Altona Rare Earths (ANR ) shares jumped 4.6% this morning after the company announced an estimated exploration target for its Monte Muambe REE project of up to 56.6m tonnes at 1.65% Total Rare Earth Oxide (TREO).
This milestone estimate represents Altona's first independent review of drilling results that measure both estimated size and average grade of the rare earth elements (REE) resource at Monte Muambe, Mozambique. A JORC Mineral Resource Estimate is on track to be published in Q1 2023.
The estimated total tonnage is up to 56.6m tonnes at 1.65% TREO, including 11.5m tonnes at 2.41% TREO, corresponding to a well-defined high-grade zone.
For context, anything above 1% TREO is considered economical, and 1.65% is well above average. The 2.41% TREO for 11.5m of the resource is exceptional. Altona's initial target for the size of the resource was around 25m tonnes, thus the upgraded size estimate was another pleasant surprise for investors.
These results come after a 5-month drilling programme of Monte Muambe's Targets 1 and 4, that concluded in July. Following publication of the maiden JORC mineral resource estimate in Q1 2023, the project's preliminary economic assessment is expected by Q2 2023.
"By completing this key milestone, it has become apparent that Monte Muambe is shaping up to be a significant rare earths project, with the estimated potential size and grade surpassing the results of some of our much larger LSE and ASX listed peers." said CEO Christian Taylor-Wilkinson.
He added: "There is a growing worldwide shortage of critical rare earth metals, particularly for the electric vehicle market. These results have given the board the confidence to fully commit Altona to completing the necessary phases of exploration to take the project to feasibility as soon as possible."
Since 12 June 2022, Altona has drilled 9 additional holes (a total of 868m) on Targets 1 and 9, including two 150m long holes. REE mineralisation is now documented from the surface to a 120m below surface. Drilling revealed some high-yield intercepts at Target 1, including 36m @ 3.182% TREO from 17m (Hole MM074), 30m @ 3.031% TREO from surface (Hole MM053), and 57m @ 2.170% TREO from 29m (Hole MM079).
View from Vox:
Christian Taylor-Wilkinson, CEO of Altona Rare Earths, spoke with Justin Waite this morning on the Vox Markets podcast regarding today's results. Click here for that conversation.
Rare Earth Elements (REEs) are key to the development of green technology, both in transportation and energy generation. A common use is permanent magnets used in EVs and wind turbines. Permanent magnet production has doubled between 2006 and 2021 to 125,000 tonnes currently, and expected to reach 315,000 tonnes by 2030. The REE market is expected to grow from $13.2 billion in 2019 to $19.8 billion in 2026.
With many developed countries actively phasing out internal combustion engines - the UK having set 2030 as a deadline for sales of petrol vehicles - prices of critical REEs such as Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy) and Terbium (Tb) have risen significantly in recent years and the trend is expected to continue. As demand has risen, many governments have begun stockpiling REEs, notably China and the US, further driving prices up.
Altona's estimated REE resource at Monte Muambe matches that of companies with over 10x its market cap, so there is much potential for upside. Altona is also set to list on the LSE under the ticker REE, which should spur further investment. The listing should provide Altona with enough liquidity to develop its portfolio, facilitate future fundraising efforts, and give the company more negotiating power in acquiring further projects in Africa.
Altona is investigating additional opportunities in Africa, specifically in Angola, Tanzania, Uganda, and Burundi. The company hopes to scale up as a producer and exporter of REEs. Its strategy is to acquire and develop overlooked REE sites, many of which were initially studied for other minerals, with REE discoveries neglected as demand was much less at the time of discovery.
Overall, today's news confirms that Monte Muambe is set to become a major, high-value project. Investors welcomed the news, sending Altona shares up 4.6% in early trading.
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