Vancouver — With more than $3 million in its coffers,
In Manitoba, the company is engaged in drilling the South Bay nickel/copper/cobalt/platinum-group-element project. The 3,000-metre program is testing the extent of the nickel mineralization discovered in a road cut last September. The discovery straddles the provincial road connecting the communities of Leaf Rapids and South Indian Lake. Eleven samples of semi-massive-to-near-massive sulphide boulders recovered from blast rubble in the road-cut exposure averaged 2.42% nickel, 0.78% copper, 697 parts per million cobalt, and 1.32 grams combined platinum group elements per tonne.
The drilling will test the mineralization at depth, as well as along strike, and target prominent geophysical anomalies adjacent to, and along strike of, the discovery outcrop.
As well, Rare Earth Metals plans to drill a series of stratigraphic holes across the anomalies.
The nickel mineralization is comparable to that found in magmatic sulphide-hosted deposits and consists primarily of pyrrhotite, pentlandite, millerite, chalcopyrite, and pyrite. The 2-to-7-metre-wide metaliferous zone is hosted in a biotite schist that is believed to be associated with mafic intrusions in the area. The surrounding country rocks are typically sulphidic metasedimentary rock units.
The 2004 winter field program began in mid-January with line-cutting, which extended the existing grid by an additional kilometre. This followed a program of ground geophysics in the fall, which identified several prominent geophysical anomalies that trend parallel to the nickel mineralization seen at the road cut. These anomalies measured the entire length of the existing grid — a distance of 2 km — and remain open. The grid extension follows the trend of these geophysical anomalies. Rare Earth Metals is now conducting additional ground magnetic and electromagnetic surveys over the new grid at line spacings of 50 metres.
As a result of the identification of these geophysical anomalies, Rare Earth Metals’ land position in the area now exceeds 200 sq. km.
South Bay is in an area with excellent infrastructure, including roads, power, and existing mining communities. Moreover, it is only 300 km from the fully integrated nickel mining and smelting complex at Thompson, Man.
A review of government archives and field reconnaissance reveals that the area has received only a small amount of exploration.
The discovery itself was made during a regional prospecting tour northeast of the Leaf Rapids. The fresh road cut had not begun to oxidize into a gossan, and a closer examination revealed the presence of copper and other sulphide mineralization. Samples were subsequently taken.
Rare Earth Metals can acquire all of South Bay subject to a 3% net smelter return royalty; in return, it must issue 500,000 shares, pay $250,000 in cash, and spend $1 million on exploration over five years. The agreement covers 26 blocks totaling more than 60 sq. km.
Longstreet
Last year, Rare Earth Metals acquired the Longstreet mine gold-silver project in southwestern Nevada. The property is 55 km northeast of Tonopah.
Longstreet has seven known zones of gold-silver mineralization. Four of these, including the Main zone, are heap-leach, open-pit targets that host oxidized sheeted-vein gold-silver mineralization. The remaining three are deeper, bonanza-style, high-grade, underground targets.
Rare Earth Metals can earn a 100% interest in the Longstreet mine property by issuing 1 million shares to Nevada-based MinQuest, paying that company US$310,000, and spending US$760,000 on the project over four years.
In 1988, a preliminary feasibility study by Nevada-based Mine Development Associates reported a measured resource of 3.2 million tonnes averaging 0.82 gram gold and 19.5 grams silver per tonne. The Main zone remains open at depth, as well as to the west and to the southeast. Most of the gold and silver mineralization is hosted in steeply dipping vein sets.
Longstreet was recently subjected to drilling in order to verify the extent and continuity of the Main zone. This zone represents a surface volcanic-hosted gold and silver resource and was initially mined in the 1920s.
The drilling intersected two of the main sheeted vein set structures. Only nine of the 15 planned drill holes could be completed before winter weather conditions halted the program. All nine, excluding hole 7, were drilled to a total depth of 91.4 metres. Hole 7 was drilled to a depth of 152.4 metres. Highlights are as follows:
— Hole 1 intersected 3 metres averaging 1.88 grams gold and 65.5 grams silver per tonne starting at a down-hole depth of 42.7 metres. This was followed by a 3-metre section of 0.61 gram gold and 37.5 grams silver starting at 59.4 metres down-hole, as well as a 12.2-metre interval that averaged 0.53 gram gold and 52 grams silver starting at 74.7 metres down-hole.
— Hole 2 cut 3 metres averaging 0.86 gram gold and 34.5 grams silver starting at 51.8 metres down-hole.
— Hole 3 cut 6.1 metres averaging 2.03 grams gold and 84.7 grams silver starting at 13.7 metres down-hole. This was followed by a 7.6-metre interval of 1.4 grams gold and 103.4 grams silver starting at 44.2 metres down-hole.
— Hole 4 cut 7.6 metres averaging 1.78 grams gold and 13.2 grams silver starting at 24.4 metres down-hole.
Rare Earth says the drilling showed continuity of mineralization at Longstreet. The strike and downdip extent of mineralization will be tested in the spring, when weather permits.
Assean Lake
Rare Earth Metals holds a 40% interest in the Assean Lake project in north-central Manitoba.
Gold mineralization has been discovered in six areas over a 12-km strike length along the Assean Lake shear zone — a regional, deep-tapping, crustal break that can be traced for more than 200 km from the town of Thompson.
The Assean Lake property covers the midpoint of this ancient fault structure.
The partners just began a 4,000-metre program of diamond drilling in order to test the depth extent of the high-grade Hunt zone, on the Hunt Peninsula, as well as the Blowfish target, on the northern shore of Assean Lake.
The Hunt zone has been drilled to a depth of 300 metres in previous programs and traced for 600 metres along strike.
The Blowfish target was discovered in 2003, when the discovery hole, 128, intersected 6.2 metres grading 5.69 grams gold.
The 2003 program consisted of 33 core holes totalling 3,745 metres. Seven holes tested the BIF zone over a strike length of 700 metres. Six of these holes intersected broad gold intercepts. Five of the reconnaissance holes intersected gold.
More than $2 million has been spent exploring the project. Last year, Rare Earth Metals doubled its land holdings in the area; it now holds a 35-km-long, contiguous property along the shear zone.
Rare Earth’s early-stage Eden Lake project, 35 km northwest of Leaf Rapids, Man., hosts a carbonatite complex. In May 2003, the company released encouraging results from surface exploration performed by Dr. Hamid Mumin, an associate professor at Brandon University.
Reconnaissance and geological mapping, sampling, and petrographic studies contributed to the discovery of a 7-sq.-km area that hosts hydrothermal and magmatic stockwork veining and breccia. Also discovered were carbonatite dykes and plugs, which are characteristic of a large carbonatite complex.
Rare Earth Metals encountered a variety of mineralization styles at Eden Lake, and several of these may have economic potential. Of particular interest are rare-earth-element enrichments. About 140 samples were collected and analyzed at Vancouver-based ACME Analytical Services.
The highest REE concentrations encountered to date were those found in the carbonatite dykes, with values of up to 1.6% total REE and 9,764 ppm strontium and 745 ppm yttrium. The hydrothermal rare-earth-element-rich veins returned values of up to 13.8% total REE, 5,307 ppm yttrium and 5,465 ppm thorium plus uranium.
The U.S. Geological Survey estimates that the value of refined rare earths consumed in the U.S. in 2002 exceeded $1 billion. Roughly 80% of North America’s rare earth elements are sourced from China.
Rare Earth Metals has a market capitalization of about $12 million. The company has 14.1 million shares issued and outstanding and 21.8 million shares fully diluted.
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