Rare find to boost profits
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