GéoMégA Resources (CVE:GMA) is a Montreal based exploration company with a portfolio of 20 properties that are all located within the Province of Quebec. The Company is focused on the discovery and development of strategic metals and includes the Rare Earth Elements of Neodymium and Tantalum, and is rapidly advancing drilling at the Montviel Project, which is developing into a potential world class Neodymium resource.
The Montviel Rare Earth Element Project is now 100% owned, with a Net Output Royalty of 2%, and payment of $4.5 million due to NioGold (CVE:NOX) upon securing 70% of the capital requirements for commercial production. Montviel is directly accessible by gravel road and is within 50 kilometres of electric power lines, road and rail links; and is located 200 kilometres north of the town of Val-d’Or in the Abitibi region of Quebec.
The property covers 159 mining claims for 8,830 hectares and is underlain by the Montviel carbonatite complex, which is one of North America’s largest known carbonatites, covering 32 square kilometres with a 3.1 square kilometre core.
The Company completed a Phase One diamond drilling program in April of 2011, for 9,567 metres over 19 holes. This program reported outstanding results in that the first 7 holes confirmed a mineralized zone carrying significant Rare Earth Elements, measuring a strike of approximately 300 metres, width of 400 metres, and vertical depth of 450 metres.
The first 2 diamond drill holes included MVL-11-01, which reported 480 metres of 1.24% Total Rare Earth Oxides, with Neodymium Oxide of 0.22% from a depth of 21 metres; and MVL-11-03 reporting 512.7 metres of 1.38% Total Rare Earth Oxides, with Neodymium Oxide of 0.23%, with the other 5 holes intersecting significant mineralization of a similar tenor.
The most recently released assays for drill holes MVL-11-09 and MVL-11-10, which are the 8th and 9th holes in the program, confirm that the mineralized zone of Rare Earth Elements extends 200 metres further west along strike, and an additional 175 metres south. The mineralization is now defined over a strike line of 500 metres for a conceptual tonnage target of approximately several hundred million tonnes.
Drill Hole MVL-11-10 reported 1.41% Total Rare Earth Oxides over the entire 544.6 metre core, with Neodymium Oxide of 0.247%. Drill Hole MVL-11-09, 200 metres west of MVL-10-03 reported 1.51% Total Rare Earth Oxides over the first 127.55 metres of core, carrying Neodymium Oxide of 0.216%.
The total strike length of the mineral bearing carbonatite identified in the Phase One drilling program covers 700 metres by a width of 400 metres, with results from the remaining 10 holes outstanding, but providing additional and significant upside potential for expanding the tonnage of the resource.
These impressive results confirm that the Company is in the early stages of defining one of the world’s most significant deposits of Neodymium, which lies beneath a vey shallow cover of barren material that should be amenable to low cost open pit bulk mining techniques.
GéoMégA awaits assay results from the remaining holes and is already commencing mineralogical and metallurgical tests, with the intention of completing an initial NI 43-101 Compliant Resource Estimate by the end of August of 2011. Environmental baseline studies are already underway, with all of the technical work feeding into a Preliminary Economic Assessment Study scheduled for the second quarter of calendar 2012.
Industrial Minerals Co. of Australia forecasts shortages of Neodymium, Europium, Terbium and Dysprosium by 2015, due to heavy demand and lack of supply outside of China. Current worldwide demand for Neodymium is estimated at 39,000 tonnes per year, with a supply deficit of 6,400 tonnes, which is the largest supply imbalance for any of the Rare Earth Elements.
CIBC Markets forecasts a 2015 price for Neodymium of US$76.78 per kilogram, or an annualized supply deficit valued at US$491 million. The U.S. Department of Energy has also forecast that the demand for Neodymium is driven by clean energy applications and that supply risk has now reached critical levels.
Demand is driven by production of high powered electric magnets for electric motors and wind power infrastructure which requires one metric tonne of Neodymium Oxide for every 3 MW of wind power electric power capacity. The World Wind Energy Association notes that wind power capacity increased by 38,312 MW in 2009, and demand for an additional 1.74 million MW is possible by 2020.
J.P. Morgan forecasts annual sales of hybrid cars rising to 11.28 million units by 2020, from 480,000 hybrid cars in 2008. Geoff Hiscock, writing for The Australian forecasts that 55% of all Rare Earth Element demand will be soaked up by wind turbines and electric motors by 2014, which offer significant weight advantages over other metals.
The Japanese and German Governments are also looking to displace energy production from nuclear sources with alternative energy sources, following on from the Fukushima nuclear reactor crisis. The German Government is contemplating the shut down of its entire nuclear energy complex, and making a big push into renewable energy sources such as wind farms, solar and biomass, which will add to the demand for Rare Earth Elements.
GéoMégA currently estimates that the Montviel Deposit averages 2.3 kilograms per tonne of Neodymium, which could be valued at approximately $176.60 per tonne, when applying forecasts for 2015 pricing. On a gold equivalent basis this equates to a grade of 3.5 g/t gold, providing extremely rich ore for a bulk open pit operation, before adding credits for other Rare Earth Elements.
The additional elements include Cerium, Lanthanum, Praseodymium, Samarium, Gadolinium, Dysprosium, Europium and Yttrium, which when added to the Neodymium were valued within a range of US$2,012 to $3,799 per ton of ore contained within the bounds of the first 7 holes. These high grade numbers provide a rich incentive to fast track the project through to feasibility studies, which will provide a much clearer picture of the upside potential of Montviel.