Oro Verde Limited (ASX: OVL) has announced an encouraging update on its Makuutu Rare Earths Project in Uganda.
The company reported that after positive results from drilling and metallurgical test work confirming the significant potential for the Makuutu Rare Earths Project, a Scoping Study is expected to start immediately.
OVL said that the expenditure on the Scoping Study will result in the Company’s interest in the project increasing to 51%.
Oro Verde said that a maiden JORC mineral resource estimate is underway with delivery expected in 1st Quarter 2020.
The company announced that a follow-up drilling, advanced metallurgy, and process design work will be undertaken concurrently with the mineral resource.
Oro Verde also said that it will re-brand as Ionic Rare Earths to align with the Company’s core focus.
The company said that the initial discussions were held with potential off-take and investment partners.
The Makuutu project comprises three licences covering approximately 132 km2 located some 40 km east of the regional centre of Jinja and 120 km east of the capital city of Kampala in eastern Uganda.
The Company had defined an Exploration Target of 270 – 530 million tonnes grading 0.04 – 0.1 % TREO at the Makuutu project in September 2019.
The Makuutu Rare Earths mineralisation occurs from surface to depths of 15-20 metres where simple shallow mining methods will be applicable.
Oro Verde has acquired an initial 20% interest in the Project and may acquire up to a further 40% interest via an “earn-in” process through the expenditure of funds, bringing its total potential interest in the project to 60%.
The Makuutu Rare Earths Project is one of the largest known ionic clay deposits outside China with a previously-announced exploration target
Scoping Study to start soon
The company announced that the Board has approved the immediate start of a Scoping Study for the Makuutu Rare Earths Project in Uganda.
The decision follows the recent release of results from initial metallurgical test work that achieved excellent recoveries, particularly for the high-value Heavy Rare Earth Elements (HREE)
OVL said that the Scoping Study will be driven by the Company’s recently appointed Project Manager, Mr. Tim Harrison, who brings 20 years’ experience in metallurgy and project development.
Activities included in Scoping Study
The company announced that the Scoping Study will involve a significant body of work over the next six to nine months, and would include activities like the in-fill drilling of already drilled areas to provide further resource definition and also provide sample for additional metallurgical testing; and exploration drilling in areas that are only sparsely drilled or are yet to be drilled.
It would also comprise of calculation of a maiden Mineral Resource Estimate; metallurgical process development test work to support preliminary engineering; resource development and mining studies; preliminary Environmental and Social Impact Assessments (ESIA); preliminary mining, tailings, and infrastructure assessments; and product marketing and engagement with potential off-take partners.
Maiden MRE in Q1 2020
The company announced that, based upon results from drilling completed in late-2019, it expects to release the maiden Makuutu Mineral Resource Estimate in the 1st quarter of 2020.
The company said that additional drilling will commence shortly to collect bulk samples and additional core samples from within the resource for advanced metallurgical test work; test for mineralised extensions to the mineral resource; and convert mineralisation identified in the area of the Exploration Target to resource status.
Name change for Oro Verde
The company announced that the Board has proposed changing the Company’s name to Ionic Rare Earths Limited.
OVL said that the Board believes the new name better reflects the Company’s future focus on developing Makuutu and has been drawn from the ionic clay-type geology of the Project.
It may be noted that the name change is subject to shareholder approval at a General Meeting which is expected to be held on March 18, 2020.
The company announced that work will commence immediately on multiple workstreams, including an extensive drilling program and advanced metallurgical test work, with all results feeding into the Scoping Study which the Company aims to deliver in the 2nd half of 2020.
This milestone and the associated expenditure will result in Oro Verde’s interest in the project increasing to 51%.
Oro Verde Technical Director Dr. Marc Steffens said: “This is a significant milestone to have reached just seven months since acquiring our initial interest in Makuutu. Everything we have seen to date gives us confidence that this project has the potential to be a major rare earths development and a key strategic alternative supplier to Chinese sources.
We understand that clay-hosted deposits are currently the lowest-cost sources of rare earths in the world and our early test work has shown Makuutu can achieve a favourable concentration of high-demand and high-value rare earths using simple low-cost mining techniques and simple static leach processing.
Importantly, the delivery of the Scoping Study will enable the Company to the meet conditions required to further increase our ownership interest in Makuutu.”