OD6 Metals (ASX:OD6) is working to accelerate business development opportunities in other ‘future facing’ commodities, including copper.
The junior rare earths explorer says the sector is currently under pressure with prices returning to historic low levels, which in turn, has seen current producers making little to no profits.
According to OD6, a number of economic studies recently released by its peers place proposed new developments at breakeven, at best, at current prices and require a “substantial increase” in forecast price to enable companies to secure project financing.
“Given current low rare earth prices, OD6 has commenced the examination of alternative business development opportunities, which may include acquiring an additional project, with a focus on copper or gold to complement its flagship Splinter Rock rare earth project,” OD6 says in its September quarter report.
The $3.7 million market capitalisation company is continuing to optimise the forecast capital and operating costs for its Splinter Rock Project, with recent heap leach results a “potential game-changer” for the economics.
Results from column leach metallurgical testing conducted by the Australian Nuclear Science and Technology Organisation (ANSTO) achieved higher leach recoveries compared to conventional tank leaching.
ANSTO achieved 79% magnet rare earth elements (MagREE) from the Inside Centre prospect column leach recoveries, compared to the diagnostic stirred tank leach of 56%.
OD6 says the recoveries for all MagREE’s including neodymium, praseodymium, dysprosium and terbium are high, which is the key to optimising project economics for any clay hosted rare earth project.
Managing Director Brett Hazelden says the heap leach results have delivered higher than expected recoveries and provide the opportunity to utilise a simpler flowsheet.
“These results open a potentially lower capital and operating costs and ultimately enhance the value of Splinter Rock,” he says.
“Given this opportunity we have put the Scoping Study on hold until further test work around heap leach testing can be completed to optimise our 682 million tonne resource at 1,338 parts per million (ppm) total rare earth oxides (at a 1,000ppm cut-off grade).”
During the quarter, OD6 appointed Wayne Bramwell as its non-executive Chairman.
Bramwell, who is also the Managing Director of Westgold Resources (ASX:WGX), is an experienced mining executive with a background in metallurgy and mineral economics.
“The addition of Wayne Bramwell as our new independent Chair, provides OD6 the opportunity to refocus its corporate strategy to target other future-facing metals where OD6 can leverage its exploration and technical capability,” Hazelden says.
“Project evaluation is underway with a strong focus on copper, copper-gold or gold assets.”
OD6 had $1.85 million in cash at the end of the September quarter, with an additional research and development tax rebate expected to be received in the current quarter.
Write to Angela East at Mining.com.au
Images: OD6 Metals
