Viridis Mining (ASX: VMM) shares have leapt 128% today on the back of a deal to purchase an ionic clays project. The specific site may or may not be - it’s only been lightly explored as yet - a decent rare earths source. But ionic clays as a whole are indeed the next step in making rare earths more generally available. The background point to understand here. When a mineral or elements rises in price then we don’t just go looking for more deposits of that mineral. We also go looking for new types of deposits where we can get that same element. Exploration becomes not just a matter of more of the same, but what different can produce the same result?
The Viridis deal is: “Viridis has secured a potential world class Ionic Adsorption Clay (IAC) Rare Earth Element (REE) Project in the Poços De Caldas Alkaline Complex, Minas Gerais, Brazil.
Viridis has entered into a binding agreement to acquire 100% of the rights to the REEs comprising the Colossus Rare Earth Project (Colossus Project), consisting of 41 Licenses (including 2 Mining Licenses) covering 5,616 Hectares (56km2) within South America’s largest known Alkaline Complex.”
Well, OK, and everything they say about the deposit so far indicates that it may well turn out to be a useful and economic find. There is uncertainty though. For as a whole - that is, the industry in general - we don’t know all that much about ionic clays at present. Actual mining of them has been limited to China and Burma so far. We’re finding many more deposits of them, true, but we don’t actually know - that is, know know - that all of these others are mineable.
Viridis Mining from Google Finance
More widely there’s a huge amount of excitement about this type of mineralisation. We know of some 10 companies on the ASX alone who have announced in the past 6 months. OD6, Heavy Rare Earths are only two of them. In theory there’s a distinct advantage to ionic clays over the more traditional apatites, monazites and so on: “A standard concentrate from the traditional hard rock methods would be perhaps 50% or more La/Ce. As above, the cost to process that is $20k / tonne or so, the sale price after processing is $500 (not $500k, but $500) per tonne for the La/Ce portion. That's a $19,500 per tonne loss on the La/Ce portion, something that then has to be made up by the revenues of the Pr/Nd/Tb/Dy.
So, concentrate from ionic clays already leaves much of the La/Ce in the gangue, thereby hugely reducing the costs of separation. Or, the other way around, vastly increasing the profitability of separating concentrates from this source.
A side issue here - the Y content can be extracted simply and easily. It is not necessary to send that through the traditional RE separator at that $20k per tonne cost, it's a simple chemical strip from this concentrate.
Ionic clays as a concentrate source get around one of the biggest costs and problems in the whole process. Having to extract, at vast cost, that lanthanum and cerium from the concentrate. Materials that are worth around nothing currently (50 cents a kg is about right these days). Further, this problem is only going to get larger as rare earth production expands. In order to get that more Pr/Nd etc. then ever more La/Ce will have to be produced at that cost.”
That was all originally written about an ionic clay project just over the border in Argentina. But it still applies. The concentrate from an ionic clays operation will be higher in the magnet rare earths and thus save, considerably, on separation (not extraction, but separation) costs.
We fully expect ionic clays to become on of the dominant sources of rare earths in hte medium term future. The economic seem to us too compelling for that not to be the end result. This doesn’t mean that every claimed ionic clay deposit becomes valuable, mining doesn’t work that way. But Viridis is at least entering what we consider to be the sensible end of the rare earths business.
