While the focus has been primarily on gold this year – what with prices soaring into the stratosphere – other minerals, at least as rare, have longed for their place in the sun, and appear to have found them in the middle of October.
As the fourth quarter of this year got a little bit older, word came down from Vancouver-based junior miner Rare Element Resources Ltd. (TSX-Venture: RES) of new rare-earth-element (REE) mineralization on its property in Wyoming. With some help from allied firms such as Newmont North American Exploration Ltd., a subsidiary of Newmont Mining Corporation (NYSE:NEM), RES was able to locate a rich area of such minerals on its Bull Hill property. A detailed geological mapping of the FMR vein by Newmont showed strong evidence that these elements were to be found. The FMR veins consist of iron and manganese oxides, altered silicates, amorphous silica, and minor to significant REE minerals.
Mining on its Bear Lodge property is set to begin sometime this fall, if the elements cooperate.
The size of the geophysical anomaly (approximately 1,400 by 2,000 feet) provides an indication that this REE target may be larger than others in the district. One hole on the property, dating back to the late 1980s, intersected 430 feet of strong REE mineralization averaging 2.44% rare earth ore (REO). Within the larger intercept were several 10-foot intercepts with grades ranging from 5.5 to 13.7% REO.
The word "rare" cannot be overemphasized. The use of rare earth elements in modern technology has increased dramatically over the past years. For example, dysprosium has gained significant importance for its use in the construction of hybrid car motors. But new demand has strained supply, and shortages may result. In several years, worldwide demand for rare earth elements is expected to exceed supply by 40,000 tonnes annually unless major new sources are developed.
RES is a publicly traded mineral-resource company focused on rare-earth elements and gold. In addition to the REE exploration and evaluation efforts, the company and Newmont are collaborating on the Sundance gold exploration joint venture on RES's Wyoming property. Gold exploration drilling began in July for the 2009 program, and rare earth drilling began in August.
Earlier this month, RES announced it had purchased a 100% interest in the Eden Lake Rare Earth Elements project in Manitoba from VMS Ventures Inc. (TSX-Venture:VMS), an area spanning 28 square kilometres, which is home to REE-enriched minerals including strontium-REE-apatite, britholite, allanite, and REE mineral inclusions in andradite garnet.
The prospects for this junior miner – technically, still a penny stock, under the SEC's definition – are making watchers of this sector sit up and take notice. RES's price has faded somewhat from its 52-week high of $4.69 (achieved early in October) to around the $3.50 mark, but still well above last November's low of 26.5 cents. As the search for REEs continues, interest in the industry – and this company in particular – could spike.
Disclosure: The author has not been compensated nor do they hold a position in the above mentioned Companies.
