Objective Capital Rare Earth and Minor Metals Investment Summit: Exploring for rare earths in Namibia - Don Burton

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Objective Capital Rare Earths, Speciality and Minor Metals Investment Summit
Focus on rare earths projects around the world
Exploring for rare earths in Namibia
18 March 2010
by Don Burton, Etruscan Resources

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Objective Capital Rare Earth and Minor Metals Investment Summit: Exploring for rare earths in Namibia - Don Burton

  1. 1. Investment Conferences RARE EARTHS, SPECIALITY & MINOR METALS INVESTMENT SUMMIT 3.45 – 4.10 Focus on rare earths projects around the world Exploring for rare earths in Namibia Don Burton – Vice President, Etruscan Resources THE LONDON CHAMBER OF COMMERCE AND INDUSTRY ● THURSDAY, 18 MARCH 2010 www.ObjectiveCapitalConferences.com 1
  2. 2. Rare Earth Element Potential of the Lofdal Carbonatite Complex, Namibia - An Investment Opportunity (March 2010) 2
  3. 3. Etruscan is Restructured and Refocused on Gold • New ownership (55% Endeavour Financial), board & management • Restructured project debt • Completed equity financing • Stabilized gold mine operations, optimizing gold development projects and streamlined exploration programs & initiatives in West Africa • Divested of diamond assets in South Africa • Corporate head office relocation to London underway “GOLD IN WEST AFRICA” 3
  4. 4. Background of Etruscan in Namibia • Etruscan entered Namibia in 2005 with the objective of exploring for IOCG deposits • Major ground positions were established east of Windhoek and in the north near Khorixas • Ground in the north was taken in part because of numerous Cu occurrences and a known REE occurrence at Lofdal farm • There is an association of REEs with IOCG deposits • No IOCG systems have been identified but exploration of the REE occurrence at Lofdal has provided strong evidence for the potential discovery of a world class REE deposit that could be enriched in the more valuable heavy rare earths 4
  5. 5. The Investment Opportunity • REEs have captured the interest of a very specific sector of the investment community which understands their high tech and green applications, creating a window of opportunity • Legitimate REE projects (especially those with enrichment in heavy rare earths) having a serious production potential are scarce and the market is dominated by the Chinese (+/-95%) • Recent changes in control and management at Etruscan have affirmed that the strategic objectives for the Company are to be focused on gold in West Africa • The Board of Etruscan has mandated that a suitable means/vehicle for value creation of the REE project be determined 5
  6. 6. Creation of a New Rare Earth Company • Early exploration results from Lofdal have demonstrated the viability of the project and Etruscan’s exploration expertise, Namibian infrastructure and experience would allow for growth in the REE space in Namibia • The Namibian assets will be rolled into a private company within the next 3 months, with a subsequent IPO to be completed within 12 months • Creation of the private company presents an investment opportunity for qualified investors • NewCo will be focused on discovery and resource delineation • Strategic alliances with rare earth industry leaders are being considered 6
  7. 7. The Lofdal Rare Earth Project Lofdal Carbonatite Complex 450 km northeast of Windhoek Paved highway to the town of Khorixas then 20 km by gravel road Lofdal EPL covers 1,000 km2 7
  8. 8. History at Lofdal is Very Recent – This is an Emerging Exploration Story • Carbonatite dykes discovered in 1980s • Mapping by the Geological Survey of Namibia (“GSN”) delineated the main carbonatite intrusion in 2007; recognition of the economic potential of the HREE-enriched dykes by the GSN in 2008; discovery of the second carbonatite intrusion by the GSN in 2008 • Etruscan is the first company to explore the area for rare earths and has conducted two field campaigns since 2008, collecting over 3,000 rock samples from a 25 km2 area • Classic “boot and hammer prospecting” approach being merged with an outstanding government database 8
  9. 9. Project Geology The alkaline intrusive complex at Lofdal is comprised of carbonatites, syenites and nepheline syenites that have intruded highly metamorphosed gneisses and schists of the +/-1700 Ma Huab Metamorphic Basement Complex which is bounded by Damara Sequence sediments to the north and south. The carbonatite dykes and intrusions clearly cross-cut all of the other rocks and represent the youngest intrusive event. REE mineralization has been dated coeval with nepheline syenites at +/-764 Ma. This age is very distinct from the younger (+/-135 Ma) rift-related magmatism of other alkaline and carbonatite complexes in the region 9
  10. 10. Project Geology Area Explored to date 10
  11. 11. Carbonatites are Very Distinctive Rocks Dyke Low Grade Plug High Grade Carbonatites are intrusive or extrusive igneous rocks defined by mineralogy that comprises more than 50% carbonate minerals. Carbonatites may be confused with marble or limestone. 11
  12. 12. First Pass Prospecting and Mapping Highlights • Mapping and rock grab sampling has covered approx. 25km² • First 1,426 grab samples have returned an average grade of 0.7% TREE+Y (database now in excess of 3,000 samples) • 602 samples >0.5% average 1.3% TREE+Y • 292 samples >1% average 2% TREE+Y • The highest individual sample graded 8.9% TREE+Y and the highest heavy rare earth (HREE) enriched sample graded 1.75% HREE 12
  13. 13. Exploration at Lofdal: Surface Sampling Over 25 Km2 Only 2 press releases: - October 2008 - January 2009 Main Intrusion (n = 1,426 samples) Emanya Plug Short campaign from November to December 2009 continued surface sampling with similar Main Intrusion results (n > 3,000 samples) Emanya Plug 13
  14. 14. Rare Earth Deposits are “Polymetallic” with High Value in the Heavies The value per tonne is determined by the mix of REEs in a deposit. Heavy rare earths are much more valuable than light rare earths Most REE deposits are predominantly enriched in light rare earths At Lofdal there is a complete suite with significant enrichment in heavy rare earths and yttrium 14
  15. 15. Lofdal is Real and It Has Heavies Rare Earth Element Distribution of Lofdal Dykes Compared to Some Major Rare Earth Deposits (percent distribution calculated from oxides) Lofdal Dykes Emanya Mountain 1 2 3 Element Atomic Carbonatite Mt. Weld Pass 4 Hoidas Lake 5 Symbol (%) (%) (%) (%) (%) Lanthanum La 25.9 28.8 21.9 33.0 19.8 Cerium Ce 40.9 43.9 46.4 49.0 45.8 LREE Praseodymium Pr 3.9 4.3 4.9 4.0 5.8 Neodymium Nd 12.0 13.4 17.3 13.0 21.9 Samarium Sm 1.8 1.6 2.5 0.5 2.9 Europium Eu 0.6 0.4 0.6 0.1 0.6 Gadolinium Gd 2.1 1.6 1.7 0.2 1.3 Terbium Tb 0.3 0.2 0.2 Insig 0.1 Dysprosium Dy 1.6 0.7 0.9 Insig 0.4 HREE Holmium Ho 0.3 0.1 0.1 Insig Insig Erbium Er 0.9 0.4 0.3 Insig 0.2 Thulium Tm 0.1 0.1 0.1 Insig Insig Ytterbium Yb 0.7 0.4 Insig Insig Insig Lutetium Lu 0.1 0.1 0.0 Insig Insig Yttrium Y 9.0 4.1 3.1 Insig 1.3 Total % 100.0 100.0 99.9 99.8 99.9 1 Etruscan Resources 1,208 samples of carbonatite dyke 2 Etruscan Resources 218 samples of the new carbonatite intrusion 3 Lynas Corporation Website 4 Molycorp Website 5 Great Western Minerals Website 15
  16. 16. Lofdal is Real and It Has Heavy Rare Earth Elements LOFDAL - All Dykes >1% 1000000 LOFDAL - Emanya Plug >1% 100000 Mountain Pass, California (Chondrite Normalized Chinese laterite ore 10000 REO/C1 1000 100 10 Light Rare Earths Heavy Rare Earths 1 La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Rare Earth Elements 16
  17. 17. Rare Earth Element Minerals Identified to Date Light Rare Earth Minerals: Bastnaesite, parisite, synchysite, monazite, allanite Heavy Rare Earth Minerals: Xenotime, aeschynite 17
  18. 18. Putting Grade into Perspective: Lofdal is an exploration stage project. There is no ore body yet, and extraction and processing characteristics would be key factors in determining economics. The economic significance of the preliminary data from Lofdal is related to the mix of REEs present, which shows certain samples are extremely enriched in heavies. TREE+Y Lights Heavies Rare Earth Element Lanthanum Cerium Praseodymium Neodymium Samarium % % % La-ppm Ce-ppm Pr-ppm Nd-ppm Sm-ppm Mt. Weld Central Zone 13.80 13.50 0.25 Mt. Weld Central Zone 35,328 63,121 7,480 25,696 3,367 (2.5 TREO % cutoff) ( 2.5 TREO % cutoff) Mountain Pass 8.48 8.46 0.03 Mountain Pass 28,050 41,650 3,400 11,050 425 ( 5% TREO cutoff) ( 5% TREO cutoff) Lofdal Dykes (n = 292) 1.86 1.62 0.12 Lofdal Dykes (n = 292) 4,882 7,874 771 2,289 353 (1% TREO+Y Cutoff) (1% TREO+Y Cutoff) Selected Samples: Selected Samples: ERN15768 2.58 0.36 0.86 ERN15768 632 1,200 149 631 938 ERN15746 3.40 0.16 1.18 ERN15746 250 450 53 220 583 ERN15425 2.72 0.26 0.83 ERN15425 525 1,030 124 523 392 ERN 18198 7.67 6.88 0.41 ERN 18198 22,000 33,700 3,110 8,780 1,220 ERN15451 6.63 6.27 0.20 ERN15451 19,950 31,300 2,840 7,760 823 ERN15444 7.92 7.40 0.31 ERN15444 21,000 37,200 3,510 10,600 1,690 ERN15424 8.85 8.31 0.31 ERN15424 22,400 44,200 4,120 11,100 1,290 LREE Enrichment? Average Grades Crustal Abundance 35 70 8 30 7 “Lights” 18
  19. 19. Putting Grade into Perspective: Europiuim and gadolinium concentrations seem equally concentrated in both populations, with yttrium enrichment favouring the HREE population. Dykes at Lofdal are potentially economic but early exploration focus is on the discovery of an intrusive plug with the same HREE concentrations as found in the dykes. Rare Earth Element Europium Gadolinium Terbium Dysprosium Holmium Erbium Thulium Ytterbium Lutetium Yttrium Eu-ppm Gd-ppm Tb-ppm Dy-ppm Ho-ppm Er-ppm Tm-ppm Yb-ppm Lu-ppm Y-ppm Mt. Weld 759 1,339 124 221 14 28 0 14 0 511 (2.5 TREO % cutoff) Mountain Pass 85 170 0 0 0 0 0 0 0 0 @ 5% TREO cutoff Lofdal Dykes (n=292) 107 409 56 278 51 133 17 92 12 1,267 ( 1% TREO+Y cutoff) Selected Samples: HREE ENRICHMENT? ERN15768 551 1,805 421 2,610 511 1,390 178 978 123 13,650 ERN15746 524 1,910 547 3,730 790 2,150 303 1,655 219 20,600 ERN15425 280 1,140 370 2,770 603 1,680 221 1,135 137 16,300 ERN 18198 403 1,630 232 1,045 167 396 38 178 20 3,810 ERN15451 201 952 90 353 64 184 17 87 11 1,660 ERN15444 364 1,485 156 587 93 240 21 106 12 2,140 ERN15424 328 1,500 149 567 96 272 26 136 15 2,300 Eu-Gd CONSISTENT? Crustal Abundance 1 7 1 6 2 4 1 4 1 35 “Heavies” and Yttrium 19
  20. 20. What is the Relationship Between Dykes and Intrusive Plugs at Lofdal? 20
  21. 21. Potential Area of Interest Covers 125 km2 Carbonatite complex responds well to airborne radiometrics Additional ground to be prospected 21
  22. 22. Pending News on Lofdal Etruscan Resources/NewCo • Additional rock samples • Geophysical targeting • Preliminary mineralogy Geological Survey of Namibia Initiatives • Hyperspectral airborne • VTEM airborne • PhD thesis • Undergraduate theses 22
  23. 23. Next Steps at Lofdal 1. Continued Regional Exploration: i) Mapping/sampling covering entire thorium anomaly ii) Detailed airborne high resolution radiometric and magnetic coverage of entire prospective area iii) Study and interpretation of hyperspectral data, integration of all geophysical and geological databases to identify additional carbonatite plutons/dykes at shallow depth 2. Detailed Exploration i) Mapping, channel sampling and trenching of the highest grade carbonatite dykes and Emanya plug ii) Scintillometer surveys to delineate HREE-enriched portions of dykes and plugs 23
  24. 24. Next Steps at Lofdal (continued) 3. Mineralogy: i) General characterization of REE minerals (oxides, phosphates, silicates) ii) Focused study of the samples with potential economic grade iii) Grain size characteristics, preliminary extractive issues 4. Drilling 5,000 to 10,000 meters of diamond drilling based on surface results and mineralogical characteristics 24
  25. 25. Working in Namibia: Why Lofdal can Succeed • Political stability and support for the mineral sector • Mining history • Infrastructure • An outstanding government commitment to geoscience and the mineral sector with high quality regional mapping, airborne geophysical and specialized remote sensing (hyperspectral) data available to the public • Strong cooperation with the Geological Survey of Namibia with continued mapping and REE focused studies at Lofdal • Lofdal database includes 200 m airborne magnetics and radiometrics, Quickbird, Landsat and Aster imaging, hyperspectral survey completed in 2009 and VTEM survey to be made available in 2010 • Surface sampling rock database (outcrop) now in excess of 3,000 samples 25
  26. 26. Working with an Outstanding Database Towards Discovery Airborne Radiometrics Thorium Main Intrusion Rock Emanya Plug Sampling 26
  27. 27. Working with an Outstanding Database Towards Discovery Hyperspectral Coverage over Lofdal 27
  28. 28. Working with an Outstanding Database Towards Discovery Hyperspectral Coverage over Lofdal Rock Sampling 28
  29. 29. Working with an Outstanding Database Towards Discovery Hyperspectral Image Processing Ongoing 29
  30. 30. Working with an Outstanding Database Towards Discovery Hyperspectral Image Processing Ongoing Rock Sampling 30
  31. 31. Working with an Outstanding Database Towards Discovery 1 km 1 km Using hyperspectral imaging to map carbonatite dykes 1 km 31
  32. 32. Working with an Outstanding Database Towards Discovery 1 km Combining hyperspectral imaging with magnetics to search for plugs 1 km + = 1 km 32
  33. 33. The Lofdal Carbonate Complex: Potential for the Discovery of an Economic Source of Heavy Rare Earths Ideal Target: 300 m diameter plug >25MT… Rock Sampling 33
  34. 34. Rare Earth Element Potential of the Lofdal Carbonatite Complex, Namibia – An Investment Opportunity • District scale potential for a heavy rare earth discovery • Backed up by an extensive, high quality database comprising recently acquired airborne geophysical surveys coupled with complete REE suite of over 3,000 rock samples • Ready for detailed follow up in most prospective areas (trenching and channel sampling) and then drilling • Corporate mandate to fund in a new vehicle • Early stage investment opportunity in a legitimate heavy rare earth exploration project • Subsequent opportunity within 12 months via IPO 34
  35. 35. Rare Earth Element Potential of the Lofdal Carbonatite Complex, Namibia - An Investment Opportunity “Thank You for Your Attention”

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