Reach is spreading its critical minerals wings with lithium, rare earths and manganese acquisitions

Rare earths and other critical minerals required for electrification are hot property on the market as the world continues to move towards net zero emissions.

Reach Resources (ASX:RR1) has clearly read the memo with the company focused on exploring for critical minerals in Western Australia – specifically the Skyline and Critical Elements rare earths projects which it had picked up in November 2021 as part of a broader package.

The Critical Elements project consists of licences EL 09/2354 and EL 09/2377 that cover a 59km2 area in the Yinnietharra region of the Gascoyne Mineral Field and have historically produced significant quantities of beryl, mica, bismuth, tantalum and niobium from coarse grained pegmatites

Exploration activities in the past have been primarily focussed on tantalum-niobium-beryl-mica and to a lesser extent uranium.

Speaking to Stockhead, chief executive officer Jeremy Bower noted that the southernmost of the two licences are near Kingfisher Mining’s (ASX:KFM) Mick Well deposit which has seen considerable success with rare earth exploration

“To date we have  uncovered a high-grade niobium target and heavy rare earths at the tenement closer to Kingfisher which is very exciting for the company” he explained.

The Skyline project is approximately 80km north of the Company’s Critical Elements project and lies directly east of Hastings Technology Metals (ASX:HAS) REE project. Skyline  consists of exploration licence EL 09/2646 and the company has recently applied for three more tenments nearby all of which  are considered to be prospective for monazite hosted rare earth elements.

Previous work conducted in the area has outlined an extensive mineralised system where shallow near surface exploration has the potential to delineate shallow JORC Resources, offering the company excellent exploration upside potential.

“We have had some reasonably high grades of up to 0.6% TREO at the western side of Skyline next to the HastingsYangibana project,” Bower added.

While these projects and the exploration success experienced to date – along with an existing Inferred gold resource of 105,000oz at an average grade of 3.2 grams per tonne at the Primrose project – provides a strong base for Reach to work with, the company is keen for more and has taken steps to increase its land position and diversify its offering.

Lithium, manganese and more rare earths

Over at the Yinnietharra region, the company has picked up licences E09/2388 and E09/2375 that expand the footprint of its Critical Elements project while the acquisition E09/2539 and E09/2542 will link the two licences that make up Skyline into a single contiguous project.

Of these, Reach is particularly excited by E09/2375, which serves to bring known lithium mineralisation into its portfolio.

“Previous work has identified a 5km long lithium soil anomaly with caesium, tantalum in soils to a level that indicates LCT pegmatites,” Bower said.

“There are widespreadoutcropping pegmatites already mapped across that tenement.”

But what’s most on point for the company is that the new licence shares the same geology as Red Dirt Metals’ (ASX:RDT) Yinnietharra lithium project, which has seen drill intersections encountering lithium and spodumene mineralisation.

“That for us is a really big acquisition and the one that we will focus on our efforts on initially” Bower added.

“When you are exploring for lithium, you want a few things such as the right geological formations and Red Dirt talk about a “Goldilocks zone”, where pegmatites show the most evolution a certain distance from the source granites into LCTs and they have got the drilling to prove it.

“We share the same geology, we also have rock chip samples of outcropping pegmatites which have gone up to 1.32% lithium oxide (Li2O), and the pathfinder minerals in soils being caesium and tantalum which indicate that as well.

“Those three factors really give you a strong confidence into the prospectivity to discover further lithium mineralisation.”

In contrast, E09/2388 has seen less work though it remains prospective for rare earths due to preponderance of previous tantalum, niobium and beryl hits from WAMEX data.

At Skyline, the company is acquiring E09/2539 and E09/2542 held by Kouzan to add to existing licence and three licence applications.

“To the east, we have Fortescue (ASX:FMG) while to the west and south we have Dreadnought Resources (ASX:DRE) , who have been very successful with rare earths exploration. Of course, there is also Hastings, and Lanthanein Resources (ASX:LNR) has been fairly successful with finding rare earths also, so the REE potential of these blocks is encouraging,” Bower noted.

“However, with this acquisition and our applications to the east bordering FMG, we are diversifying into manganese.

“Manganese is a much simpler metal to mine – It is open pit, it requires less processing , making it obviously cheaper. It has no substitute in the steel making process, so clearly there’s huge demand from China and Japan.

“The other growing importance for manganese is in battery cathodes, where it is growing in importance for battery and EV manufacturers.”

This diversification underscores Bower’s plan to diversify into other critical minerals besides rare earths and as a way to hedge its bets on which way the company can go.

“If we do find, REEs, lithium and manganese, it gives us a lot of options in terms of what we can do in the future. Manganese also has the potential to  offer the opportunity for early cash flow,” he explained.

“That manganese block has outcropping manganese along a 50km strike length with grades up to 18.1% thus far, with higher grades up to 34.6% on the border with our current tenement applications”

“The Ullawarra formation, which is the geological host  runs for 200km with known manganese hits along it”

Attractive costs

What makes all this even more attractive for Reach is the comparatively low price it is paying for its new assets.

The manganese deal near Skyline requires the company to pony up just $120,000 in cash and a further $120,000 worth of shares while the lithium/rare earths deal cost $200,000 in cash and $800,000 in shares.

Bower noted that the latter compared with Red Dirt’s acquisition of its admittedly larger block with existing drilling that demonstrated lithium and spodumene results for $15m in shares, a further $10m in cash or shares should they define a resource, and a royalty payment.

“I think we have done very well considering the geology is similar,” he added.

“Prospectivity is high, clearly we have got to do further work on it to develop it, but at this stage it is ticking all the boxes for LCT pegmatites and lithium mineralisation.”

One final thing

While Reach’s expanded land holding is certainly exciting, the company also holds a 10% interest in Australian private company REEgenerate that it acquired back in 2021..

REEgenerate owns 100% of REEcycle Inc which holds thr ights to a patented technology that has successfully separated rare earth elements from their oxides in recycled permanent magnets that was first developed out of the University of Houston in Texas.

This is currently not possible using existing recycling technology and is on point with the global electrical revolution and recycling.

It also serves to help secure resource security as it allows users to have a source of rare earths that is not sourced from mining or dependent on Chinese sources.

The company’s stake in this technology grants it exposure to a potentially lucrative downstream revenue source that could complement its exploration and development efforts.

 

 

 

This article was developed in collaboration with Reach Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Reach is spreading its critical minerals wings with lithium, rare earths and manganese acquisitions appeared first on Stockhead.

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