Australian explorers and miners are joining the growing mob trying to pouch rare earths and critical metals in resource-rich Canada. Here’s why.
According to S&P Global, Canada’s exploration budgets hit a decade high in 2022, increasing 29 per cent year-over-year to $2.68 billion – double the 16 per cent global average growth and outpacing budgets with comparable exploration destinations such as Australia and the United States.
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While the biggest chunk of exploration spending came out of the junior gold sector ($US1.789 billion), exploration budgets from copper, nickel, uranium, and lithium miners have also been growing rapidly, reaching $233 million, $209 million, $118 million, and $77 million respectively.
Picture: S&P Global
In British Columbia, mineral explorers spent a record $740.4 million in 2022, surpassing the previous 10-year high of $681 million seen in 2012 by about 10 per cent.
Analysts at Earnst & Young say that, fuelled by favourable market conditions and demand, copper was the driving force behind the record-breaking year in the province, with exploration in the sector increasing by 84 per cent year over year in 2022, rising from $128 million to $235 million.
“Similarly, critical metals exploration in BC jumped 77 per cent year-over-year, while precious metals spend saw a 91 per cent increase from 2020,” the global consulting agency says.
On the country’s eastern seaboard, Nova Scotia – home to the world’s largest open-pit gypsum mine – sold a record 27,000 mineral claims to industry players last year, a jump not seen for the past five years, with half of these belonging to companies searching for lithium.
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Why Canada?
As well as offering abundant hydropower, and favourable investment conditions provided by the Toronto Stock Exchange, Canada possesses one of the oldest and most developed mining sectors in the world, with skilled workers ranging from geoscientists to miners who operate advanced technology.
Its concentration of expertise has been growing rapidly, with the support and active role of the government, which has been facilitating trade and agreements between countries to make it easier for Canadian mining companies to do business.
In the uranium space, Canadian Prime Minister Justin Trudeau recently announced in-kind support for the Foundation Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST) program, the Biden Administration’s international initiative to help develop nuclear energy programs under the highest standards for safety, security, and non-proliferation.
Conditions are so good that uranium giant Cameco hit the restart button on the world’s biggest uranium mine, McArthur River, in Canada’s world-class Athabasca Basin.
From uranium to rare earths
But while the region is best-known for its enormous amount of uranium potential (it produces 20 per cent of the world’s supply), Valor Resources (ASX:VAL) executive director George Bauk says one of the most fascinating features of the area is its rare earths prospectivity.
“In the past there has been a concentrated uranium exploration effort in the Athabasca Basin, but what many people don’t know is that uranium and rare earths go hand-in-hand fundamentally,” Bauk says.
“Rare earth elements tend to be found on the pathway to something else, whether that be a phosphate deposit or rare earths deposit but when it comes to the Athabasca Basin, historically, these minerals have been walked over, and it has only been in recent times that we’ve seen more elevated efforts to look at their potential.”
This is reflected by Valor, which diversified from its uranium focus in the region by adding a rare earths string to its bow with the staking of three new mineral claims spanning 6.41sq km – two of which cover the historical Beatty River heavy rare earths project.
Bauk is something of an expert when it comes to rare earth elements, having carved out much of his early experience at Northern Minerals (ASX:NTU), the developer of the Browns Range project in Western Australia, which holds a 10.81Mt resource at 0.76 per cent TREO for 81,450t of TREO.
Valor’s technical director Robin Wilson led NTU’s exploration team when they made the Browns Range discovery.
“We believe the mineralisation style and geological setting of the area shares similarities with the hydrothermal unconformity-related rare earths deposits of Northern Mineral’s Browns Range project,” Bauk says.
ASX explorers making moves
But there are other ASX explorers on the hunt for rare earth elements in Canada (or starting operations), too.
VITAL METALS (ASX:VML)
This became Canada’s first, and North America’s second rare earths miner after starting operations at its Nechalacho project in the country’s Northwest Territories.
The company has been crushing and sorting ore from the North T starter pit since June 2021 before sending the material to its Saskatoon rare earths demonstration extraction plant to produce a rare earths carbonate product.
Although VML has worked hard in recent months to refine the business case for Saskatoon, earlier this month the company pressed pause on all construction activities at the site to conserve cash and seek alternative funding sources.
Interim chair Richard Crookes cited a lack of an immediate market for its products, as well as lower rare earth prices, but said the processing facility could still provide valuable immediate processing capacity for a downstream rare earths hub in Saskatchewan.
“North America needs independent downstream processing to further enable the transition to the green economy and Vital is looking forward to working with like-minded parties to deliver a completed project,” he explained.
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MTM CRITICAL METALS (ASX:MTM)
Formerly known as Mt Monger, MTM Critical Metal acquired the “Pomme” rare earths-niobium exploration project in Canada’s Abitibi region in Quebec, a century-old hub for discovery.
A recent drone magnetic survey completed at the project provided “exceptionally high quality” data ahead of diamond drilling, which will allow the company to model both the geological and REE mineralisation responses.
Proceeds from a recent $3 million raise will be used for the maiden drill campaign and metallurgical testwork at Pomme, which it bought from TSX listed explorer Geomega Resources for around $1 million in cash and shares.
The company says Pomme has similar geology to Geomega’s advanced 266Mt Montviel carbonatite REE-Nb deposit, just 7km away.
Just two holes were punched into Pomme back in 2012, but they both returned thick mineralised intersections interspersed with high grade chunks, including a highlight 508.3m at 0.43 per cent TREO, 413ppm Nb2O5 and 1.48 per cent P2O5, from 73.7m depth.
CAZALY RESOURCES (ASX:CZY)
At the end of April, Cazaly Resources acquired the Carb Lake REE project in Ontario’s Red Lake district, comprising 93 mineral claims covering a large carbonatite prospective for rare earth elements.
Historical data is currently being sourced and compiled into a format that can be readily used.
Upon completion of due diligence, full assessment of all available data and Cazaly’s decision to complete the acquisition, a field assessment will be conducted and follow up exploration activities will be prioritised.
“This will mark the first modern exploration on this excellent REE target in over a decade,” CZY managing director Tara French said.
“The project provides Cazaly with a unique opportunity to conduct exploration for REEs which are some of the world’s most critical minerals required for decarbonisation.”
This content first appeared on stockhead.com.au
At Stockhead we tell it like it is. While MTM Critical Metals and Valor Resources are Stockhead advertisers, they did not sponsor this article.
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