Kristie Batten: Barkly aiming to land on global rare earth stage

One of Australia’s top mining journalists, Kristie Batten, writes for Stockhead every week in her regular column, keeping a watchful eye on the movers and shakers of the small cap resources scene.

With a tiny portion of its large landholding explored Barkly Rare Earths (ASX:BAK) believes it can prove up a project of globally relevant scale.

The company listed on the ASX in late January this year, raising $8 million in its initial public offering off the back of its flagship Barkly rare earths project in the Northern Territory.

The project already has a resource of 40 million tonnes at 2100 parts per million total rare earth oxide for 82,000 tonnes of contained TREO, reported above a 430ppm neodymium-praseodymium cut-off grade, with 34% of the resource being mixed rare earth oxide.

However, the resource covers just 1% of the company’s 5000km2 of granted tenure.

“We’ve got a huge landholding in the Northern Territory,” Barkly managing director Craig Wright said.

“It’s got a huge area of mineralisation and is open in all directions away from the resource, and we’re exploring that at the moment.” 

Wright said directors were aligned with shareholders with technical and corporate performance hurdles set at the time of the IPO.

“So, in terms of technical hurdles, we’ve got a 500 million tonne and 700 million tonne resource that we want to build, and so that really sets our sights on something that we think is achievable because this deposit is just so expansive,” he said. 

“Also, in terms of corporate hurdles, we’re looking at various share price hurdles and a $100 million capitalisation to be sustained as well.”

Resource update coming

Barkly has an exploration target of 200Mt to 1 billion tonnes grading 1600-1900ppm TREO and 500-700ppm MREO, covering just 6% of the total project area.

During the current resource drilling program, 56 of 60 holes have returned significant REO intercepts, up to 23km apart.

Mineralisation starts at surface. 

Wright said it wasn’t hard to see how the Barkly resource could expand to billions of tonnes.

“This could potentially be one of the biggest deposits in the world,” he said.

“I want to see another zero in the resource and I think there’s a very good chance that we’ll see that, so expect some good news coming up on the resource.”

The updated resource is expected around early December.

“We hope to deliver that to investors as a nice Christmas present, and then drill results will continue to trickle through into January and February, and so we’re looking for a Q1 second resource update as well,” Wright said.

Met work positive

In rare earths, Wright acknowledged that grade and scale weren’t enough.

“We also need to have good metallurgical recoveries,” he said.

Testwork before Barkly listed returned a 73% extraction rate.

In August, Barkly announced it had achieved 99% MREO extraction to the acid leach solution in a single caustic conversion and hydrochloric acid leach sighter test from a small sample.

“This particular process that we announced would see us free of a Chinese supply chain because the chemicals that we’re using in this process could be made here in Australia simply from sea salt, electricity and water,” Wright said.

Also working in Barkly’s favour on the metallurgical front is the low uranium and thorium content of the deposit.

“We also have beneficiation test results, which demonstrated a 10 times upgrade of the material into a mineral concentrate,” Wright said.

“There’s more test work underway on that as well, with a fresh sample from the current drilling program.” 

Market strong

Wright said the company had already had early conversations with potential customers about producing a carbonate product.

“We’ve got options, so we may consider exporting a mineral concentrate. We could anticipate exporting a carbonate or mixed oxide product,” he said. 

“We could go further downstream and create and separate oxides, but each one of those steps introduces the need for additional capex.”

Wright said the US floor prices for NdPr had provided a step change for rare earths pricing.

“In terms of sustainable pricing, I think we’re in a new era,” he said. 

“I don’t think we’re going to go back to seeing the prices of raw material controlled by the Chinese again in the near future – I think that’s changed.”

Wright believes pricing around the US$110 per kilogram floor price is here to stay.

“What we’re wanting to do here is really to build a project, and we think we can,” he said.

“That is not dependent on high prices, so if we can make this project economic at even the old prices that we used to see in China at US$50-60-70 NdPr, then we know we can make the project work at these higher prices.”

At Stockhead we tell it like it is. While Barkly Rare Earths is a Stockhead advertiser, it did not sponsor this article.

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