GeoMega’s Montviel is no longer a secret

“The secret will be out with the initial resource estimate,” said GeoMega‘s (GMA-V) president Simon Britt, referring to the potential at the company’s Montviel carbonatite rare earth elements (REE) property in Abitibi, Que.

Britt made that comment in an interview just days before the company released its initial resource for the project’s Core zone.  In a press release today the president of GeoMega congratulated his team for outlining a substantial total rare earth oxide (TREO) resource.  

 “A round of applause for GeoMega’s technical team who within its first year since the IPO, masterfully identified one of the largest indicated resource of TREO outside China at our 100%-owned Montviel property,” he said.

The Core zone hosts an indicated resource of 183.9 million tonnes grading 1.45% TREO, plus an inferred resource of 66.7 million tonnes of 1.46% TREO. Based on 19 holes from the first phase of drilling at Montviel, the estimate used a TREO cutoff grade of 1%. A second phase of drilling is currently underway.

In both indicated and inferred, the TREO content largely consists of light rare earth oxides (LREO), with only a slight percentage containing intermediate- and the often coveted heavy rare earth oxides. But this is perfectly fine with GeoMega as it has its heart set on the light rare earth oxide, neodymium. Though some may argue neodymium is not exactly scarce, Britt says otherwise. His company is touting Montviel’s “world-class” neodymium resource as the meat in the loaf, adding the project is near surface and close to existing infrastructure.  

“What we would like to see is something economic just on neodymium alone,” said Britt. “Neodymium has very strong demand fundamentals with the emergence of clean technologies: hybrid electric vehicles, wind turbines. And it’s one of the big deficits as we move forward, creating opportunities.”

Permanent magnets containing neodymium make up the largest rare earths market in both value and volume, says GeoMega, explaining heat-resistant neodymium-iron-boron magnets or neo-magnets are predicted to bring in the most sales in the coming years. These magnets are used in computer hard drives and offer notable advantages in permanent magnet motors for hybrid/electric vehicles and in permanent magnet generators for gearless wind turbines.

Global demand for neodymium oxide is projected to reach 35,000 to 40,000 tonnes by 2015, with global supply reaching 30,000 to 35,000 tonnes. The price for neodymium oxide is currently at US$290 per kilogram.

Montviel’s current indicated resource contains 446 million kilograms of neodymium oxide. But it’s too early to say if the resource is economic.

Once GeoMega finishes its ongoing metallurgical tests, which are expected to be done by March 2012, the company will launch a preliminary economic assessment.

Geomega believes the second round of drilling and the metallurgical tests will further enlighten it on the project’s full potential.

A recent initial mineralogical evaluation by SGS confirmed that the project’s mineralized carbonatite mostly contained REE-bearing minerals of the Bastnasite-Synsychite family, which are conducive to concentration and separation.  

Britt noted the property is accessible, which will make it easy for development and securing labour and electricity.

“We have a good gravel road access, sixty minutes from Lebel-sur-Quévillion, which has qualified an available workforce for us. We have good relations with the First Nations.” He added Montviel could receive support from Plan Nord.

Niogold Mining (NOX-V), which optioned Montviel to GeoMega and retains a 2% net output return royalty, is the company’s largest shareholder at 10%. Its other shareholders include all of the three Quebec institutional funds, which each hold a 5- to 7% interest.