Favourable momentum continued to send Rare Earth Minerals (REM) higher on Tuesday after its joint venture (JV) partner in Mexico announced high recoveries of lithium carbonate, although predictions of a takeover proved a damp squib.
Shares in Rare Earth were up as much as 15% in early trading before falling back down to sit 9% up by 10:00am.
This followed a large hike on Monday after Rare Earth told investors its Canadian-listed JV partner Bacanora Minerals had requested trading in its shares be suspended pending major news.
Rare Earth has a 31.5% economic interest in the Fleur-El Sauz sections of the Sonora Lithium Project – 30% is a direct interest through the JV and the remainder comes from its 2.2% direct shareholding in Bacanora, which it plumped up just last week.
Bacanora owns 100% of the La Ventana and San Gabriel concessions and owns the remaining 70% of the Fleur-El Sauz sections.
The Canadian firm suspended its trading on the stock exchange at 8:00am Eastern Time on Monday. This caused a furore of speculation from Rare Earth shareholders who hoped a takeover by Bacanora was imminent.
Instead, Bacanora reported preliminary metallurgical testing results of up to 90.4% of lithium carbonate from the initial independent test work on its La Ventana section.
The testing was conducted on four samples averaging 9.88 kilograms each, with two samples from each of the upper and lower clay units.
Bacanora said solubility tests indicated 86.7% of lithium in the upper clay and 88.6% in the lower clay.
Meanwhile precipitation tests returned between 77.8% and 84.5% of lithium carbonate in the upper clay and between 82.2% and 90.4% of lithium carbonate in the lower clay.
The Metallurgical Division of Inspectorate Exploration and Mining Services was responsible for the testing and has recommended further testing to optimise reagent ratios, per cent of solids in leach pulps and leach time with the objective of increasing the lithium recoveries and increasing the lithium carbonate purity to 99.5% (battery grade).
David Lenigas, chairman of Rare Earth Minerals, said: “The metallurgical recoveries announced by Bacanora are potentially economically significant to REM and this bench scale work shows categorically that lithium can be extracted from this large Lithium Clay deposit.”
Rare Earth added that metallurgical test work had begun on samples from the southern extension of the La Ventana deposit on the Fleur-El Sauz concessions that form part of the Bacanora/Rare Earth JV lands.
Inferred resources have already been declared for the El Sauz and Fleur concessions totalling 88.2 million tonnes averaging 3,163 parts per million lithium.
Investor view
The climb in Rare Earth’s shares took them over 1p, which many users on the Interactive Investor discussion board were excited by.
Meanwhile, others pointed out Bacanora had closed 83% up in Monday trading across the pond.
