used in the permanent magnets that are a key part of an electric vehicle engine.

Importantly Codrus says its pegmatite system is also showing solid numbers for niobium, with grab sample grades clocking in at over 5000ppm.

At over US$40,000 a tonne, the price of a tonne of niobium blitzes the price of a tonne of lithium-bearing spodumene that is currently selling for up to US$8000 a tonne.

Niobium has a variety of uses and is often added to steel for its strengthening properties. It is used in mega industries such as jet engines and rockets and also in beams and girders for buildings.

Notably it is also used on gas pipelines, a massive market in itself.

The combination of the discovery of both rare earths that are suitable for electric vehicle engine magnets and niobium has been setting the market alight recently.

WA1 Resources hit the ball out of the park recently after discovering a large carbonatite system in WA’s West Arunta region that is loaded with rare earths and niobium.

The company’s share price touched $3.02 briefly after announcing its first rare earths and niobium drill hits at the company’s West Arunta project. Just three weeks prior it was cellar-dwelling at around 13.5c a share.

WA1’s discovery intercepts include 54m at 0.62 per cent niobium pentoxide and 0.18 per cent TREO, from 162m. That hit was contained in a broader 142m intersection going 0.31 per cent niobium pentoxide and 0.17 per cent TREO from 74m and was still mineralised at end of the hole. The drill results also showed traces of phosphorus pentoxide.

Codrus’ early grab samples from Karloning show greater than 0.57 per cent dysprosium and over 0.5 per cent niobium.

The numbers are not specific because the grades came in at greater than the detection limit of the laboratory and will be subsequently tested by a different facility to determine the true strength of the dysprosium and niobium content.

Perth-based Codrus says it has pegged additional ground along the south-west boundary of Karloning and believes the zone could host an array of the pegmatite system’s extensions.

As part of the deal, Codrus will initially pay $30,000 in cash and issue $30,000 worth of shares at a 10-day volume-weighted average price to unlisted project owner Talgomine Minerals Pty Ltd.

Talgomine will then pick up a million options with a 20c strike after Codrus has spent an initial $100,000 on the project.

Codrus will then have an opportunity to earn a 70 per cent stake in the project by spending an additional $300,000. Talgomine can then contribute to the joint venture or be free carried to a definitive feasibility study or “DFS” at which point Codrus’ interest will grow to 85 per cent.

Once a DFS has been concluded, Talgomine can either contribute to the JV or be free carried to the commencement of mining production. If Talgomine opts to be free-carried then Codrus’ participating interest will jump to 90 per cent.

We secured this opportunity as part of our ongoing business development activities to add further depth to our existing portfolio of gold projects in Australia and the USA. We are attracted to the rare earths sector because of its strong fundamentals and the relative scarcity of quality exploration opportunities.

Management has flagged the acquisition as a “walk-up opportunity” and says it is looking to get boots on the ground imminently ahead of potential drilling activity early next year.

Codrus Minerals leapt onto the local bourse in June last year after ASX-listed nickel-hunter Blackstone Minerals decided to spin out its non-core gold assets into a new exploration vehicle focussed on sniffing out the precious metal in both Australia and abroad.

The gold projects included in the spin-out are the Middle Creek, Red Gate and Silver Swan South assets in Western Australia and Bull Run in Oregon, USA.

Middle Creek sits in the heart of WA’s Nullagine district, a zone made famous by gold producer Novo Resources’ namesake operation which boasts a 1.8 million tonne per annum processing facility and an indicated mineral resource of 6.6 million tonnes at 2.1 grams per tonne for 470,000 troy ounces of gold.

According to Codrus, Middle Creek is free of historical drilling and offers up a handful of compelling targets which have thrown out rock chip grades of up to 1 g/t gold.

A stone’s throw away at the Red Gate project, recent activities have seen the explorer chalk up a slew of solid intercepts in RC drilling programs including 5m at 14.29 g/t gold from 27m inside a larger 23m parcel going 3.82 g/t from just 14m

Results from another hole at Red Gate include 24m at 1.04 g/t gold from 42m. Encouragingly, the ground around the asset has delivered success for a number of companies including Northern Star Resources with its 1.4-million-ounce mining centre about 10km south.

Codrus’ final WA-based asset is Silver Swan, a project prospective for both nickel and gold that sits along strike from Northern Star Resources’ 5-million-ounce Kanowna Belle gold mine and along trend from Poseidon Nickel’s 2 million tonne Silver Swan mine.

Outside of its domestic operations Codrus’ is also seeking gold in the US with its Bull Run project between Idaho and Oregon. Legacy operations in the zone have yielded a handful of notable intersections including 22.9m at 1.2g/t gold from 22.9m inside a broader 44m plus envelope running 0.73 g/t from 10.7m.

Over the past year the company has completed IP surveys, mapping, sampling and drill targeting programs at Bull Run and plans to drill test compelling prospects later this year.

Blackstone currently holds a 50 per cent stake in the newly listed explorer and the spin-out paves the way for the company to focus on its flagship Ta Khoa nickel-copper-platinum group element project in Vietnam.

With recent studies tipping the shift to clean energy solutions is driving demand for rare earths to over 304,000 metric tonnes per year - about 100,000 tonnes over today’s requirements - Codrus could find its new acquisition an astute piece of business.

And with the market already tuned in to the crazy share price growth of WA1 Resources on the back of its niobium-rare earths discovery, the heavy lifting has already been done – now for some action with the drill bit.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au