Northern to test Browns Range

Local explorer Northern Minerals plans to build a test pilot plant at its Browns Range project near Halls Creek at a cost of about $US18 million ($A25 million), rather than proceeding with full-scale development in light of the depressed rare earths market.

In a statement today, Northern revealed a three-stage business plan to bring its flagship Browns Range rare earths project into production, with the first stage being the development of a test pilot plant with a 60,000 tonne per annum capacity.

Northern said the proposed development of the project into three stages was in response to the current rare earth market, with prices the lowest in years.

“This new staged approach allows Northern to test the project and market, develop the project to a bankable feasibility study level, and then build the full scale production,” Northern said.

The company is in talks with potential offtake partners and investors to fund construction of the pilot plant, which is estimated at $US18 million.

“This capital estimate is based on all new equipment and Northern expects to significantly improve on this as detailed design and costing is completed,” it said.

“The three-year operation will consist of an open pit mining campaign over five months from relatively shallow pits at the Wolverine, Gambit West, Gambit Central and Gambit East deposits.”

Managing director George Bauk said the staged approach was prudent in the current testing economic and commodity market.

“During the development of this plan Northern has been working closely with potential offtake partners to assess whether short term production from the pilot plant, followed by longer-term production of a premium product from a full scale operation would be acceptable in the market,” he said.

“The response has been extremely encouraging, with Northern confident that this new approach will result in it realising its vision to become the first significant dysprosium producer outside of China.”

Mr Bauk said de-risking the project technically was one of the advantages in building the pilot plant.

“The pilot plant also provides a number of other advantages by allowing us to penetrate the market with our own product and gain valuable market knowledge and experience, while at the same time building our reputation as a new reliable source of dysprosium,” he said.

“In particular the pilot plant is a better option in current markets as it requires less capital, provides less risk and will be delivered in shorter timeframes.”

Browns Range’s current mineral resource supports an 11-year mine life with scope for expansion through exploration.

Northern recently made a number of redundancies at its head office and at Browns Range, while remaining staff contracts were reset with a 20 per cent cut.

Mr Bauk’s salary was also slashed in half, to $202,575 per annum.

Northern shares closed 1.5 per cent lower to 6.5 cents each.