Wealth Minerals focuses on rare earths

With Chinese producers choking the supply of rare earths, there’s a race to get new, cheap production from outside of China. Explorer Wealth Minerals (WML-V) is part of that hustle, touting its Rodeo de los Molles deposit in Argentina as one of the largest undeveloped rare earth element (REE) projects in South America.

The 72-hectare project is 300 km southwest of Cordoba city, the second-largest city in Argentina. An old pit hosts a non-compliant historic resource of 5.6 million tonnes grading 2.1% total rare earth oxides (TREO) and 0.02% uranium oxide. The deposit remains open and is near power, water, road and port. 

A private Argentinean company named Michelotti e Hijos delineated the resource in 1992 before Chinese producers started dumping rare earths onto the global market, Wealth’s corporate communications director John Kocela says. When REE prices subsequently crashed, Michelotti “dropped their shovels and left it there. Fifteen years later, we showed up and decided to go ahead with it.”

Wealth Minerals optioned into Rodeo de los Molles last May and is working towards earning a 100% interest with no underlying royalties. To do so, it must make several payments amounting to more than US$3.5 million over five years to Michelotti. 

The company is drilling and confirming Michelotti’s work. “They had excavated the pits and stockpiled much of the mineralized material,” Kocela explains. “We went over and assayed it. We believe that the resource they have outlined might be real. But we still have to 43-101 that.”

Wealth Minerals has drilled 26 holes, from which it released six assays. Highlights include 0.69% TREO over 38 metres, and 0.85% TREO over 33 metres.

Discovered in the 1980s, the deposit is hosted in fenitized alkali igneous rocks in the Las Chacras igneous complex and contains mostly light REEs, such as neodymium and praseodymium. The company says the asset is geologically comparable to Molycorp’s (MCP-N) Mountain Pass project in California, where mineralization is primarily bastnasite.  

Rodeo de los Molles has two main zones: La Juli and Mina Norte, where stockpiles based on 61 and 38 samples, respectively, average 2.02% TREO and 1.55% TREO. The third, less explored zone is El Rulo. 

The explorer is designing a second phase of drilling, which is expected to contain more than 10,000 metres to help define a NI 43-101 resource on the project.

Wealth Minerals anticipates having a new resource estimate by early 2012, followed by a preliminary economic assessment.  

Kocela says  if the company updates the historic resource into a compliant one, it could secure Rodeo de los Molles a spot in the world’s top-10 REE deposits. 

“When you think of the rare earth space, we think it’s very much about ‘first past the post,’ ” Kocela says. “There’s a lot of production that is going to come online, and that won’t be for another couple of years. So anyone who has any designs of doing well in this business better have a game plan that falls between now and then. And clearly we do.”

Wealth Minerals recently closed at 20¢, near its 52-week low of 16.5¢ on Sept. 30. The company hit  its 52-week high of $1.34 on Jan. 17. It also has three main uranium projects in Argentina, and has seen its share price suffer since the Fukushima nuclear disaster in March.