East Star Resources Plc, the Kazakhstan-focused gold, copper, and now rare earths explorer has announced a farm-in to the Talairyk Ionic Adsorption Clay (IAC) Heavy Rare Earth Element (HREE) project in the Kostanay region of Kazakhstan.
- Low-cost entry to a geologically de-risked IAC hosted HREE deposit.
- 19 962 t of contained Total Rare Earth Oxides (TREO) including 4300 t of yttrium oxide at average of 7.5 m from surface (1994 resource model).
- Average 786g/t TREO in IAC profile up to 58.6 m thick – same geochemical signature as the IACs of South China from where most of the world’s HREEs are currently supplied.
- Database includes 128 core holes and 61 auger holes for 3755 samples.
- Exploration upside within the licence across similar weathering profiles over prospective basement lithologies and with potential for regional expansion.
- IAC peers generally have lower CAPEX and lower OPEX than hard rock rare earth projects and a higher average basket price of >US$80 kg REO (Argus Metals pricing at 30 April 2022).
- Farm-in terms up to 90% ownership:
- No cash payments.
- First tranche of US$250 000 in shares for 51% after expenditure of US$500 000 including planned drilling and initial metallurgical test work.
- Second tranche of US$250 000 in shares for 75% after expenditure of a further US$500 000 which will include scoping study level feasibility assessment.
- Additional expenditure secures up to 90% of the asset on a contribute or dilute basis.
- The company is fully funded from existing cash reserves to complete this transaction along with the current exploration programme across all its projects.
Alex Walker, East Star CEO, comments:
“The Talairyk project represents the exact reason East Star is focussed on Kazakhstan. There are very few places in the world where a company can find a project of this quality and potential and with this amount of data that has not undergone any work since 1994. The deal structure presents very little risk to East Star given no share-based payments are made until a significant amount of work is done. This will include re-drilling much of the existing deposit, extensional exploration, and conducting initial leach test work. We have already begun the process to get all approvals for drilling and are very excited to start work to quickly advance this asset in the critical mineral space. The market dynamics for rare earths are extremely compelling, driven by the green energy transition and a desire to reduce dependence on China for supply.
“We are also very excited to be working with Phoenix, our JV partners, whose principal shareholders include a highly experienced mining executive with existing gold production and several other exploration licences in Kazakhstan, and the Head of Natural Resources for a global law firm who was rated by ‘The Legal 500’ as the ‘Leading Lawyer in Kazakhstan’ in 2013 and 2014.”
Read the article online at: https://www.globalminingreview.com/mining/18052022/east-star-resources-secures-farm-in-to-rare-earths-project/