Your bang on
Great Western Minerals Group (TSX-V: GWG) Mine to Market of Rare Earth Elements
By Allen Alper and Jeff Senior
With mining properties and manufacturing plants that produce permanent magnet alloys, Great Western Minerals covers both ends of the rare earth spectrum. And with plans to have a new resource in full production by 2013, it is well placed to profit from the increased demand for rare earth metals.
Executive Chairman Gary Billingsley
The company is headquartered in Saskatchewan, Canada, where Executive Chairman Gary Billingsley and most of his management team are based. In total, there are about twelve staff in Saskatchewan and over fifty globally, numbers which seem set to grow.
Current Expansion
Much of the expansion is currently focused on the, former producing, Steenkampskraal rare earth mine in South Africa, where a feasibility study is currently being completed. At the same time, the workforce is being increased, as Gary confirms: “We’ve put in place a Project Manager and a Site Supervisor down there and we have a Radiation Protection Officer, which is critical when you’re working with radioactive minerals.
“Then we’ll be adding a few geologists shortly so the team is being put into place to get things up and running at the site. We have also brought on people internally for separation and metal making. In addition, we’re talking to groups that we might form a strategic alliance with to build separation facilities for us in South Africa.”
Steenkampskraal is classed as a light deposit but will produce significant quantities of heavy rare earths due to the high grade of the ore. The company is particularly interested in the light rare earth Neodymium and the heavy rare earth Dysprosium for its permanent magnet alloy manufacturing facility and plans to separate both the heavy and light elements.
An aggressive exploration program is being launched and the goal is to have everything operating at Steenkampskraal by January 2013, which is six months earlier than previously planned. Gary says: “Originally, we anticipated about mid-2013 but we have just received all our approvals from the National Nuclear Regulator in South Africa. The site not only has a mining permit but it also has a Nuclear Authorization. As part of that authorization, we have to demonstrate to the National Nuclear Regulator (”NNR”) that we have the procedures in place for all aspects of the operation, and we recently received NNR approval for those procedures ”
Other Mining PropertiesGreat Western Mineral’s other main mining property is the Hoidas Lake rare earth project in northern Saskatchewan. As Gary recounts, this is now moving on from a hesitant start: “The increase in rare earth prices only happened recently and at the time we finished drilling off Hoidas to get a 43-101 compliant resource, the recession hit and prices tumbled. So when we were looking at the metallurgy, because Hoidas is in a semi-remote location and it’s about an 800 kilometer trip, transportation costs became a big proportion of the operating costs.
“At the time,, the in situ value of the rock in the ground at Hoidas was $300-400 a ton, so the economics were modest. That forced us to work on the metallurgy to optimize it and a laboratory in China came up with a process that we are now using to carry out a pilot plant test. If that’s successful, we hope to roll right into feasibility work at Hoidas Lake with that production data because the in situ value of that rock now is closer to $4000 a ton with the increase in rare earth prices.
“About 26% of the material at Hoidas Lake is Neodymium and Praseodymium, which are magnet materials. Even if the Cerium and Lanthanum prices fall, like we anticipate they could, there’s still a lot of value left in Neodymium. We’ve got high hopes for Hoidas now that we have the metallurgy work done for optimumizing the process. If we can finish the pilot plant work there, we’ll proceed right through to feasibility and try to target 2015-16 for production.”
Other projects in Saskatchewan are still at an early stage. These include the Douglas River property in the Athabasca Basin, which will provide Dysprosium that is used in the manufacture of permanent magnets to enable them to work at high temperatures, and the Red Wine Complex that is rich in heavy rare earth and has provided good drill results.
Manufacturing Capability
Everything is more established on the manufacturing side, with plants in Birkenhead, England and Troy, Michigan. The UK plant, Less Common Metals Limited, has been a producing and profitable manufacturing plant since 1992. Gary remarks: “It has a very long history of not just working with permanent magnet alloys but actually helping to develop specific alloys for some of our customers such as Aichi Steel, a Toyota Group company. They keep coming back to us because we have the ability to help them with development.”
The plant in Troy started as an R&D facility. “We bought that plant more as a strategic asset,” comments Gary. “We thought that, as politicians and manufacturers in the US realized that China had control of a lot of these materials, it would be prudent to bring the manufacturing back to the US. This plant would be well positioned to be part of that supply chain. We are actively talking to groups that are interested in re-establishing manufacturing of magnets and batteries in the US. But the plant has also been very useful in helping groups do R&D on things like aerospace materials.”
The company has worked successfully with the Department of Defense to help develop aluminum alloys for aerospace. There is the potential for some of this to he commercialized, which will boost production. Additionally, there are high hopes that magnetic production, rechargeable battery production and other industries that use rare earths will be re-established in the US, which is likely to be the future direction of the Troy plant.
The company’s major strength is that it has both mining resources and production facilities, being able to combine the two to the best effect for the business. Gary says: “We realize that our resources aren’t the biggest on the planet but they’re the resources that most closely match the requirement for the materials that we make. And we are actively looking for other sources of supply that match similarly to what we produce so that we aren’t stuck trying to get rid of mounds of Cerium and Lanthanum.
“When you’re looking at our company, you have to consider the entire package, from our resources that are tailored to our production to the fact that we actually have a solid customer base. Plus, once the guys that make the permanent magnets know the material is available, really the sky’s the limit as far as production goes from our facilities.”
AI
