Rare find to boost prof­its

Townsville Bulletin - - Investor - by Tony Rag­gatt tony. rag­gatt@ townsville­bul­letin. com. au

THE prospects for de­vel­op­ment of an­other phos­phate mine in North Queens­land have been bright­ened by the dis­cov­ery of a rare earth el­e­ment, yt­trium, in the over­bur­den of the de­posit.

While the yt­trium de­posit is still be­ing as­sessed, the man­ag­ing di­rec­tor of Townsville-based ex­plorer Kru­cible Met­als Ltd, Tony Al­ston, said the rare metal, used ex­ten­sively in elec­tron­ics, could be worth nearly as much as the phos­phate re­source it­self, which at present val­ues of about $ 150 a tonne is worth about $ 750 mil­lion.

‘‘ If the yt­trium comes off, that will dra­mat­i­cally af­fect the eco­nom­ics of the pro­ject,’’ Mr Al­ston said.

‘‘ That will pay for the pre­strip­ping.’’

Kru­cible Met­als found the phos­phate de­posit at its Korella t en­e­ment about 150km south of Mount Isa while search­ing for ura­nium, cop­per and gold in 2008.

De­spite its prox­im­ity to Incitec Pivot’s Phos­phate Hill mine, ge­ol­ogy mod­els had sug­gested the phos­phate should not be there.

But it was, cov­ered with about 20m to 30m of over­bur­den ma­te­rial, and in­clud­ing a high grade re­source of five mil­lion tonnes at 30.8 per cent phos­phate.

The com­pany is now work­ing on pre-fea­si­bil­ity stud­ies to de­velop a mine pro­duc­ing 600,000 tonnes of phos­phate rock and is one of sev­eral play­ers in north­ern Aus­tralia look­ing to cap­i­talise on grow­ing de­mand for phos­phate and dwin­dling sup­ply.

Mr Al­ston said the yt­trium find was dou­bly for­tu­itous for Kru­cible Met­als.

‘‘ I sup­pose you could say we have been lucky,’’ he said.

‘‘ There has also been a lit­tle bit of vig­i­lance on our part, keep­ing a close eye on the anal­y­sis of what is there.’’

Mr Al­ston said ore grade val­ues of yt­trium came up in only two of its 130 drill holes, how­ever, it did prompt the com­pany to take a closer look by re-as­say­ing its drill hole data­base.

What they found was a con­sis­tent blan­ket of yt­trium en­rich­ment ly­ing im­me­di­ately above the high­grade phos­phate zone.

Yt­trium is a com­po­nent in sev­eral in­dus­try sec­tors but is used in com­put­ers, mo­bile phones, tele­vi­sions, hy­brid cars, com­mu­ni­ca­tions, wind and jet tur­bines and for wa­ter treat­ment.

It cur­rently sells for about $ 85/ kg for metal and $ 70/ kg for power.

Mr Al­ston said min­er­alog­i­cal and met­al­lur­gi­cal test work needed to be done to de­ter­mine the char­ac­ter­is­tics and com­po­si­tion of the ore be­fore any eco­nomic fig­ures could be ap­plied.

How­ever if amenable to ben­e­fi­ci­a­tion, the yt­trium zone could be an im­por­tant eco­nomic fac­tor.

A pre-fea­si­bil­ity study, mean­while, is un­der way into de­vel­op­ing a phos­phate mine which a scop­ing study found had a net present value of $ 82 mil­lion at an ex­change rate of 90c to the US dol­lar.

With phos­phate rock now priced at up to US$ 160 a tonne, concern about se­cu­rity of sup­ply from un­rest in the Mid­dle East and north Africa and world de­mand al­ready out­strip­ping sup­ply for a vi­tal in­gre­di­ent in agri­cul­ture, Mr Al­ston said Kru­cible Met­als was sitting on a ver­i­ta­ble gold mine.

Kru­cible was trad­ing about 2c lower at 18c a share yes­ter­day.

PRE­CIOUS METAL: Glen­garry ex­plo­ration di­rec­tor Tony Al­ston

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