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Cobra Resources (LON: COBR) shares up 22% - if next door has rare earths, do we too?

This is how the early stages of mineral exploration just do work

Update : 22 Nov 2023, 06:14 PM

Cobra Resources (LON: COBR) shares are up 22% on the announcement of a new tenement in Tasmania. This does not mean that new minerals have been found - this means that Cobra now has the right to search for minerals in a new area. Oh, and, importantly, to exploit those that might be found, subject to the usual further licences and permits. So, a new area to go spend money on - not perhaps that exciting.

On the other hand the area could be a nice rare earths deposit: “Cobra, an exploration company focused on the Wudinna Gold and Rare Earth Project ("Wudinna") in South Australia, is pleased to announce it has been granted a 213 km2 exploration tenement ("EL22/2022") in northern Tasmania. The tenement is complementary to Cobra's ionic rare earth strategy as it is considered highly prospective for Ion Adsorption Clay ("IAC") hosted rare earth mineralisation. Ionic Rare Earth Element ("REE") mineralisation has been identified by ABx Group (ASX: ABX) ("ABx") within alluvial channel sediments that are a weathering product of alkali basalts, the chemistry of which is ideal for ionic REE adsorption. EL22/2022 is situated adjacent to ABx's Deep Leads / Rubble Mound REE project which contains a REE resource of 52 Mt at 817 ppm Total Rare Earth Oxides1, with excellent ionic metallurgy amenable to low-cost recovery in weak acid conditions (pH4), akin to Cobra's Boland discovery at Wudinna.”

One way of putting this is that as the guys next door have some nice rare earths maybe we do too? Or, more accurately, geology often is very similar right next door, so this is a reasonable enough bet.

Cobra Resources share price from Google Finance

However, we would be cautious here. Yes, we know our rare earths around here. A good ionic clay deposit is a great place to get rare earths from - especially dysprosium and terbium. However, we used, as a species, to think they were restricted to South China. More exploration has shown that ionic clays are actually common among subtropical weathered granites. Really, quite common. Like, Heavy Rare Earths, Thor Energy, Alvo Minerals, Ionic Rare Earths, Viridis Mining. That’s not even half of the companies that we alone have covered this year.

That is, ionic clay deposits of rare earths seem not to be rare. Therefore they’re not hugely valuable.

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