Kenya: Canadian Firm Finds More Rare Earth Mineral Deposits in Kwale

Kenya could get a better estimate of the total deposits of rare earth minerals in Kwale County by June this year, a Canadian firm involved in their exploration at the Coast has indicated.

Pacific Wildcat Resources (PAW) said in a statement to its shareholders on Friday that it had discovered more deposits of Niobium and other rare earth oxides at its Mrima Hills site than earlier reported, and it is doing further tests to establish the quality of the deposits.

"This drilling has the objective of both extending the current inferred niobium resource and to provide a maiden rare earth resource in the third quarter of 2012," said Darren Townsend, CEO of the company.

Don Willoughby, the corporate communications manager at PAW, told Business Daily in an interview that this indicates the core drilling programme just finished, and an effort has started to provide additional data to allow the recalculation of the niobium resource estimate at Mrima Hill beyond the current estimate of 105 million tonnes at 0.65 per cent.

He said further tests will "provide enough data to allow the calculation of an initial resource estimate in terms of tonnes and grade for total rare earth oxides (TREO) by the end of quarter two, 2012."

PAW, through Cortec Mining Kenya in which it has a stake, is still carrying out exploration on the pricey minerals for which it received a three-year extension to its prospecting licence in December.

Mr Townsend said further drilling of the mineral had unearthered a bigger resource than had been earlier announced by David Anderson, the chief executive at Cortec Mining, who had estimated the reserve to be worth about Sh250 billion ($3 billion).

"As can be seen from the cross sections we have now shown the high grade niobium mineralisation extends at depths substantially deeper than the initial inferred niobium resource which is limited to a depth of 30 metres," he said.

High grade

Analysis of the drilling results from the latest holes showed that the high grade niobium extended to depths substantially longer than it was initially indicated.

The rare earth and niobium minerals extend beyond 100 metres below the surface and not the 30 metres that had been announced earlier.

Already Cortec Mining has applied for a commercial mining licence to exploit the mineral coming after the local community backed down on its initial objection of the mineral exploitation, citing environmental degradation of their sacred sites.

PAW announced at the end of last year that is was nearing acquisition of a 70 per cent stake in Cortec Mining Kenya, the registered holder of Special Prospecting Licence (SPL) for over 1,800 square-kilometre area.

"We are very pleased that the existing SPL has been extended for a period of three years and that the Special Mining Lease application has been submitted. We look forward to now moving towards closing the acquisition of the 70 per cent," Mr Townsend told shareholders in December.

Acting Commissioner for Mines Moses Masibo had earlier confirmed the extension of the SPL which now expires in December 2014 but could not give an indication on when the mining lease would be granted to Cortec Mining.

Niobium is mixed with steel to create a strong alloy used in the manufacture of pipes for water and sewerage systems and components used in vehicles.Alloys from niobium and steel are also used in the creation of welding rods and stainless steel products used in homes.

Niobium has also become popular in the production of optical lenses. Rare earths are crucial in making high-tech electronic products such as specialized miniature nuclear batteries, laser repeaters, super conductors and miniature magnets.

The two firms have are giving the local community Sh1 million for development projects every month after a truce was reached to ease the strong opposition against the project that local leaders had earlier mounted.

PAW announced plans to raise up to Sh497 million to fund its exploration activities in Kenya and Mozambique.