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BioLantanidos 

  • Acquisition of BioLantanidos Ionic Clay Rare Earth deposit in Chile for $56 million
  • These deposits are lowest cost sources of rare earths
  • Special concentration of high demand rare earth elements
  • Simple, low cost, no explosives
  • Environmentally friendly process with no tailings dam
  • Low capex, modular processing facility
  • Significant upside potential
  • Low risk and proven mining jurisdiction

 

NEXT STEPS

  • Advancing project to revised feasibility in 18 months
  • Separate local management team appointed

 

On 2 October 2019, Hochschild announced the acquisition 93.8% of the Biolantanidos rare earths deposit in Chile that it did not already own for a consideration of $56.4 million and therefore consolidated 100% of the project. Biolantanidos was previously controlled by the private fund FIP Lantanidos, managed by private equity firm Mineria Activa SpA. Hochschild initially invested $2.5 million in the project during 2018 and early 2019 in exchange for a 6.2% equity stake with an option to increase ownership.

The deposit has a high concentration of key rare earth minerals and in particular those with permanent magnetic properties such as Terbium, Dysprosium, Praseodymium and Neodymium. These metals offer highly attractive enhancement properties for a wide range of end-use applications and play a pivotal role in driving the efficiency of motors, particularly in electric vehicles and wind turbines.

The project consists of ionic clay resources, similar to those found in China, but very different from most other hard rock-based rare earth projects worldwide. Mineralisation occurs from the surface to 20-30 metres deep and mining will not require explosives. The clay undergoes a simple washing process in which rare earths will be desorbed into a solution, concentrated and calcined to obtain a rare earth oxide. Furthermore, there is no requirement for a tailings dam as the washed clay is expected to be returned to the open pits. The process is environmentally friendly as it does not require potentially harmful chemicals whilst capital and operational expenditure is projected to be low with the result that the project is expected to be one of the lowest cost rare earth producers.

An initial modular project has been developed in the Penco area in an area of 500 hectares, approximately 15km from Concepción in Chile and with excellent access to infrastructure and energy. Other modules are expected to be evaluated in the future, providing significant low capital expenditure growth potential.

Prior to the acquisition, Biolantanidos constructed an on-site pilot plant that has demonstrated both technical and commercial viability, and the opportunity to scale up into industrial operations. Although the company prepared a feasibility study, it is Hochschild’s intention to revise the study over the next 14 months and has recently appointed a dedicated management team to oversee development of the project.