Ivanhoe Touts Aussie Rhenium-Moly Project

When Peter Reeve describes Ivanhoe Australia’s “remarkable” Merlin zone, he likens it to some of the great mineral discoveries in Australian history.

The Melbourne-based chief executive of Ivanhoe Australia, in which Ivanhoe Mines (IVN-T, IVN-N) holds an 83% stake, says the discovery of the rhenium-molybdenum zone, part of the Mount Dore deposit in northwestern Queensland, will have a large impact on the company and has the potential to make it the “dominant and most reliable supplier” of rhenium in the world.

Indeed, Ivanhoe Australia asserts that the Merlin zone, about 100 km south of Cloncurry and 140 km southeast of Mount Isa, is a “new type of molybdenum (rhenium) deposit with average grades an order of magnitude higher than the highest- grade existing molybdenum producers.”

Rhenium is a very rare, silvery metal that sells for about US$350 per oz., up from between US$35-70 per oz. in 2005.

The element is used in high-temperature superalloys that are used to make jet engine parts like turbines and in platinum-rhenium catalysts that are primarily used to make lead-free, high-octane gasoline.

Rhenium’s extremely high melting point (3,180C) is surpassed only by tungsten and carbon, and makes it ideal for use in aircraft engine turbine blades. Ivanhoe estimates about 25 kg of rhenium is needed for each rhenium-alloy turbine manufactured by General Electric, Pratt & Whitney and Rolls-Royce. And global production is just 50 tonnes of rhenium a year.

One barrier to commercial recovery is the high cost of the required smelter technology. Typically, rhenium is extracted from flue gases from roasting molybdenum concentrates.

A JORC-compliant resource estimate released in April for the Merlin zone has defined 13 million tonnes grading 0.8% molybdenum, 14 grams rhenium per tonne, 0.2% copper and 4.8 grams silver.

Those figures add up to about 110,000 tonnes of molybdenum, 180,000 kg (or 6 million oz.) of rhenium, 30,000 tonnes of copper and 2 million oz. silver.

The estimate was based on a strike length of 500 metres and used results from just 60 drill holes. A total of 100 holes have been drilled so far, with assay results completed for 87.

Some of the highlights from the assay results include hole 115, which returned 38 metres grading 1.2% molybdenum, 17.29 grams rhenium and 0.17% copper from 246 metres, and hole 119, which cut 58 metres of 2.25% moly, 28.99 grams rhenium and 0.09% copper from 408 metres, including 20 metres of 6.26% molybdenum, 81.83 grams rhenium and 0.14% copper.

The initial resource suggests a high-grade deposit in both molybdenum and rhenium. And because Merlin’s mineralization is close to surface and relatively shallow, mine development can be done at a fairly low cost.

Starting at a depth of 100 metres, the mineralized zone extends downdip for more than 400 metres with an average width of 25 metres. So far, Ivanhoe has identified a strike length of 900 metres but the deposit remains open to the north along strike and downdip.

A scoping study has been started and will be completed before the end of the year.