Quest Rare Minerals (QRM-T, QRM-X) has pushed back the release date of a prefeasibility study for its Strange Lake rare earth deposit, on the Quebec/Labrador border, to the second half of 2012.
Originally due out in the first quarter of the year, the company has decided to change some of the parameters of the study. Quest is now planning to locate all its project facilities within Quebec, allowing for a more streamlined permitting process. Instead of using a slurry pipeline to send ore crushed onsite to a mill located on the Labrador coast, Quest’s new plan calls for the mill to be located onsite. The concentrate is now expected to be trucked on the same 160-km access road the junior planned to build to bring in materials and supplies. The concentrate will be delivered to a coastal port for shipping.
The project is located 220 km northeast of Schefferville, Que., and 125 km west of the Voisey Bay mine.
While it says that it has seen positive results from metallurgical test work so far, the company is delaying publishing its metallurgical results by two to three months in order to choose the optimal process flow sheet. It’s also attempting to speed up the completion a metallurgical flow sheet for B-zone mineralization by bringing a second lab on board to help with the process.
At a cutoff grade of 0.579% total rare earth oxides (TREO) the deposit’s B-Zone contains an indicated resource of 140.3 million tonnes grading 0.933% TREO, plus 89.6 million tonnes of inferred resources at 0.882% TREO. A high proportion -- about 40% -- of the resource is made up of the more valuable heavy rare earths.
A preliminary economic assessment published in late 2010 estimated capital costs for the project at $563 million. At a discount rate of 12%, the project’s pretax internal rate of return was pegged at 36.4%, and its net present value at $1.4 billion. The PEA studied a mining scenario of 4,000 tonnes per day or 22,600 tonnes TREO concentrate per year, plus niobium and zirconium concentrates, over a 25-year mine life.
Quest has $42.5 million in working capital. The junior, which has 61.7 million shares outstanding, closed the day down 2% at $2.90 and has traded in a 52-week window of $1.75-8.88.
©
2012Mining Markets. All Rights Reserved.