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Geoff Eupene, Crossland Uranium - Charley Creek Alluvial Ree Project


Geoff Eupene, Crossland Uranium delivered the presentation at the 2013 Mining the Territory Conference. …

Geoff Eupene, Crossland Uranium delivered the presentation at the 2013 Mining the Territory Conference.

Mining the Territory Conference is part of the Northern Territory Resources Week. It provides the perfect platform for stakeholders in the NT mining industry to hear the latest information on this booming region.

For more information about the event, please visit:

Published in Business , Technology
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  • 1. 1 CHARLEY CREEK ALLUVIAL REE PROJECT Mining the Territory, September 2013 Developing one of the world’s largest, lowest capital cost, rare earths projects
  • 2. Mining the Territory, September 2013 2 This presentation should not be considered as investment advice. Any party to whom this information is made available must make their own investment decisions. Any forward-looking statements included in this document involve subjective judgment, and are subject to uncertainties, risks and contingencies, which may be beyond the control or knowledge of Crossland. Future events may vary materially from the forward-looking statements and the assumptions on which the forward-looking statements are based. Attendees at this presentation are cautioned not to place undue reliance on such forward-looking statements. Crossland makes no representation or warranty as to the accuracy, reliability or completeness of information in this document and does not take responsibility for updating any information or correcting any error or omission which may become apparent after this document has been issued. JORC Statement. The information in this presentation that relates to Exploration Targets, Exploration Results, or Mineral Resources is based on information compiled by Geoffrey S Eupene FAusIMM CP, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. He is a director of the Company and a full time employee of Eupene Exploration Enterprises Pty Ltd, which is engaged by the Company. He has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration, and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code). Geoffrey S Eupene has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears. ASX Listing Rules Statement re Production Targets. This presentation is based upon a production target and forecast financial information derived therefrom that was initially reported in CUX ASX Release of 15th April 2013: “Charley Creek Rare Earth Project Scoping Study Results”. The assumptions underpinning the production targets therein continue to apply and have not materially changed. Some of the production target is based upon an exploration target. The potential quantity and grade of a exploration target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised.
  • 3. 3 Working towards production in 2016  Charley Creek REE Project situated in NT  Located 1hr from Alice Springs  Drilling has tested 1% of exploration potential  Very low risk simple mineral sands process  High proportion of Heavy and Critical Rare Earths  Excellent infrastructure  Favourable regulatory regime Mining the Territory, September 2013
  • 4. 4  The Cattle Creek/ Western Dam alluvial fan (350km2) shown by rough outline  The REE bearing minerals are separate mineral grains of monazite & xenotime contained in alluvium  The alluvium is readily mined and upgraded using conventional mineral sands technology.  Average thickness of resource is 15m, commencing from surface (no overburden) with some of the alluvial fans having thicknesses up to 80m  Vast alluvial flats are inexpensive & easy to rehabilitate Mining the Territory, September 2013
  • 5. 5 20+ Year Mine Life on Existing Resource RESOURCE Mass (Mt) Weighted Average TREO (ppm) Contained TREO (t) Contained Xenotime (t) Contained Monazite (t) Contained Zircon (t) Cattle Creek Indicated Resource 250 280 69,900 17,600 97,200 124,650 Western Dam Indicated Resource 137 323 44,150 9,675 63,700 70,930 TOTAL INDICATED RESOURCES 387 295 114,050 27,275 160,900 195,580 Cattle Creek Inferred Resource 353 291 102,750 26,450 141,075 183,750 Western Dam Inferred Resource 65 282 18,350 4,240 26,160 36,230 TOTAL INFERRED RESOURCE 418 289 121,100 30,690 167,235 219,980 Mining the Territory, September 2013
  • 6. 6 Multiple REE Alluvial Fans - Decades of REO Supply? Mining the Territory, September 2013
  • 7. 7 Experienced Independent Advisor Team  Mineral Sands process experts  Specialized in testwork and flowsheet development for mineral sands project  Resource development consultants  Specialist in alluvial processing  Expertise in scoping and feasibility studies through to basic and detailed design, construction and commissioning  GHD is one of the world’s leading engineering, architecture and environmental consulting companies  6500 people across five continents Mining the Territory, September 2013
  • 8. 8 PROJECT FINANCIALS Net Present Value (NPV10)* A$302M Internal Rate of Return 39.4% CAPITAL EXPENDITURE Total Capex (including contingency) A$156M Payback period 2.5 years REVENUE Annual revenue (75% off-take terms) A$154M pa “Basket Price” of REO product (Mar 2013) US$57.38/kg Operating Unit Cash Cost A$7.12/t ROM PRODUCTION Concentrate annual production (40% REO) 10kt/yr REO Production (as mixed carbonate) 3,645t/yr Overall metallurgical recovery 60.8% Mining the Territory, September 2013 *An Exploration Target of 60 to 100Mt at grades of 500 to 1,000ppm TREO, that would contain 30,000t to 100,000t TREO is the priority of the upcoming Resource drill out program. This target is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource, and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
  • 9. 9 Capital Item AUD $ Mining Field Units $9,560,189 Wet Concentrator Plant $55,257,469 Dry Concentrator Plant $12,728,878 REO Refinery $15,799,437 Infrastructure $26,938,914 TOTAL DIRECTS $120,284,887 Indirects $5,672,830 EPCM $17,565,280 Contingency $12,734,166 TOTAL CAPEX $156,257,164  Charley Creek is one of the lowest capital cost undeveloped REE projects globally .  On an annualised basis, its capital cost is equivalent to US$43/kg REO pa.  Capital cost is inclusive of all infrastructure.  Includes contingency allowance ($12.7M) CUX Mining the Territory, September 2013
  • 10. 10  Charley Creek is a high tonnage ‘mineral sands’ style operation.  Total C1 cash costs is $7.12/t ROM or $21.16/kg REO production.  Several areas to reduce costs have been identified:  Higher grade starter pit areas to be drilled in next phase.  Several process improvements expected to increase overall metallurgical recovery.  Potential refinery reagents savings through process improvements. SCOPING STUDY OPERATING COST ESTIMATE PRESENT OPTIMISATION PHASE 8.68 5.03 0.92 5.87 0.67 21.16 15.00 Mining the Territory, September 2013 TARGETING 30% SAVING
  • 11. 11  March 2013 China FOB spot price was assumed for Scoping Study  Charley Creek basket price was US$57.38/kg REO.  TREO composition contains 18.3% HREOs.  US Department of Energy has assessed Nd, Eu, Tb, Dy & Y to be in critical shortage  These five elements are commonly referred to as Critical Rare Earth Elements (CREE)  Charley Creek contains 30% CREEs by weight and they represent approximately 80% of our basket price. Mining the Territory, September 2013 Source: Metal Pages, CUX Critical Critical Critical Critical Critical Pricing Date
  • 12. 12  Unusual alluvial deposits having a broad spectrum of heavy and critical rare earths from monazite and xenotime  Charley Creek has one of the highest HREE &CREE distributions  Not dependent on LREE metal prices. CUX Source: TMR, Metal Pages Mining the Territory, September 2013
  • 13. 13  Low risk mining and processing  Simple gravity spiral plant.  Tailings returned by pumping to pit void.  Wet & Dry Plant flowsheets confirmed via pilot test work.  Final heavy mineral concentrate from Dry Plant contains 40% TREO.  Refinery low capital due to high REO grade.  Feed rate only 1.2 tonne / hr  Excellent extraction using sulphuric acid roast and water leach (>95% REE extraction)  High purity mixed rare earth carbonate produced (97-99% purity RE Carbonate)  Expecting radionuclide free mixed carbonate product Mining the Territory, September 2013
  • 14.  Low cost mining – simple excavation − Does not require costly drilling, blasting and crushing associated with hard rock deposits  Fully liberated monazite and xenotime mineral grains in alluvial sand  Gravity spirals demonstrated good heavy mineral (HM) recoveries to concentrates with 8-12% TREO  Electrostatic and magnetic separation can easily separate rare earth minerals from ilmenite, rutile, zircon and other heavy minerals  Final mineral concentrate contains >40% TREO 14 Xenotime Mining the Territory, September 2013 Monazite Final Mineral Concentrate (40% TREO)
  • 15. 15  Mine site located ~100km from Alice Springs.  Fly-in/Fly-out operation with 150 personnel camp and mess facility.  Targeting at least 30% local aboriginal workforce plus contractors  Amadeus Basin Gas Pipeline to provide gas to BOO power station.  Three large borefields targets have been identified and will be drilled in next phase.  REO Refinery may be located 30km from Alice Springs (DIDO).  All reagents to be transported to site (no acid plant: quantities required are too small). Mining the Territory, September 2013 ALICE SPRINGS 25km
  • 16. 16  Secure funding for DFS (commenced, with securing of investment of HK Rare Earths Sdn Bhd)  Drill high grade zones  Continue optimisation test work to achieve lower operating costs  Undertake pilot beneficiation program  Undertake Refinery pilot program  Complete environmental impact study (EIS)  Undertake detailed engineering  Secure refinery offtake agreement and financing options Mining the Territory, September 2013
  • 17. 17  Crossland is currently exploring links with additional potential strategic investors to partner in the development of Charley Creek.  Additional strategic partners might be: i. Rare earth traders seeking to secure long-term off-take supply. ii. Rare earth refiner seeking to secure off-take as refinery feedstock. iii. Rare earth end user seeking to secure long term, stable supply of raw material. Mining the Territory, September 2013
  • 18. 18 Ticks these boxes Cattle Creek Resource size  >230k t of contained TREO (still very much open: from a small part of one of several large alluvial fans) Mineralogy  Preferred monazite and xenotime HREE & CREE Composition  18% HREE and 30% CREE by weight 80% of $57/kg basket price is CREE Low capital cost  $156 M to produce 3,600tpa high purity REO Carbonate Low cost mining and processing  Proven low risk heavy mineral sand process technology Scalable  Base case on 50% of current resource in part of one alluvial fan; long term concept is to replicate production centres with different investor mixes on different zones Location  Northern Territory , Australia Infrastructure  Road, Rail, Power and People Regulatory regime  60 year history of mining radioactive materials Early start-up  Pilot plant 2013/14 and full scale production 2016 Mining the Territory, September 2013
  • 19. CUX DIRECTORS Name Position Bob Richardson Chairman Geoff Eupene Executive Director Peter Walker Non-Executive Director Malcolm Smartt Finance Director Sia Hok Kiang Non-Executive Director CORPORATE SUMMARY ASX code: CUX Shares on issue: ~186 million Options on issue: ~53 million Total Shares (fully diluted): ~239 million Market Capitalization $6.0 million Mining the Territory, September 2013
  • 20. 20Mining the Territory, September 2013
  • 21. 21Mining the Territory, September 2013  Low risk mining and processing  Simple gravity spiral plant.  Tailings pumped to pit void.  Wet Plant flowsheet confirmed via full-scale spiral pilot test work.  Wet Plant concentrate 8-12% TREO.  Dry plant fully tested at pilot scale.  Dry Plant concentrate 40% TREO.  Large volume of final dry plant concentrate now available for downstream testwork.
  • 22. 22Mining the Territory, September 2013  Significantly lower capital due to high grade REO concentrate feed (~40% TREO)  Feed rate only 1.2 tonne / hr  Excellent extraction using sulphuric acid roast and water leach (>95% REE extraction)  High purity mixed rare earth carbonate produced (97-99% purity RE Carbonate)  Uranium by-product currently proposed to be sold to local uranium producer  Removal of cerium and possibly La to be examined to further value added mixed carbonate product  Expecting to produce radionuclide free mixed carbonate