Viridis Mining and Minerals (ASX: VMM) shares are up 70% on the back of drilling results. Even these are preliminary but so far they’re looking good. Which is, of course, why the 70% leap in VMM shares.
The background is that back in August they tool over a potential rare earths project at Viridis Mining: “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?”
Now we’re getting back the first drilling results: “First set of assays for auger and diamond drilling received, confirming a world class Ionic Adsorption Clay (“IAC”) discovery. Initial diamond drilling revealed an IAC body ranging from 10 to 20 metres thick with a
remarkable weighted average grade of 2,938 ppm Total Rare Earth Oxide (“TREO”) at the Fazenda prospect and an even more impressive IAC body was discovered, 15 to 45 metres thick, with a remarkable weighted average grade of 3,460 ppm at Cupim South Prospect. These TREOA grades position Colossus to potentially become the highest-grade deposit globally for Ionic Clay Rare Earths.”
Viridis Mining and Minerals share price from Google Finance
Now those are good results. There’re still a couple of technical stages to go - mere presence of rare earths isn’t enough, they’ve got to be there with the right chemistry so that they’re easy to extract. We’d not expect this to be a problem because we don’t think ionic clays are rare. As we’ve said before: “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.” Mineral deposits that are not rare tend not to have a scarcity value. Things that are easy to find tend not to be expensive that is.
This is an interesting find for Viridis, it is value added. But in the long term we’re deeply unsure whether there’s going to be any scarcity value to a rare earth deposit at all. There seem to be just so many of them. It’s going to be the skill at exploitation that matters, not the deposit itself to our minds.
