Pacific Wildcat confirms rare earths in Kenya (April 18, 2011)

A first round of drill results from the Mrima Hill rare earth-niobium project in southeastern Kenya has given Pacific Wildcat Resources‘ (PAW-V) share price a major boost.

The company’s initial 31-hole, 974-metre reverse circulation drill program was part of a due diligence effort to confirm historic reports of high-grade rare earth elements and niobium in the soil. All 14 holes in the first round hit rare earth mineralization from surface with several holes ending in mineralization.

Hole 3 cut 30 metres grading 8.85% total rare earth oxides (TREO) including yttrium, hole
7 hit 40 metres carrying 5.58% TREO, hole 6 cut 43 metres of 5.25% TREO and hole 2 intersected 30 metres of 6.49% TREO.

As well, hole 15 hit 13 metres carrying 1.44% niobium from 17 metres, hole 16 cut 12 metres averaging 1.99% niobium from 18 metres and hole 17 hit 20 metres averaging 0.83% niobium from 10 met-res, with all holes ending in mineralization.

Pacific Wildcat’s share price jumped 61¢ or 55.5% over two days following the drill results to $1.71 on 5.3 million shares traded.

The latest bump comes on top of considerable share price gains in December and February, as Pacific Wildcat closed Mrima’s acquisition. The company first signed on to acquire 70% of the 1,180-sq.-km project last summer while trading at 18¢.  

Pacific Wildcat is set to start a 1,500-metre diamond drill program shortly to fulfill part of its indirect buy-in agreement. To earn an initial 7% interest in two private British firms, which in turn control 70% of the Mrima project, Pacific Wildcat committed to spend A$1.1 million on the drill program, plus issue 5 million shares with 2 million of those in escrow.

To earn 100% in the two firms, and in turn 70% of Mrima, Pacific Wildcat will have to pay A$15.2 million and issue up to 28.7 million shares. Pacific Wildcat currently has 108.4 million shares outstanding.

The new drill program will include deeper drilling than the 30-metre average depth of the initial program. The area was first explored by Anglo American (AAL-L) and the Kenyan Mines Department in the mid-1950s, but the test shaft work at the time averaged less than 10 metres depth.

The company reports that high rare earth and niobium grades at Mrima Hill are associated with an iron and manganese-rich regolith and enriched saprolite which are weathering products of a carbonatite intrusion.

Pacific Wildcat is also advancing its Muiane tantalum project in Mozambique, with the commissioning of a plant underway and steady-state production expected by June. In March 2010, the company bought a nominal 20- to 30-dry-tonne-per-hour tantalum treatment plant, previously used for producing tantalum from alluvial sources in Western Australia.