EDITOR: | June 11th, 2013

Northern Minerals Ltd: Browns Range Project Development Update

| June 11, 2013 | No Comments
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June 11, 2013 — Australia (Source: Northern Minerals Ltd) — Northern Minerals (ASX: NTU) is pleased to provide an update on its Browns Range Heavy Rare Earth Project (the Project), following the completion of a number of important development milestones and on-going activities.

The Company has completed an extensive work program during the first half of 2013, which has delivered significant outcomes in process flow sheet development, the environmental and Native Title approval processes and drilling to support the release of an upgraded resource in October 2013.

Northern Minerals Managing Director George Bauk said the developments kept the Company on its project schedule which would deliver first production at Browns Range in 2016.

“All of these elements will make important contributions to the ultimate development of Browns Range as a strategic new supplier of high value Heavy Rare Earth (HRE) oxides to global markets,“ Mr Bauk said.

Pathway to Production

Pathway to Production

“Many of the components of the Browns Range Scoping Study are nearing completion, and the results thus far have been very satisfying pleasing and validate our planned work program.”

“However in light of the decision to include the hydrometallurgical process into the flow sheet and the planned resource upgrade expected in October, we have decided to incorporate these important parameters into the Scoping Study which will delay its release until the fourth quarter. This will not impact on the current development timeline and we believe will underpin a more robust, longer life project.”

“We look forward to providing updates to our shareholders at the investor meetings scheduled at major Australian capital cities later this month, details of which can be found on our website,” Mr Bauk said.

Metallurgical Test Work and Flowsheet Development

One of the key competitive advantages of the Project is the ability to substantially upgrade the rare earth content of the mineralised feed material to a mineral concentrate form by using conventional physical separation methods. This high grade concentrate can then be hydrometallurgically treated to produce a high purity, high value mixed rare earth oxide (REO).

Northern Minerals has been optimising the proposed flowsheet to deliver the most efficient and cost effective process and design. Testwork to optimise the beneficiation process has identified two preferred routes; whole of ore flotation, and a combination of wet high gradient magnetic separation (WHGMS) followed by flotation cleaning. The following results indicate the progress to date in optimising these two process routes:

  • Whole of ore single rougher flotation test work has produced a 19% Total Rare Earth Oxide (TREO) concentrate with recovery of 79% from a 0.78% TREO head grade.
  • WHGMS rougher/scavenger testwork has produced a 5.6% TREO magnetic concentrate with 87% recovery from 0.85% TREO head grade material. Flotation cleaning then upgraded this magnetic concentrate to produce a 20% TREO concentrate with an overall circuit recovery of 82%.
Beneficiation flowsheet

Beneficiation flowsheet

The other key result from the testwork is the confirmation that circa 96% of the feed mass to the beneficiation plant can be rejected to tailings and only 4% of the feed mass will report as mineral concentrate. This means a very low feed mass to the hydrometallurgical process plant which translates to a smaller facility with lower capital and operating costs.

Further test work is currently underway to determine which route is optimal for recovery and mineral concentrate grade. This information will then be integrated with operating and capital cost data in the Pre-feasibility Study to determine the most efficient and cost effective process and design of the beneficiation stage of the Project.

The Company has also completed processing a sample of just over one tonne of ore from the Wolverine deposit through a mini-pilot plant. The circuit processed the ore at a nominal rate of 50kg/hr, using a rod mill to grind down to 106μm which was followed by the rougher flotation. The goal of the pilot plant was to produce about 18kg of 20% TREO mineral concentrate to advance the hydrometallurgical testwork and to provide the opportunity to understand the flotation behaviour of the mineralised feed material on a larger scale.

Larger scale beneficiation pilot plant runs are planned for later in 2013 to generate additional mineral concentrate for the hydrometallurgical process pilot plant test work.

In the first quarter of 2013, Northern Minerals announced that hydrometallurgical confirmation testwork by Nagrom and ALS had confirmed the ability to produce a high purity mixed REO containing more than 92% TREO. Key results from this work included:

  • Extraction efficiency in the acid bake and water leach step exceeded 85%.
  • The precipitation efficiency of the oxalate precipitation step exceeded 99%.
  • The purity of the final calcined product exceeded the target of 92% TREO in mixed REO.

The Company is now working on optimising each step of the hydrometallurgical process, with the sulphation bake, water leach and oxalate precipitation steps completed. Test work has commenced on the purification step including initial screening tests of six ion exchange (IX) resins with two preferred resins selected for further testwork.

The 18kg mineral concentrate sample produced form the mini-pilot will be used for the next stage of the hydrometallurgical testwork program which will be a continuous run of the flowsheet at laboratory scale. This will then be followed by a mini-pilot plant run and then the final stage of a full pilot plant run.

Hydrometallurgical Plant Location Study

In early 2013, the Company completed a location study for the hydrometallurgical plant. The study evaluated a number of key project drivers including; environmental and
social factors, capital and operating costs as well as project development and operational risks.

The study considered nine locations, eight in WA and one in the NT, with potential off-shore locations being discounted due to geo-political risk. The study concluded that a Browns Range site-based plant would be optimal. The selection of the hydrometallurgical plant site represents an important milestone for the Project as it permits the project team to focus on a single, clear pathway as it continues the development of the project.

Environmental Studies and Approvals

Northern Minerals has commenced the environmental assessment and approval process with submission of the project Referral to the WA Environmental Protection Authority (EPA) and the level of assessment for the Project was set by the EPA as an Assessment on Proponent Information (API). This level of assessment is set for projects that have consulted extensively and appropriately with stakeholders and which raise a limited number of key environmental factors that can be readily managed. The setting of an API further supports the Project’s pathway to production by providing a more defined timeline for the environmental assessment and approval process.

The Company is continuing its environmental study program, with further baseline surveys completed this year, including; subterranean and invertebrate fauna, flora and vegetation and background radiation. This follow up Stage 2 flora and vegetation survey was completed in May, with Jaru Traditional Owners accompanying the botanical consultants during the field survey.

Work on soils studies and atmospheric emissions has also commenced, with initial results likely to be received in the next quarter. A comprehensive groundwater monitoring program commenced in May.

Stakeholder Engagement

During the past few months an extensive stakeholder engagement program has been completed, including a number of additional stakeholders from the Western Australian, Northern Territory and Federal Governments. The consultation programs also included a series of community forums held in Halls Creek, Ringer Soak and Wyndham during May. On the whole, the forums were positive with many community members expressing interest in employment, training and business opportunities. A second stage of community consultation is planned for later in the year, when the Project is more defined to provide further information on Project specifics.

The Company is also pleased to advise it has commenced initial agreement discussions with the Jaru Native Title claimant group. The Company looks forward to continuing and advancing these discussions.

Drilling/Resource Upgrade

Northern Minerals currently has a targeted 20,000m RC and diamond drilling program underway at Browns Range for the 2013 season. The program is specifically targeting a resource extension at the Wolverine deposit, as well as new resources at Gambit Central, Gambit West and Area 5.

Results from the drilling program released this week will contribute to a resource upgrade expected in October. The Company’s target is to more than double its current resource inventory to between 22,000 tonnes and 29,000 tonnes TREO*, which would significantly increase the initial mine life of the start-up operation.

* The potential quantity of TREO targeted at the Wolverine, Gambit Central, Gambit West and Area 5 Prospects is based on existing drill results from 2011,2012 and 2013, but is still conceptual in nature. There

has been insufficient exploration at Gambit Central, Gambit West and Area 5 to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource at these prospects.

Scoping Study

Work is well advanced on the Browns Range Scoping Study, with encouraging individual components based on the modelling to date. During recent months, the Company has adjusted the parameters of the study, in particular, to incorporate the recent positive developments with the hydrometallurgical testwork. The Scoping Study will now include the hydrometallurgical process to produce a mixed rare earth oxide (rather than a mineral concentrate), which will add significant value to the end product and enhance the project economics.

With the significant drilling program underway which has delivered positive early results, Northern Minerals is also expecting to release an updated JORC compliant resource estimate for the Project in October. The Company will incorporate the updated resource into the Scoping Study, which will postpone its release until the final quarter of 2013.

In addition, scoping level mining studies have been completed by AMC Consultants on the current Wolverine resource as reported in December 2012. A number of scenarios were considered including two production rates, as well as open pit only and a combination of open pit and underground.

The study concluded that the combination of an optimal open pit with a small underground decline, developed from the floor of the open pit, to extract the balance of the remaining mineralised material is the superior scenario. Open pit mining is the lowest cost to around 200m below surface after which it appears that underground mining becomes the most economical.

The figure below shows the extent of the open pit with the underground decline development at Wolverine.

Wolverine mine concept

Wolverine mine concept

Competent Persons Declaration

The information in this report accurately reflects information prepared by competent persons (as defined by the Australasian Code for Reporting of Mineral Resources and Ore Reserves). It is compiled by Mr R Wilson, an employee of the Company who is a Member of The Australasian Institute of Mining and Metallurgy with the requisite experience in the field of activity in which he is reporting. Mr Wilson has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Wilson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Northern Minerals:

Northern Minerals Limited (ASX: NTU) is focused on development of rare earth elements (REE), with a large and prospective landholding in Western Australia and the Northern Territory. The Company’s flagship project is Browns Range, where it has a number of prospects with high value HRE in xenotime mineralisation. In particular, the mineralisation includes high levels of dysprosium and yttrium, which are in short supply globally and expected to be increasingly sought after as world economies stabilise and recent trends in urbanisation and technology diffusion, particularly in Asia, accelerate. Following outstanding results from its drilling and metallurgical programs in 2012, the Company has delivered its maiden JORC resource, advancing Browns Range toward production, using a relatively simple and low cost processing flowsheet to produce a high grade mixed Rare Earth oxide. Northern Minerals also has a HRE exploration program underway at the geologically similar John Galt project. For more information, visit www.northernminerals.com.au

130611 Revised Browns Range Project Development Update including Competent Persons FINAL_Page_1_Image_0003


Raj Shah

Editor:

Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>


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