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Quantum Rare Earth Snaps Up Elk Creek For Expanding REE Empire
By Jonathan T. Orr
GreenTechnologyReport.com
Thursday, June 10, 2010
When we last talked to Quantum Rare Earths (TSX.V:QRE) CEO Peter Dickie, he laid out his plan for quietly building up a rare earth empire in North America to secure a domestic source of REEs to power our accelerating transition from the clogged fossil fuel highway to the open roads and lush views of a green world of rare earth dependent hybrid vehicles. Dickie talked of acquiring a precise portfolio of properties that would be strategically located, in politically stable jurisdictions and in scaled stages of the REE production cycle.
Well Quantum certainly has a rare talent for timing and strategy. This was powerfully demonstrated last month by the company’s purchase of Elk Creek Resources Corp. and its Elk Creek carbonatite in southeastern Nebraska, a property that the US Geological Society estimates may hold one of planet’s largest deposits of niobium and rare earth elements.
Dickie further delineated Quantum’s strategy for moving forward: “The Elk Creek Carbonatite is a highly sought after project which we strongly believe carries the potential to host substantial deposits of both niobium and rare earth elements. Once we have completed the compilation of the historic data, we plan on aggressively pursuing exploration and development of this project through our new subsidiary, Elk Creek Resources, following the recommendations that will be forthcoming in the NI43-101 report.”
In a perfect piece of synergistic hiring Quantum has added Mr. James Allan M.Sc. P.Eng, to the Company’s Board of Directors. Since Allan has extensive experience in the exploration for, and evaluation of, rare earth deposits both as manager of exploration in Canada for a large rare earth company (Molycorp Canada) from 1982 to 1990 and as an independent consultant the fit couldn’t be more perfect.
With the purchase of Elk Creek coming swiftly on the heels of Quantum’s exceptional initial sampling results at its Archie Lake property in Saskatchewan it is becoming clear that the companies’ quietly confident and carefully calibrated strategy toward developing a North American rare earth empire is happening apace and strategic investors will surely want to be building with them.
Perfectly Poised
Unlike gold, which hardly needs to be removed from the earth to calculate and capitalize on its long established value, REE projects must strike an exquisite balance between bringing property development and production forward in tandem with the wider acceptance of the new technologies that employ these exotic metals. This must be done while scaling overall production up to the delivery stage precisely as demand surges and China begins to reduce exports of its huge stock of REEs, allowing your company to slip into the gap and take your place as a pioneering producer.
When you consider the elements that are lining up for Quantum it’s easy to see that this is the strategy the company has been pursuing with precision and patience and it is one poised for a big payoff.
The purchase of Elk Creek comes hot on the heels of the US governments announcement of initial steps toward a $1.2 billion strategic plan for the development of domestic rare earth supplies to ensure that the US has unfettered access to the REEs that play an ever critical role in advanced military and ever-expanding green technology industries. Elk Creek, with the US Geological Society estimating it as having one of the continent’s largest RE deposits, may well become a direct focus of new US strategic policy.
Niobium: A similar story arc to rise of REEs
Not only does Elk Creek host tremendous potential as displayed by past drilling results for REE’s, but the large-scale project also has incredible potential for Niobium. And the Niobium market story is eerily similar to that of REE’s. Niobium is one of the five major refractory metals (metals with very high resistance to heat and wear), with the others being tungsten, molybdenum, tantalum and rhenium. Primarily used in producing high-strength, low-alloy steel, the metal finds itself in jet engines, gas pipelines, car parts, and a host of other uses. Niobium, nothing if not versatile, is also a critical element in superconductors and electronics but it’s the emerging green technologies, such as the hybrid car batteries and the magnets used in wind turbines, demand for these minerals that will exert the most pressure on supply.
Global green-tech leader China currently delivering over 90 percent of the most commonly used rare earth elements imported to North America (and indicates it will soon divert most if not all of that to its own clean tech sector). Similarly, South American powerhouse Brazil is responsible for the supply of over 80 percent of the niobium required to maintain and improve our infrastructures. It is obviously critical that a stable domestic supplier of rare earths and niobium must come online sooner rather than later. Quantum, with both Archie Lake and Elk Creek in its pocket, may be the rare earth and niobium rescue we are looking for.
Elk Creek Carbonatite
The Elk Creek Carbonatite, located in southeastern Nebraska, is an intrusive complex of carbonatite and related rocks and is host to significant niobium and rare earth element (REE) mineralization. The Elk Creek Carbonatite is evidenced by diamond drilling in an oval-shaped magnetic and gravity anomaly approximately 7 kilometres in diameter, making it one of the largest known carbonatite complexes. According to the US Geological Survey, “The Elk Creek carbonatite, located south of Lincoln, has the potential to be one of the largest global resources of niobium and rare earth elements (REE)”
Historic exploration of the property was conducted by the State of Nebraska, Cominco American and Molycorp, Inc. during the 1970’s and 1980’s. At least 113 core holes were completed within the outline of the 7-kilometre diameter geophysical anomaly. Detailed drilling of 25 holes was completed within a core zone, which identified high-grade niobium mineralization. This drilling resulted in a historic resource estimate of “39.4 million tons of 0.82% Nb2O5 and is open to the north, west and at depth” (Molycorp, Inc. internal memorandum, Feb 05/1986). By comparison, the only operating Niobium mine in north America earned its owners $90 million dollars last year, producing at a grade of approximately 0.62% Nb2O5.
Quantum believes that these historical drill results and estimates provide a conceptual indication of the potential of mineral occurrences within the project and are relevant to ongoing exploration. The Company intends to confirm the resource estimate through drilling as soon as possible.
Archie Lake
Although the Elk Creek property may take pride of place in Quantum’s growing property portfolio, the company, true to its stated plan of careful acquisitions, also holds the mining rights to another highly promising rare earth property in proximity to Archie Lake, Saskatchewan. The property recently produced some fairly astonishing results from an extensive sampling program, with 18 samples exceeding two percent rare earth and yttrium, and 6 exceeding five percent and 3 exceeding ten percent. These results certainly give credence to the U.S Geological Survey’s belief that Archie Lake is one of the top ten unexplored rare earth properties in North America.
Next Steps for Quantum
Dickie enthused that “We are extremely pleased to have secured the Elk Creek project which we believe has the potential to host world-class deposits of both Niobium and Rare Earth Element and we anticipate receipt of our initial 43-101 report in early June, and plan on following up with the recommendations included in that report as soon as possible. This will include compilation of all of the historic data, followed by confirmation and expansion drilling.”
These are the powerful factual weapons that are now part of Quantum’s arsenal: a growing precise rare earth property portfolio including Elk Creek in Nebraska and Archie Lake in Saskatchewan; US government policy seeking a secure domestic REE source, a rapidly accelerating hybrid automobile industry, a pending crash in global supply of REEs, and a skyrocketing and seemingly endless demand for personal electronics. It’s a strong hand indeed. Astute readers will see that there is a surging demand for these exotic minerals and a strategic need to secure their continued domestic supply to a green technology hungry continent and that Quantum hold two aces in their hands the form of Elk Creek and Archie Lake. Smart investors will want to be there when they throw those cards down.
Follow the company’s progress at: http://www.quantumrareearth.com.
DISCLOSURE: A fee has been paid for the production and distribution of this article and as such should be viewed in the context of advertising.
SOURCE: http://www.midasletter.com/news/100610_Quantum-rare-earth-snaps-up-elk-creek.php
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