For those ASX-listed mineral explorers who won’t pursue opportunities in Africa because of their fear of stifling bureaucracies, they should take heart in the recent experience of a West Australian junior looking for green metals in Uganda.
During the first half of January the Perth-based Ionic Rare Earths Ltd received some welcome news when it was told its application for Retention Licence (RL) 00007 ‒ an integral part of its Ugandan Makuutu rare earths project ‒ was lodged and approved within just two weeks by the country’s Directorate of Geological Survey and Mines (DGSM).
The speed at which the paperwork was completed, the junior told the market, was indicative of the support the proposed mining and processing operation had from the country’s government.
Located some 80 kilometres east of the nation’s capital of Kampala, Makuutu is one of the world’s largest ionic adsorption clay (IAC)-hosted rare earth element (REE) deposits.
The project – which has been likened to the major clay-hosted IAC REE deposits in southern China that are responsible for the majority of global supply of low cost REE and, in particular, the high value heavy REE oxides (with over 95% originating from IAC) ‒ comprises six licences covering about 300 square kilometres, with the defined mineralisation stretching 37km long and endowed with near-surface mineralised ore and significant exploration upside.
It currently enjoys an indicated resource of 404 million tonnes at 670 parts per million total rare earths oxides (TREO) and an inferred one of 127Mt at 540ppm TREO, for a total of 532Mt at 640ppm TREO, with an oxide content of 25 per cent heavy rare earths and 35 per cent critical ones.
Meanwhile, RL 0007 has an Inferred Resource of 39Mt at 470ppm TREO with, the company maintains, mineralised upside. Not surprisingly, Ionic has more drilling planned for the coming year.
RL 00007 sits immediately west of the RL 1693, which is currently under Mining Licence Application (MLA) and will provide the basis for additional capacity and organic growth at Makuutu once initial mining and processing activities start.
This renewed RL is also immediately south of a prospective exploration target located within EL00257, where applications have been submitted for drilling to start this year in order to further define the scale of potential ionic clay mineralisation to the west of the MLA area.
According to Ionic, once these new exploration approvals have been granted, it intends to initiate the phase five drill program at Makuutu to move it’s resource into the Indicated camp.
As it stands Iconic has a 51 per cent holding in the project with its owner, the privately-owned Renzori Metals Ltd, controlling the rest. Under a deal brokered between the two companies, and if all goes to plan, the Perth-based junior will eventually become a 60 per cent owner and have first right over the remaining 40 per cent.
As part of an integrated strategy to create downstream supply chain value, IXR is also evaluating the development of its own magnet and heavy rare earth refinery (or hub) to separate the magnet from the heavy rare earths that are dominant in the Makuutu basket. Aside from REEs, the project is also expected to yield a scandium by-product.
In this regard a refinery scoping study is currently on target for completion by the first quarter of 2023.
As part of this, Ionic anticipates establishing a proof of concept demonstration plant program to de-risk Makuutu ahead of an expected final investment decision in the second half of 2023.
This will involve trial pit mining, grade control and reconciliation of insitu grade to recovered product; material handling and equipment selection verification; a further scaling up of metallurgical test work to determine heap desorption conditions from 3m stack heights and 6m-plus columns, cribs, heap and desorption modules; residue characterisation, and; production of mixed rare earth carbonate for downstream verification. Test work for both the refinery and pilot feed stream is also scheduled.
No doubt the promptness of the approval to extend RL 00007 by Uganda’s DGSM has given IXR the confidence that it will be able to achieve these goals within the timeframe it has put in place.
Last August the company, through Rwenzori, hosted two large public hearings at Makuutu with over 3,800 registered attendees demonstrating strong state and local stakeholder support.
Further to this, several visits to the site by Ugandan ministers of parliament and other dignitary and government departments consolidated support for the development of the project.
Advice from these representatives suggested the ML remained on track for delivery during the current quarter.
Work programs now continue in Australia and overseas evaluating the best methods for developing Makuutu across the six tenements ‒ from mining to optimised processing via extensive metallurgical programs and engineering studies. All these programs focus on de-risking the development.
“The rapid approval of the renewal of RL 00007, which occurred within two weeks of finalising the submission documentation, is another positive reflection of the strong support IXR and the project has within Uganda,” Ionic managing director Tim Harrison told the market.
“As the company, via Renzori, finalises the MLA at Makuutu for RL 1693, we remain confident that Makuutu will continue to grow and support a much larger project.”
