Vancouver – A little-known junior explorer based in Elephant Butte, New Mexico (population circa 1,500), has surprised investors with spectacular rare-earth-element assays from its Warm Springs beryllium project in Sierra County, N.M.
David Tognoni’s BE Resources (BER-V) has released the final four drill holes from a 12-hole program started in February, including hole DH3, which intersected 98 feet grading 19.58% total rare earth oxides (TREO) starting from a depth of 1,157 feet. The rare earth mineralization is comprised of about 60% light rare earth elements (cerium, europium, lanthanum, neodymium, praseodymium and samarium) and 40% heavy rare earth elements (gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium and yttrium).
The company only managed to find anomalous amounts of heavy rare earths in the first eight holes, however the recently released holes were said to have been drilled on the periphery of a half-mile-diameter circular structure thought to mainly host beryllium (a hard, lightweight metal resistant to melting that the U.S. Department of Defense considers to be “strategic”).
The best drill hole, DH3, also intersected rare earth mineralization at a depth of 620 feet, including 58 feet of 9.12% TREO, and at 1,582 feet, including 154 feet of 7.8% TREO. Another hole, DH1, intersected 23 feet of 8.85% TREO starting from a depth of 765 feet.
The Warm Springs project lies within the eastern edge of the Datil-Mogollon volcanic field of southern New Mexico, and primarily consists of mafic to silicic extrusive units of Tertiary age and Quaternary basalts.
Originally drilled in the 1960s as part of a U.S. Bureau of Mines project looking for economic beryllium mineralization, a private company named The Beryllium Group LLC later leased the property in 2001. BE Resources’ president, Tognoni, owned part of The Beryllium Group, which completed 14 drill holes there over a two-year period. For reasons unexplained in BE Resources’ prospectus – though perhaps a combination of lacklustre assays and a down time for the junior exploration industry – The Beryllium Group was dissolved in 2002 and cancelled the lease.
By 2004, Tognoni had formed a new company, named Great Western Exploration LLC, and signed another lease for the Warm Springs project. This time, the company completed one deep core hole and seven reverse-circulation holes in outlying areas. It then spun off the property into BE Resources, which went public in late 2009.
Though public records show BE Resources as the only Canadian public mining company to have employed Tognoni in management or director roles, he holds an engineering degree from Arizona State University and has “completed post-graduate studies in geology, aeronautics and meteorology at the Arizona State University, ore reserve estimation at the Colorado School of Mines and mining engineering and finance at the University of Arizona,” according to BE’s latest management information circular. It lists his principal occupation since 1979 as that of an independent consultant to mineral and oil and gas projects worldwide.
President Tognoni received $36,000 for a salary in 2010 at BE, as well as $226,000 in “other compensation” representing “the expense allowance paid to Mr. Tognoni to cover the cost of office space used by Mr. Tognoni and any associated overhead costs.”
He also holds a 24.3% interest in Great Western Exploration, which according to BE’s prospectus was issued 9.4 million shares as part of the transfer agreement for the Warm Springs project. In 2007, Tognoni purchased 1 million “founders’ shares” of BE Resources for $200, or 0.01 of a cent each.
Following the release of the latest assays on July 22, shares of BE resources jumped 782% to close up 66.5¢ to 75¢ on 49.32 million shares traded (including alternative trading platforms). As of May 2011, BE Resources had just 50.04 million shares outstanding, and a 52-week trading range of 5.5¢-$1.30.
I was stationed in New Mexico when in th Army.