Summit Minerals buys parcel to grow Brazil niobium project

Summit Minerals (ASX: SUM) has expanded its Equador niobium and tantalum project in northeast Brazil with the acquisition of a small tenement beside the project from RTB Geologia and Mineracao, a local junior focused on lithium projects. 

The 2-sq.-km exploration rights area has outcropping pegmatites that have returned promising results, Summit said on Monday. It also holds several small-scale artisanal mines that are known to be associated with niobium and tantalum occurrences, it said. 

Niobium and tantalum are transition metals that are almost always found together in nature. According to the United States Geological Survey (USGS), the steel industry uses nearly 80% of the world’s produced niobium to manufacture high-strength low-alloy steels. Tantalum stores and releases energy, which is why the electronics industry consumes more than half of the world’s production.

The agreement with RTB Geologia and Mineracao sees Summit paying US$50,000 cash and 800,000 ordinary shares in the company. The stock amount is valued at A$216,000 ($200,000) using Friday’s share price of A27¢ apiece. Half of the shares will be escrowed for six months from the completion date, Summit said. 

“This is another exceptional acquisition for the company to add areas of geological significance which have proven results,” managing director Gower He said. “This project just continues to amaze us on its potential and areas of growth.”

Sample results

As part of due diligence analysis, the company collected rock chips which indicated grades similar to the existing Equador project results. 

The results include 42.93% niobium pentoxide, 11.39% tantalum pentoxide, and 33,310 parts per million (ppm) partial rare earth oxides (PREO); and 21.21% niobium pentoxide, 79.49% tantalum pentoxide, and 199,150 ppm PREO. 

The rare earths and niobium-focused explorer has also completed a bulk sampling program to provide a sufficient representative sample for the metallurgical test program.

This will assess the ability to create economical niobium and tantalum concentrate and assist in making decisions around the project’s next development stages, Summit said.

Other than exploring in Brazil, Summit Minerals is also engaged in activities in Canada and Western Australia. 

Shares in the company closed on Tuesday at A$0.28 each for a market capitalization of A$23.2 million ($21.5 million).