ASX ANNOUNCEMENT
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4 September 2012
Malilongue Project: Rare earth prospectivity confirmed and extended
KEY POINTS
All first phase soil geochemical assays received
Significant TREO prospect at Vundu confirmed
Large TREO prospect at Tombalala identified
Heavy rare earth prospectivity increased;
- Alluvial xenotime pebbles assay 40% TREO and 27% HREO.
- HREO anomalism in central granite pluton identified
Trenching campaign in progress
Kimberley Rare Earths Limited (ASX:KRE), is pleased to provide a further exploration update for its Malilongue1 heavy rare earths oxide (HREO) project located in Mozambique (Appendix 1). KRE began exploration at Malilongue in March 2012 and recently announced significant rare earth anomalism associated with the initially targeted Vundu prospect (ASX announcement 29 June 2012). The Malilongue geological environment is highly prospective for many types of economic mineralisation and the program has been designed to screen the tenements for all possibilities. All first phase rare earth soil geochemical assay results are now to hand and confirm that the Vundu prospect, located along the northern margins of the Malilongue granite, is a significant rare earth occurrence. A second large anomaly has been identified within the Eastern Pegmatite Field and named Tombalala.
“KRE’s grassroots exploration continues to identify significant exciting mineral prospects at Malilongue. Our exploration team is now working hard to test these quality prospects with an extensive but cost‐effective trenching program prior to the onset of the rainy season in November,” Managing Director, Mr Tim Dobson said.
1 The Company has the right to earn up to 90% of the mineral rights, excluding gemstones, in the Malilongue Project.
ASX:KRE
Kimberley Rare Earths Limited
ABN 20 147 678 779 Directors Ian Macpherson – Chairman & NED Tim Dobson – Managing Director Jon Parker – Deputy Chairman & NED Allan Trench – NED Management Tim Dobson – Managing Director Geoff Collis – GM Exploration Michael Chan – GM Project Dev. Darren Crawte – Company Secretary Head Office Suite 1, 83 Havelock St West Perth WA 6005
Telephone: +61 8 9486 4326 Facsimile: +61 8 9486 4327
Website www.kimberleyrareearths.com.au
Capital Structure
128.2m shares 6.0m 25c, 2014 unlisted options 3.5m 30c, 2014 unlisted options 0.75m 30c, 2015 unlisted options Cash at 31 August 2012
$11.3 million
Market Cap at 31 August 2012
$7.69 million
For further information, please contact: TIM DOBSON Managing Director [email protected] Tel: +61 8 9486 4326
ASX ANNOUNCEMENT
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All first phase rare earth soil geochemical assays received.
A total of 1,847 soil samples have been collected from around the margins of the Malilongue granite using a series of grids. The program was designed to test a number of airborne radiometric anomalies defined within the granite contact aureole, an exploration approach consistent with existing deposits currently being evaluated around the world. Rare earth assay results have now been received from all samples submitted and reveal considerable anomalism from a number of locations (Figure 1).
Figure 1: Soil sample locations showing TREO results.
Vundu confirmed as significant rare earth occurrence
First identified by airborne radiometric survey, and followed‐up by ground‐based surveys, the Vundu target has now been confirmed as a significant total rare earth oxide (TREO) anomaly. Assay results from 670 soil samples collected over the Vundu target reveal that TREO anomalism correlates tightly with the Vundu radiometric anomaly (Figure 2). Values peak at over 1,100 ppm TREO and regularly exceed 5 times background. The coincident soil/radiometric anomaly has a strike of over 3 km and a maximum width of 400 m.
ASX ANNOUNCEMENT
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Figure 2: TREO soil geochemical results over the Vundu extended grid. Geological mapping at Vundu has encountered limited outcrop, however sufficient exposure exists to indicate that Vundu occurs within the contact metamorphic aureole of the Malilongue granite and is associated with a coarser‐grained, more alkali‐rich zone which is consistent with the anticipated geological model. Initial trench sampling of the Vundu target has now been completed and all samples have been dispatched to the laboratory.
Figure 3: Trenching at Vundu.
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Tombalala identified as significant TREO anomaly
A large zone of highly anomalous TREO‐in‐soil geochemical assays has been identified within the Eastern Pegmatite Field (Figure 4). This area has been a high priority target for KRE as it contains over 40 separate pegmatite occurrences that have historically been worked by artisanal miners for high quality gemstones including topaz, aquamarine and amazonite. The anomaly measures 2 km x 0.8 km, with an assay peak of 888 ppm TREO, and is coincident with a subtle airborne radiometric high.
Figure 4: Tombalala prospect TREO soil geochemical assay results The granite margin location and north‐south orientation of the Tombalala prospect are considered significant due to the strong structural control to pegmatite development in this region. Both geological mapping and aeromagnetic interpretation support a very strong N‐S structural fabric along the eastern margin, potentially controlling rare earth mineralisation. Alluvial xenotime pebbles return spectacular assays KRE was first attracted to the Malilongue project due to the presence of xenotime, a well‐known HREO mineral. Well rounded, dark brown, heavy alluvial pebbles (Figure 5) collected from creek systems draining the southeast margin of the granite complex have returned spectacular assay results. Two samples were submitted for the full analytical suite and the results are summarised in Table 1:
Sample ID. TREO HREO Y2O3 Dy2O3 Nd2O3 Tb4O7 Ta Nb Th U
% % % % % ppm % % % ppm
MP011 40 27 10 2.6 2.6 2,833 0.9 3.1 2.2 3,800
T011023 39 25 10 2.7 2.9 3,144 1.6 3.2 2.0 4,600
Table 1: Assay results of xenotime pebbles collected from creeks in the SE
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Figure 5: Well rounded, alluvial xenotime pebbles from the SE corner of the project area. A sample of this material was subjected to mineralogical examination by scanning electron microscope (Figure 6) and found to comprise major xenotime and minor monazite and zircon. In addition to yttrium, the xenotime shows appreciable dysprosium and erbium. These pebbles are remarkably homogenous in appearance and represent a unique rock‐type that has been colloquially termed “xenotimeite” by respected professionals within the rare earth industry.
Figure 6: SEM image of alluvial pebble, minerals: (a) monazite, (b) ferrocolumbite, (c) microlite, (d) xenotime, (e) zircon.
The search to locate the source of these alluvial pebbles has intensified and includes close spaced ground radiometric surveys and in‐fill soil geochemistry.
ASX ANNOUNCEMENT
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HREO zone identified in central granite pluton
A significant HREO‐in‐soil geochemical anomaly has been identified in the centre of the Malilongue granite pluton (Figure 7). Existing soil grids only just extended into this area and the anomaly was detected on the western end of the previously announced Chigaio grid (ASX announcement 17 July 2012). HREO values reach 666 ppm from a background of less than 100 ppm HREO.
Figure 7: Central HREO‐in‐soil geochemical anomaly. The anomaly has good correlation with elevated airborne radiometric values however the central location was unexpected as all known pegmatites have developed along the granite margins. The central zone represents an entirely new geological environment and follow‐up soil sampling and geological mapping has commenced to evaluate this new target area. Trenching program in progress
A comprehensive program of trenching is now in progress to evaluate all of the high‐priority soil geochemical anomalies defined during the first phase program (Figures 3 & 8). Trenching represents a low‐cost but effective exploration technique in certain environments and regolith conditions at Malilongue are considered ideal for exposing weathered bedrock using an excavator. The resulting channel samples will provide definitive testing of anomalous soil geochemistry, allowing follow‐up drilling to be highly targeted.
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Figure 8: KRE Geotechs sampling trenches at Malilongue. About Kimberley Rare Earths Kimberley Rare Earths Limited listed on the Australian Securities Exchange (ASX:KRE) on 18 May 2011, having raised $18.2m under an oversubscribed Initial Public Offering. KRE is a specialist rare earths company and holds a 25% interest in the Cummins Range Project in Western Australia. KRE has the right to earn up to 80% of the project by funding exploration and development through to delivery of a bankable feasibility study. KRE’s first target is to spend $10m within four years to increase its interest to 55%. The Cummins Range project comprises 1 granted exploration license (80/2232) in the East Kimberley within which is contained a JORC compliant Inferred Resource of 4.90 Mt at 1.74% TREO (total rare earth oxide), 11.2% P2O5 and 145 ppm U3O8 (using a 1% TREO cut off). The Cummins Range project is one of only a few Australian rare earths projects with a Resource reported under the JORC Code. KRE has also entered an agreement to earn up to a 90% interest in a pegmatite‐hosted rare earth project in Mozambique with significant exploration potential, including for xenotime‐hosted yttrium, dysprosium and erbium. Competent Person Statement Information in this ASX release that relates to exploration or exploration results is based on information compiled by Mr. Geoff Collis, who is a member of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which are being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Collis consents to the inclusion of these estimates in the form and context in which they appear.
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Appendix 1 – Malilongue Project location map.
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Glossary
Aeromagnetic Airborne geophysical technique where the intensity of the Earth’s magnetic field is measured in a
systematic way.
Alluvium Loose unconsolidated soil or sediment eroded and deposited by water.
Amazonite A bright green mineral of limited occurrence that can be cut and used as a gemstone.
ASTER Advanced Spaceborne Thermal Emission and Reflection Radiometer – a remote sensory device on board the Terra satellite, launched by NASA in 1999, that provides high‐resolution images of the planet Earth in 15 different electromagnetic spectrum bands ranging from visible to thermal infrared light
Carbonatites Intrusive igneous rocks with a composition of greater than 50 % carbonate minerals.
Diamond Drilling (or Core Drilling) A drilling technique which uses a diamond‐set drill bit to produce a cylindrical core of rock.
Dykes Igneous rocks that intrude the geological sequence at a high angle to the geological layering
Eluvium Loose unconsolidated soil or sediment deposited under gravitational weathering and accumulation processes.
Flotation (or Froth Flotation). A mineral processing technique used to separate chemically different particles (ground and suspended in a water‐based slurry) by selectively floating particles into a surface froth (concentrate), leaving other particles in the slurry (tailing).
Gemstones In the Heads of Agreement signed with GWM covering farm‐in rights to the Malilongue heavy rare earths project in Mozambique, gemstones is defined as topaz, aqua‐marine and amazonite.
HREO Heavy rare earth oxides. The oxides of the 9 heavy rare earth elements Europium (Eu), Gadolinium (Gd), Terbium (Tb), Dysprosium (Dy), Holmium (Ho), Erbium (Er), Thulium (Tm), Ytterbium (Yb), Lutetium (Lu) plus Yttrium (Y).
LREO Light rare earth oxides. The oxides of the 5 light rare earth elements; Lanthanum (La), Cerium (Ce), Praseodymium (Pr), Neodymium (Nd), Samarium (Sm). Note, excludes Promethium (Pm) due to its transient (radioactive) nature.
Pegmatite A very coarse grained igneous intrusive rock composed predominantly of quartz, feldspar and mica. Certain classes of pegmatite commonly host significant strategic metal ore deposits.
Pipe Cylindrical intrusion of younger igneous rocks into an older geological terrain.
ppm Parts per million by weight (10,000 ppm equals 1.0 %).
Pyroxenite Ultramafic igneous rock comprising predominantly minerals of the pyroxene group.
RAB Rotary air blast, a cost‐effective drilling technique used to sample weathered rock.
RC Reverse circulation, a drilling technique that is used to return uncontaminated pulverised rock samples through a central annulus inside the drill pipes. RC samples can be used in industry‐standard Mineral Resource statements.
REO The oxides of the 14 rare earth elements; Lanthanum (La), Cerium (Ce), Praseodymium (Pr), Neodymium (Nd), Samarium (Sm), Europium (Eu), Gadolinium (Gd), Terbium (Tb), Dysprosium (Dy), Holmium (Ho), Erbium (Er), Thulium (Tm), Ytterbium (Yb), Lutetium (Lu) plus Yttrium (Y) but excluding Promethium (Pm).
Sills Igneous rocks that intrude the geological sequence at a low angle or sub‐parallel to the geological layering
Thermal Mapper (TM7) Remote sensory device on board the LANDSAT‐7 satellite, launched by NASA in 1999, that provides imagery of the planet Earth with high image resolution, sharp spectral separation and geometric fidelity, and strong radiometric accuracy and resolution.
TREO The sum total of the 14 rare earth oxides, Lanthanum to Lutetium plus Yttrium as defined above under REO.
WHIMS Wet High Intensity Magnetic Separation. A mineral processing technology used to separate weakly magnetic particles from non‐magnetic particles.
Xenotime A rare earth phosphate mineral comprising predominantly yttrium phosphate (YPO4). Dysprosium, Erbium and Terbium can substitute for Yttrium.