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GeoMegA estimates 183.9 million tonnes indicated at 1.45% TREO for Montviel

GeoMegA Resources (CVE:GMA) announced Thursday the results of its NI 43-101 compliant mineral resource estimate for the Core Zone at its wholly owned Montviel rare earth elements (REE) project in Quebec.
GeoMegA estimates 183.9 million tonnes indicated at 1.45% TREO for Montviel

GeoMegA Resources (CVE:GMA) announced Thursday the results of its NI 43-101 compliant mineral resource estimate for the Core Zone at its wholly owned Montviel rare earth elements (REE) project in Quebec.

In the indicated category, the estimate found 183.9 million tonnes grading 1.45% TREO. In the inferred category, the estimate reported 66.7 million tonnes at 1.46% TREO.

The resource estimate was prepared by SGS Canada - Geostat, and considers a 1.0% total rare earth oxide (TREO) cut-off grade.

GeoMegA's CEO Simon Britt said: "This world class Neodymium resource is in Quebec (Plan Nord eligible), near surface (open pit potential), road accessible and close to electricity and available labour (60 minute drive from Lebel-sur-Quevillon). Montviel has the potential to play a significant near term role in the clean energy of the 21st century."

The Montviel property, located 200 kilometres north of the town of Val-d’Or in the Abitibi region of Quebec, includes 159 mining claims covering 8,830 hectares. It is situated under 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.

GeoMegA based its resource estimate on the 19-hole, 9,567-metre, phase one diamond drill program it completed on the Montviel property in April 2011. The first seven of 19 holes drilled at this time confirmed a mineralized zone of REE over a strike length of 300 metres.

The first hole, MVL-11-01, returned 480 metres grading 1.24% TREO and 0.22% neodymium oxide at a depth of 21 metres. The second hole, MVL-11-03 found 512.7 metres at 1.38% TREO and 0.23% neodymium oxide. The next five holes intersected similarly significant mineralization.

Hole MVL-11-09, the eighth hole of the program, which was drilled 200 metres west of MVL-11-03, intersected 127.55 metres of 1.51% TREO and 0.216% neodymium oxide. The ninth hole drilled on the property, MVL-11-10, found 1.41% TREO and 0.247%neodymium oxide over 544.6 metres.

The Montreal, Quebec-based company said these results confirmed that the property contains one of the world's most significant neodymium deposits.

Neodymium is most frequently mined for its role in the heat-resistant neodymium-iron-boron magnets, called neo-magnets. These permanent magnets, which represent the largest REE market in both volume and value, are used in computer hard drives, hybrid/electric vehicles, and gearless wind turbines.

Each megawatt (MW) of generation capacity in a wind turbine requires an estimate 150 to 200 kilograms of neodymium. In 2009, 159,213 MW of wind power - equaling only 2% of global consumption - were generated. That number is expected to grow to 1.5 million MW by the year 2020.

Electric and hybrid vehicle sales are also expected to rise to 11.28 million units by 2020, from 480,000 vehicles in 2008.

Global REE demand is expected to reach 180,000 metric tons by 2015, with neodymium demand accounting for between 35,000 and 40,000 metric tons of that. Global REE sales are expected to reach $9.2 million. Neodymium oxide currently sells at $290 per kg.

The Core Zone mineralization at Montviel remains open at depth, and to the south and west, where GeoMegA said the grade tends to increase.

Hole MVL-11-18 from the phase one program intersected 2.15% TREO over 250.65 metres, and was drilled in the western region of the Zone.

Phase two drilling, which commenced earlier this month, continues to focus on defining the high-grade, near-surface resource in the western portion of property.

GeoMegA said it expects to complete metallurgical tests in the first quarter of 2012, during which it will initial a preliminary economic assessment.

"Our goal is to define Montviel as economic based on its Neodymium content alone," Britt concluded.

In the last year, GeoMegA shares have more than tripled. As of markets' open, they were trading at $1.80 on the TSX Venture.

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