MARCH 2013

Informed and in-depth editorial on the world mining industry

www.im-mining.com

MINE GROUND SUPPORT

UTILITY VEHICLES

CONTRACT MINING

COPPER EXTRACTION

PROJECT FOCUS: Bokan Mountain

Last November, Ucore Rare Metals reported

very strong results of the PEA completed

by Tetra Tech of the Dotson Ridge Zone of

its Bokan Mountain heavy rare earth property in

southeast Alaska. The Bokan property is

particularly enriched with heavy rare earth

elements, including the critical elements

dysprosium, terbium and yttrium. Approximately

40% (by weight) of the rare earth elements

contained on the Dotson Ridge property are

heavy rare earth elements.

In January when Ucore announced the filing of

the NI 43-101 Technical Report Preliminary

Economic Assessment on the Bokan Mountain

Rare Earth Element Project, near Ketchikan,

Alaska” on SEDAR, Jim McKenzie, President &

CEO of Ucore commented: “The report includes

an analysis of proposed mining methodologies,

mineral processing from mine mouth to market,

prospective planning and production timelines,

as well as anticipated capital and operating

costs, and expected IRR for the project.

Remarkably, the PEA supports a very straight-

forward mine development plan in combination

with a near term production horizon at Bokan.

What’s more, this affordable, high-return facility

will generate product that the US critically

requires. Every so often, a low cost, right-size

facility with a resilient high demand product

presents itself in the mining sector. Bokan is

such a facility.”

“Beyond representing an important milestone

in the development of the Bokan property, this

PEA opens the possibility of a complete

downstream rare earth industry in Alaska,” said

Ken Collison, Chief Operating Officer.

Ucore has multiple projects across North

America, but the primary focus is the 100%

owned Bokan – Dotson Ridge REE property,

which is located on Prince of Wales Island, some

60 km southwest of Ketchikan, Alaska and 140

km northwest of Prince Rupert, British

Columbia. It has direct ocean access to the

western seaboard and the Pacific Rim, a

significant advantage in developing near term

production facilities and limiting the capital

costs associated with mine construction. The

project is situated in the Tongass National

Forest, within an area set aside for natural

resource development.

Highlights of the PEA Include:

■ NPV: $577 million at a 10% discount rate, pre-

tax

■ IRR: 43%

■ Payback period: 2.3 years

■ Capital cost: $221 million, including a

complete on-site rare earth oxide (REO)

separation plant, and a contingency provision

in the amount of $25 million. Among the

lowest capital outlays in the rare earth mining

sector

■ Total revenue: estimated at $2,546 million

■ Mining rate: 1,500 t/d, 75% of mill feed is

eliminated via the use of Dual Energy X-Ray

Transmission (DEXRT) sorting and magnetic

separation, netting approximately 375 t/d to

feed the leach circuit

■ Average total rare earth recoveries: 81.6%

■ Production of REOs at site: deployment of

Solid Phase Extraction (SPE) technology to

generate high purity individual rare earth

oxides at the site

■ REO production: averaging 2,250 t/y during

the first five years at full production,

including 95 t of dysprosium oxide, 14 t of

terbium oxide, and 515 t of yttrium oxide

■ Mine Life: 11 years, based on existing Inferred

Mineral Resource estimate (April 21, 2011),

excluding highly prospective expansion at

depth, along strike, and other exploration

targets at the I&L Zone and beyond

■ Ease of shipping access: Only rare earth

project with immediate deep water shipping

facilities, “resulting in prospective mine-

mouth shipping rates among the lowest in

the industry,” Ucore says

■ Elimination of tailings on surface at closure:

“Only known mine to eliminate tailings on

surface at closure,” Ucore claims. All tailings

will be placed underground via cemented

paste backfill. The processing plant will

generate approximately 735 t/d of tailings,

significantly less than the mine requirement

of approximately 1,030 t/d backfill

■ Recycling of nitric acid: nitric acid that is not

12 International Mining | MARCH 2013

PROJECT FOCUS

Bokan rare earths

This Alaska project plans to usesome unique technologies, is

among the lowest capitalexpenditure (capex) of the world’s

current rare earth projects andhas US DOD backing

Float plane with BokanMountain in thebackground

DEXRT ore sorting

consumed in the leach circuit

will be recycled through the

use of diffusion dialysis,

greatly reducing acid

consumption by more than

75%, resulting in significant

financial and environmental

benefits

■ Near term, high value

production: relative high

percentage of rare earth

metals strategically critical to

the defence, clean energy,

aerospace, supercomputing

and transportation sectors:

including Tb, Dy and Y

■ Excellent geopolitical

support: offset of completion

risk through strong legislative

and financial support at state

and federal levels.

McKenzie explained: “Bokan’s unique

features have generated a capex that is among

the absolute lowest in the industry, remarkably

including full downstream separation facilities

that promise to render high purity oxides both

economically and on-site. In turn, the Bokan PEA

has delivered highly robust IRR and NPV

calculations. Beyond all of this, the Bokan

facility will have little in the way of direct

domestic competition. The facility will generate

critical technology metals that are indispensable

and increasingly difficult to obtain.

The PEA has been completed based on the

Aurora Geosciences’ Inferred Resource Estimate

Technical Report filed on April 21, 2011 by Ucore,

with the exclusion of the I&L Zone. The resource

incorporated into the current mine plan totals

5.3 Mt, with an average grade of 0.65% total

rare earth oxides (TREO), at a cutoff grade of

0.4% TREO. Of the TREO, approximately 40%

are comprised of heavy rare earth oxides.

The Dotson Ridge deposit is a well delineated

REE mineralised vein-dike system related to the

Mesozoic Bokan peralkaline granitic complex.

The mineralised system is a tabular body

exposed at the surface for a strike length of 3.5

km. The deposit was drilled to a depth of 450 m,

and remains open both along strike and at

depth. The system crops out along the ridge so

that it is readily accessible for drilling and bulk

sampling. The REE-bearing veins can be visually

identified from the surrounding host rock and

the material is amenable to Dual Energy X-Ray

Transmission (DEXRT) sorting. An existing road

network provides access to all main target

areas. There are a number of other occurrences

of REE mineralisation located within, or at the

margins of the Bokan complex which remain

highly prospective exploration targets.

Mining and beneficiationThe underground mine design was completed by

Stantec and contemplates trackless mining with

adit access and blasthole stoping with paste

backfill as the preferred mining method for the

project. This mining approach will result in a

production rate of 1,500 t/d, at a 0.4% TREO

cutoff grade.

The mine plan proposes the use of mill

tailings as cemented paste backfill to fill the

mined out areas of the underground workings.

At full production, the mill will produce some

735 t/d of tailings and the mine will require

1,030 t/d of backfill. This will result in all tailings

being placed underground as backfill, thereby

eliminating the need for a tailings facility at

surface upon mine closure. Waste rock will be

used for the remainder of the backfill.

The proposed processing flowsheet consists

of three areas: physical beneficiation, leaching

and downstream REO separation.

The mine’s 1,500 t/d of mineralised material

will be crushed and split into four size ranges.

The fines will by-pass the sorters and each of

the other size ranges will feed one of three

sorters using DEXRT. This circuit will reject

approximately 50% of the feed as waste. The

concentrate produced will then be further

crushed and ground in a rod mill. The resultant

material will be processed by magnetic

separators, which will reject a further 50% of

their feed as waste.

In total, approximately 75% of non-REE

bearing material will be discarded through the

physical beneficiation process. The remaining

375 t/d of concentrated mineralised material is

further ground to -40 μm and then fed to the

leaching circuit.

The physical beneficiation

circuit results in significant

savings initial capital

expenditure and ongoing

operating costs, due to reduced

power and acid consumption

during the leaching and

separation process.

The leaching circuit consists

of a nitric acid leach process.

The concentrated material is

leached using nitric acid heated

to 90°C. The resultant slurry is

filtered, with solids then

submitted to the backfill plant

to be placed underground as

cemented paste backfill. Prior

to the pregnant solution

continuing on to the separation

circuit it is treated by diffusion

dialysis in order to recover the

unconsumed nitric acid. The recovered acid is

then recycled into the leach circuit, resulting in

significant operating cost savings.

REO separation circuitThe separation of individual REOs is achieved

through the use of Solid Phase Extraction (SPE),

a technology developed by IntelliMet of

Montana, in conjunction with Ucore. The

pregnant leach solution generated by the nitric

acid leach is introduced into a series of purpose-

built SPE columns. The first stage of this process

removes nuisance materials such as thorium,

uranium, and iron from the solution. A

subsequent series of columns then separates

the rare earths into the following lanthanide

sub-classes, Ce-La; Pr-Nd; Y; Sm-Eu-Gd; Tb-Dy;

and Ho-Er-Tm-Yb-Lu. The final circuit of columns

then separates the subclasses into individual

rare earth chlorides, which can then be

precipitated to generate individual purified rare

earth oxides.

The SPE process produces chemical transfers

of selective elements from the pregnant solution

to a solid phase within a matter of seconds,

giving the columns the capacity to process a

large volume of solution in relatively small flow-

through extraction units. The result is a

relatively low initial capital cost for the SPE

circuits. Waste products from the separation

process will be returned underground as part of

the cemented backfill.

IntelliMet’s core technology is a resin material

that has greatly enhanced properties for metal

recovery compared with conventional resin or

carbon columns. The company says it believes

“the technology revolution enabled by the

‘Spiderweb’ media will create a paradigm shift in

metal recovery and hydrometallurgy technology.”

The Spiderweb media contains a tight packed

14 International Mining | MARCH 2013

PROJECT FOCUS

Drill platform at Dotson Shear

bed of beads, like a resin column, but instead of

putting the binding groups inside the beads,

IntelliMet places the binding groups on polymer

strung between the beads, that catches metals

passing through the bed like flies passing

through a spider web. Because the Spiderweb

has immediate contact with the metal solution,

time is not required for the metals to diffuse into

the bead, so binding and recovery are nearly

instantaneous.

Because of the rapid exchange properties of

the Spiderweb, metal recoveries are near

quantitative, metal separation/purity is high,

and contaminants can be removed to non-detect

with one pass through the column. The

expertise of the IntelliMet team in

inorganic/metal binding chemistry enables the

development of specialty binding groups to

solve the particular separation challenges of a

given metal stream.

It was October last year that Ucore reported

the results of laboratory experiments which

successfully separated the critical metals:

dysprosium (Dy), neodymium (Nd) and erbium

(Er) from the other REEs in a mixed concentrate.

The work was performed by IntelliMet on

composite solutions designed specifically to

replicate the contents of the ore from Bokan

Mountain. These metallurgy findings were

significant, since Dy and Nd are now listed as

among the most critically important strategic

metals to the US, as determined by the US

Department of Energy and US Department of

Defense.

McKenzie explained then that “the isolation

of a chemical form of dysprosium from a US-

based deposit has been a ‘holy grail’ of sorts in

the domestic rare earth industry. Now that

dysprosium has been liberated at laboratory

scale, our intent is to pursue this breakthrough

at a pilot plant level in conjunction with the

company’s arrangement with the US Department

of Defense (Defense Logistics Agency (DLA)).

“Ucore has taken a significant leap toward

not just producing a mixed REE concentrate, but

also towards separating and refining high purity

individual CREOs, or Critical Rare Earth Oxides,

on US soil utilising innovative US technology.

We’d like to express our thanks to Ucore

Advisory Board member, Dr Richard Hammen,

for his exceptional work in Solid Phase

Extraction (SPE) technology. SPE is a uniquely

American technology which combines rare earth

extraction from process leach solutions with a

separation regime that utilises innovative

polymer nanotechnology.”

At that time, Hammen made a presentation to

the 51st Annual Conference of Metallurgists

(ACOM) of the Canadian Institute of Mining in

Niagara Falls, Ontario, entitled: The state of the

art in separating and purifying the heavy rare

earths: solvent exchange, ion exchange, and

solid phase extraction, which is the optimal process?

It can be accessed through the following link:

http://ucore.com/DrHammen2012.pdf

Hammen, the inventor of the successful SPE

process to separate and purifying REEs,

presented the application of the technology to

the separation and purification of REE in liquid

solutions. He discussed the results using SPE

columns specifically developed to improve the

speed and expected economy, compared to

existing SX technology, of REE separation and

purification.

Hammen discusses six chemical separation

tools for REE purification. The first is to displace

light by heavies (e.g. La displaced by Nd and

heavier), then displace heavy elements by light

elements. In the third stage, load, then rinse out

heavy>light (e.g. Nd>Pr), followed by the fourth

stage of load, then elute light>heavy with well

know pH gradients. Then increase separation

with a second “amplifier” column in series and

finally use the ionic charge of REE to get large

separation factors (Ce+4, Eu+2).

Initial capital costs include all costs required

to bring the facility to production. The ongoing

sustaining capital costs are estimated to be

$145 million over the 11 year mine life.

16 International Mining | MARCH 2013

PROJECT FOCUS

Performing tests on samples

The IntelliMet Spiderweb

Mixed REE

Solution

Column Set 1

Rough Subclass

Separation

Oxidize And Recover CeO2 ppt

Column Set 2 Lanthanum/

Cerium Separation

Ce2O3 Product

La2O3

Product

La/Ce

Steam

Column Set 3

Didymium

Purification

Crude

Pr/Nd

Stream

Crude

SEG+Heavy

Stream

Column Set 5

SEG +

Heavy Purification

Pure

Pr/Nd

Column Set 4

Pr/Nd

Separation

Pr2O3 Product

Nd2O3 Product

Pure

SEG+

Heavy

Stream Column Set 6

SEG/Heavy

Split

Sm+

Eu+Gd Column Set 7

Sm/Eu/Gd Separation

Sm2O3 Product

Eu2O3 Product

Gd2O3 Product Column Set 8

Heavy/Ultraheavy Separation

Ultraheavy Mix

Column Set 9

Dy/Tb Separation

Tb2O3

Dy2O3

IntelliMet overall REE separation scheme

Ucore is currently conducting environmental

baseline studies to prepare for the forthcoming

permitting process at the Dotson Ridge project.

The project plan is being developed in

consultation with local stakeholders as well as

state and federal regulators. A Plan of

Operations, which will be based upon

engineered facility designs advanced from the

concepts presented in the PEA, will be

submitted to the US Forest Service (USFS) to

initiate a National Environmental Policy Act

(NEPA) review. Permitting advantages for the

project include the elimination of a permanent

surface tailings storage facility, due to the use of

x-ray sorting technology, which will allow for

100% of the mill tailings to be placed in mined

out areas underground as cemented paste

backfill. The study includes cost estimates for

site water management and treatment.

Defence contractThe US Department of Defense (DOD) has

contracted with Ucore via its US operating

subsidiary Landmark Alaska to conduct a

mineralogical and metallurgical study on Bokan.

The program, to be managed by DOD under the

Defense Logistics Agency (DLA) will focus on

possible development of Bokan Mountain to

meet the requirements of the DOD for an

ongoing supply of critical heavy REEs. Ucore is

providing DOD with the most up-to-date data on

the Bokan project’s mineralogy and proprietary

bench and pilot scale SPE nanotechnology

research.

DOD considers yttrium, terbium, and

dysprosium to be “critical to the production,

sustainment, or operation of significant US

military equipment,” as well as “subject to

interruption of supply, based on actions or

events outside the control of the government of

the US.” Yttrium, in particular, was shown to be

in deficit when considering projected future

domestic supply.

Bokan Mountain is the richest known

domestic source of dysprosium, terbium, and

yttrium. They are critical to several advanced

weapon systems, such as stealth helicopters

and precision-guided weapons.

McKenzie said at the time that “the

Department of Defense’s investment in the

Bokan deposit and Ucore’s proprietary SPE

technology represents a significant step toward

recapturing the rare earths technological lead

surrendered to China decades ago. What’s more,

the DOD relationship adds a great deal of

credibility to Ucore’s domestic supply chain

development, representing one of the largest

purchasing capabilities amongst prospective

customers worldwide.” IM

MARCH 2013 | International Mining 19

PROJECT FOCUS

Item Total cost (million $US)

Direct capital cost

Site development 6.1

Mine underground 18.9

Mine surface facilities 23.8

Process 62.9

Tailings and waste rock management 10.1

Utilities 3.4

Buildings 3.0

Temporary facilities 5.2

Plant mobile equipment & misc. 1.4

Subtotal 134.7

Indirect capital cost

Indirect construction costs 51.1

Owner’s costs 10.9

Contingency 24.5

Subtotal 86.5

Total capital cost 221.3

Capital cost estimate

Operating cost estimate

Item Average unit cost

Mining 41.69 $/t mined

Processing 54.83 $/t mined

G&A 13.56 $/t mined

Power 11.78 $/t mined

Miscellaneous 0.93 $/t mined

Total operating cost 122.78 $/t mined

dsi