Meteoric Resources rises another 13% on Caldeira rare earths project

Meteoric Resources (ASX: MEI) has been quite the darling of the ASX this past 12 months, up 766% over that time. The point at issue is not the company's more usual focus upon gold but instead the switch to rare earths. This might seem like a strange switch, the geology and mining techniques are quite different. On the other hand the minerals are where God's engineer put them an if you're in the area why not? That is, it's possible to focus upon geology, but also upon geography - why not look at interesting minerals near where you are instead of hunt everywhere for specific minerals? 

The precise and particular here at Meteoric is ionic clays. This is a bit of geology which has only recently been worked out. It used to be thought that these were specific to Southern China and environs - across the border into Burma and so on. They're also a significant part of China's stranglehold upon the global rare earths business, being a major source of the heavy rare earths.  

Meteoric Resources share price from Market Index

Those ionic clays were thought to be only in that area, South China. But it has since been worked out that they're a common form of weathered granite in subtropical climes. A deposit in Argentina is being worked upon for example. There are two major advantages as a source of rare earths.

Firstly, it's a clay not a rock. Mining doesn't require crushing and grinding of hard rock to liberation point therefore. In fact, Chinese experience is that it can be mined with in-situ leaching if desired. 

Secondly, the mix of rare earths contained. The major cost in rare earths is separating the individual lanthanides from each other. At current pricing the two most common, cerium and lanthanum, lose money for the operator. It's the magnet materials that make it. So, deposits light in Ce and La, high in Nd, Pd and the heavies will be much more profitable. Ionic clays have exactly this profile over more traditional xenotime or bastnaesite. Assuming that Meteoric's description of the geology is correct then the Caldeira Project is a very exciting potential source of rare earths. 

The big future question is really going to be how many more such ionic clay deposits are found? For it's easy enough to imagine rare earths going into oversupply to be honest.