Projects and their principal commodity targets and development stage are summarized in in the following table.
1. Lofdal Heavy Rare Earth Project
Lofdal was already held by the Company prior to this transaction and in terms of project maturity, Lofdal is the most advanced with a 43-101 resource in place and completed Preliminary Economic Assessment ("PEA"). In 2016 the Company completed an Environmental Impact Assessment and filed for an Environmental Clearance Certificate from the Ministry of Environment and Tourism, and concurrently filed for a Mining Licence with the Ministry of Mines and Energy. The Environmental Clearance Certificate was received in December 2017 and the Mining Licence application is under review by the Ministry of Mines and Energy.
Mineral Resources at Lofdal
In September 2012, the Company released a National Instrument 43-101 compliant initial mineral resource estimate for Area 4 of the Lofdal Rare Earths Project as set out in the technical report "NI 43-101 Technical Report and Mineral Resource Estimate for Area 4 of the Lofdal Rare Earth Element (REE) Project, Khorixas District, Republic of Namibia" dated October 29, 2012 (the "Lofdal Initial Resource Report") independently prepared for the Company by The MSA Group (Pty) Ltd. of South Africa ("MSA"), a full copy of which is available on SEDAR at www.sedar.com. The mineral resource statement was updated in the PEA. The mineral resource exhibits exceptional levels of heavy rare earth enrichment of between 75% and 93% HREE depending on cut-off grade with corresponding TREO ranging from 0.27- 1.26% TREO. The resource drilling program has provided a mineral resource estimate extending from surface to a vertical depth of approximately 150 meters. Ongoing exploration drilling, however, has intersected the deposit to 200 meters further down-dip of the initial 43-101 resource. The geological database supporting the initial mineral resource estimate is detailed and is of a high quality, comprising over 10,025 meters of diamond drilling in 93 holes and 987 meters of trenching.
MSA identified 0.1% TREO as the appropriate cut-off grade for the mineral resource which provides the following mineral resource statement:
Although mineral resource grades (% TREO) are relatively low, the high levels of heavy rare earth enrichment can provide significant tonnages of contained heavy REOs. The main elements of interest from the Area 4 mineral resource are europium, terbium, dysprosium and yttrium (with yttrium and dysprosium being the most abundant). Based on the REO distributions, these four elements are the most valuable in the deposit.
Lofdal Preliminary Economic Assessment
In October 2014, the Company completed a National Instrument 43-101 ("NI 43-101") technical report titled "Preliminary Economic Assessment on the Lofdal Rare Earths Project Namibia" (the "PEA"). The effective date of the PEA is October 1, 2014. The MDM Group is the principal author of the PEA under the supervision of David S. Dodd, B. Sc (Hon) FSAIMM. Other contributing authors were Peter Roy Siegfried, MAusIMM (CP Geology) and Michael R. Hall, B.Sc (Hons), MBA, MAusIMM, Pr.Sci.Nat, MGSSA both of the MSA Group and Patrick Hannon, M.A.SC., P. Eng. and William Douglas Roy, M.A.Sc., P.Eng. both of MineTech International Limited. The PEA has been filed on SEDAR (www.sedar.com).
The PEA concludes that the Project would have the potential to produce an average of 1,500 tonnes per annum of separated rare earth oxides ("REO") which would generate after tax cumulative cash flow of US$259M with a net present value10% ("NPV") of US$148M and an internal rate of return ("IRR") of 42% based on projected REO prices as provided in the PEA. The PEA indicates that there is considerable potential to expand the current mineral resource and recommends that additional drilling be carried out to provide for an extended mine life in conjunction with a six-month Prefeasibility Study ("PFS") program.
The PEA should not be considered to be a pre-feasibility or feasibility study, as the economics and technical viability of the Project has not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Furthermore, there is no certainty that the PEA will be realized.
2. Kunene Cobalt-Copper Project
Namibia is host to a new discovery of cobalt mineralization following the recent exploration success led by Dr. Rainer Ellmies (General Manager, Gecko Exploration and Technical Advisor to NCM) to explore for "copper belt" style deposits in the Kunene Region of northern Namibia. The discovery is situated immediately east of NCM's project area on ground held by Celsius Resources (ASX :CLA) who are carrying out an aggressive 15,000 m drill program to deliver a maiden JORC resource estimate in early 2018. The mineralization is uniformly 5 to 10 meters thick within a dolomitic shale horizon termed the dolomitic ore formation ("DOF"), and averages around 0.5% copper and 1000-2000 ppm cobalt.
The Kunene Cobalt-Copper Project comprises a very large area of favourable stratigraphy contiguous with the DOF discovery adjacent to the ground held by Celsius Resources. Secondary copper mineralization over a wide area points to preliminary evidence of a regional-scale hydrothermal system. Exploration targets on EPLs held in the Kunene project comprise direct extensions of the DOF style mineralization to the west, sediment-hosted cobalt and copper, orogenic copper, and stratabound Zn-Pb mineralization. Most of the occurrences are likely spatially related to what Dr. Ellmies' geological team has interpreted as a large hydrothermal center termed the Steilrand hydrothermal system. There is considerable scope for further discoveries both along strike of the Celsius discovery and in equivalent stratigraphy elsewhere on the property. Initial investigations will trace the western extension of the DOF which may continue for over 10 km in the project area, and will follow up on numerous copper-cobalt targets drilled in the past but never analysed for cobalt.
3. Black Range Graphite Project
The Black Range flake graphite prospect was discovered in the late 1980's and was explored by Rossing Uranium Ltd. between 1988 and 1992. Rossing interpreted the graphite horizon in a fold structure with a total strike length of about 8 km. Based on 3,821 m of percussion drilling and 3,931 m of diamond drilling from a 1 km segment of the horizon, employing a cut-off grade of 2% graphitic carbon and using the polygonal section method, an historical estimate of 12.46 MT grading 4.63% graphitic carbon was utilized by Rossing to assess the project (reference "The Black Range Graphite Deposit, Feasibility Study Final Report" dated August 1992). This historical estimate does not cite reference to CIMM Definition Standards on Mineral Resources and Mineral Reserves. Additional drilling and sampling will be required to validate the historic database. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and this historical estimate is not being treated as a current mineral resource or mineral reserve. Preliminary mining plans were drawn up and preliminary metallurgical work was carried out by Mintek of South Africa but the project was terminated before the flowsheet was fully optimized when the decision was made to focus instead on the graphite deposit at Okanjande. Okanjande was brought into production in 2017 by Gecko Namibia in a joint venture with Imerys.
There exists considerable historic data, including metallurgical test work which can greatly assist in fast tracking this project towards economic evaluation. The focus will initially be on verifying and optimizing the historic metallurgical data to develop a viable flowsheet. Once this is achieved, the project could be taken rapidly to a PEA stage with a concurrent resource drill program to develop a NI 43-101 resource estimate. The project interest is held under an option agreement to acquire a 60% interest which interest may, subject to the terms of the option agreement, be increased to 80%.
4. Warmbad Lithium Project
The Warmbad Lithium Project covers 605 km2 is located in southern Namibia near the South African border in an area of historic small-scale pegmatite mining known as the Tantalite Valley. The Tantalite Valley pegmatites have been mined since about 1946 for beryl, columbite-tantalite, lithium and bismuth minerals. Mining has been re-activated by Kennedy Ventures Plc who control African Tantatite (Pty) Ltd. and are producing concentrates of >40% Ta2O5 being sold into global markets. Initial production of 20M tpa concentrate is ramping up to 120M tpa (Kennedy Ventures Corporate Presentation "Meeting Market Demand and Resource Expansion" dated July 27, 2017). An initial lithium resource estimate is being prepared by MSA Group for early 2018 following the sampling of lepidolite bearing pegmatites grading >1.6% Li2O. The mineralization hosted on the Kennedy Ventures Pic property is not necessarily indicative of the mineralization hosted on the Warmbad Lithium Project.
The Warmbad EPL hosts three pegmatite occurrences of undetermined extent from government maps. There are no records of any systematic exploration over the EPL. The area has recently been mapped by the Geological Survey of Namibia and the Council of Geosciences (South Africa) which has provided updated geological information. A key result of the mapping campaign is the delineation of previously unknown extensive pegmatite swarms of up to 13 km strike length. None of these pegmatites have ever been sampled and assayed. This new data will be utilized to undertake systematic sampling of the pegmatites.
5. Epembe Tantalum-Niobium Project
Epembe is an advanced stage exploration project with a well-defined, very large multiphase carbonatite dyke that has been mapped and sampled at surface over a strike length of 10 kilometers of which at least 7 km of strike length is mineralised. Work completed to date includes detailed mapping and over 11,000 meters of drilling with preliminary mineralogical and metallurgical studies. The carbonatite contains variable concentrations of pyrochlore which is unusually enriched in tantalum. The other commodities of interest are niobium (hosted in pyrochlore) and apatite. Drilling covered only 15% of the pyrochlore hosting carbonatite. Grades of the drilled portion of the carbonatite average on the order of 150 ppm Ta2O5, 1,300 ppm Nb2O5 and 2.4% P2O5. Initial sorting tests (XRT) indicate the potential for significant physical upgrading. Planned work will focus on improving grade by optimizing XRT sorting and investigating amenability to XRF sorting. Further work will be undertaken to explore for extensions of mineralized zones along strike and at depth.
6. Grootfontein Nickel-PGE Project
Grootfontein is an early stage conceptual target based on geophysical and historical evidence for a large buried mafic-ultramafic intrusive complex. It is a poorly explored geological complex due to the extensive coverage with Kalahari sands and calcrete.
Based on historic drill holes and airborne magnetic survey interpretations, Grootfontein constitutes a huge mafic complex covering 360 km2 with the potential to host magmatic nickel, copper, vanadium, platinum group elements and chromite mineralisation as cumulates or late magmatic disseminations and stockworks. Previous work by Ongopolo Mining proved that the main intrusive phases are depleted in nickel and copper. The metals were likely fractionated as sulphides during the intrusive phase, gravitationally accumulated in the magma and intruded in the adjacent, pre-existing rocks. Following geological models for classic mafic hosted copper-nickel deposits such as Norilsk and Voisey's Bay, sulphidization by scavenging of sulphur from country rocks and tectono-magmatic concentration of the sulphide-rich melts are the key for the formation of this type of magmatic copper nickel deposits. Only two shallow drill fences (total of 1,386 m) were drilled by Anglo American in 1988 leaving 55 km of strike length untested.
There is also potential for Mississippi Valley-type zinc-lead-vanadium mineralisation as demonstrated by the Berg Aukas deposit where dolomite-hosted deposits bordering the mafic complex, which according to historical records, produced 1.6 MT of ore grading 16.77% Zn, 4.04% Pb and 0.93% V2O5 during the period 1967-1975. The Grootfontein project area hosts favourable stratigraphy for this deposit type immediately west of Berg Aukas.
7. Otjiwarongo Carbonatite Project
Otjiwarongo is another early stage conceptual target based on remote sensing data in proximity to known alkaline intrusive complexes, most notably the Okorusu complex which hosts the Okorusu fluorspar deposits. The area of interest is completely hidden by cover. The circular anomaly measures one kilometer in diameter and can be easily tested by drilling to determine if in fact a carbonatite body is the source and what styles of mineralization might be associated with it (fluorspar, rare earths, tantalum, niobium etc.).
8. Erongo Gold Project
The Erongo gold project covers an area of over 600 km2 within the Navachab-Ondundu gold trend. There are numerous mineral occurrences within the project area including at least two gold occurrences. The area has been prospected but not systematically explored. Potential targets include skarn and greisen gold-(copper-bismuth) and tin-tungsten mineralization; pegmatites formed during the late Damaran orogeny hosting lithium minerals and semi-precious stones and structurally controlled gold mineralisation. Historical figures indicate small scale mining for all of those deposit types on the property.