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Arafura Resources (ASX:ARU) released its quarterly activities report for the three months ended March 31 2015. The company reported a cash balance of A$15.8 million at the end of the period.

Arafura Resources (ASX:ARU) released its quarterly activities report for the three months ended March 31 2015. The company reported a cash balance of A$15.8 million at the end of the period.

In addition to other points, the company provided an update on its China-based and Australia-based rare earth extraction programs. As quoted in the press release:

CHINA‐BASED RARE EARTH EXTRACTION PROGRAM

During the reporting period, Stage 1 of the China‐based rare earth (“RE”) extraction (hydrometallurgical) testwork program with two Beijing institutes continued. Earlier this month a detailed evaluation of the optimisation opportunities was completed in conjunction with the Company’s China‐based consultant Sheng Kang Ning (Shanghai) Mining Investment Co (“SKN”). Close out test programs for this stage of the testing are now underway with both of the institutes. This testwork is targeted to confirm and evaluate optimisation opportunities that have been identified. Parallel testing is also underway in an Australian laboratory which will confirm the repeatability of the results and fast‐track the additional development with the assistance of the institutes and SKN.

AUSTRALIAN‐BASED RARE EARTH EXTRACTION PROGRAM

Australian‐based RE extraction testwork has continued during the period. Key activities for this program have focussed on refinement of the sulphuric acid pre‐leach and double sulphate precipitation (“SAPL/DSP”) flowsheet. Significant accomplishments from this SAPL/DSP work include:

  • A substantial reduction in the consumption of sulphuric acid; and
  • Refinement of the detailed mass balance resulting in reduced residue generation.

These testwork results have been incorporated into the base‐case process model and this information cascades into the refinement of the process design which has been used as the basis of a revision of the capital and operating cost estimatesfor the SAPL/DSP flowsheet. Indicationsto date show there is unlikely to be a material change in the capital expenditure presented in the Nolans Development Report (ARU: ASX 02/09/14). Lower operating costs have been achieved as a result of the reduction in acid and other reagent consumptions but this will to some degree be offset by the exchange rate generated movement in USD sourced reagents.  The Company will provide a more detailed update on the latest capital and operating expense estimates in due course. At this stage the Company is awaiting the final outcomes of the testwork programs described above prior to commencing integrated pilot plant (“IPP”) testwork and awarding the engineering‐based work for the Definitive Feasibility Study (“DFS”). The timing for the commencement of these work streams will be examined in greater detail once the China and Australian based RE extraction programs are complete and the Company better understands the potential opportunities offered by this optimisation work.

Click here to read the Arafura Resources (ASX:ARU) press release

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