Symbol – TSX-V: RUU
March 23, 2011
In March, 2010, Stans Energy Corp. (TSX-V: RUU) (‘Stans’ or the ‘Company’) retained Kazakhstan Mineral Company (KMC) to prepare an independent Technical Report including an Australian Joint Ore Reserves Committee (JORC) compliant Mineral Resource estimate for the rare earth oxides (REOs) remaining below the Kutessay II open pit mine, Kemin District, Kyrgyzstan.
Technical Report Results Summary
The 151 page Technical Report, to be listed on www.sedar.com, was completed by conducting an underground channel sampling program (see December 14, 2010 press release) which confirmed the accuracy of historical sample data, comprising of 5,552 channel and core samples, each measuring 1.5 m in length. The report was authored by the Qualified Person Vladimir V. Danilov, a member of the Australian Institute of Geoscientists. The JORC compliant estimate reports a combined Measured and Indicated Mineral Resource of 42,980 metric tonnes (mt) RE2O3, at an average grade of 0.264%, plus an additional Inferred Mineral Resource of 3,560 mt RE2O3, at an average grade of 0.204%. The resource remains open to depth below previously explored levels. The Mineral Resource Estimate does not include stockpiled mineralized material from historic mining operations. The Kutessay II Mineral Resources are summarized in the following table:
|Volume||Metric tonnes||Grade ΣTRE2O3||Contained
|1000 m3||1000 mt||%||mt|
|455.1||1,258||0.387||4,870||Measured + Indicated|
|5556.0||15,007||0.254||38,110||Measured + Indicated|
|Total Northern plus Central Deposits|
|6,011.1||16,265||0.264||42,980||Total Measured + Indicated|
Historically, Kutessay II also produced lead, molybdenum, silver and bismuth; however, there was no reliable historical data to quantify the remaining resources of these elements in the deposit under the rules of JORC. Representative metallurgical testing will help to determine the potential for these additional byproducts.
REO Grade and Tonnage Across Elevations
Measured and Indicated Resource tonnage and grade vary at different elevations, from the lowest pit walls to below the lowest exploration adit. The following table gives the estimate of the total Measured and Indicated RE2O3 Mineral Resource for each 10 metres (m) in elevation.
|Level, m||ΣRE2O3, %||ΣRE2O3, mt|
REO tonnage and grade estimates vary across host rock types. The majority of REOs are found in quartz-chlorite metasomatites and quartz-sericite metasomatites, with the highest grade REOs found in biotite hornfels. A summary of the rock types hosting rare earth mineralization follows:
|Volume||Metric tonnes||Grade ΣRE2O3||Contained ΣRE2O3||Resource Classification|
|1000 m3||1,000 t||%||t|
|Schist and gneiss not included below|
|638.2||1,710.3||0.170||2,914.7||Measured + Indicated|
|2,291.5||1209.0||0.330||20,888.0||Measured + Indicated|
|1,845.2||4,963.5||0.217||10,749.3||Measured + Indicated|
|230.3||621.9||0.148||917.2||Measured + Indicated|
|549.3||1,472.6||0.245||3,601.1||Measured + Indicated|
|70.0||185||0.165||306.8||Measured + Indicated|
|318.5||894.0||0.3||2,787.4||Measured + Indicated|
|69.0||207||0.423||875||Measured + Indicated|
Historical Rare Earth Element Breakdown
The historical data used to identify the breakdown of the 15 rare earth elements within the Kutessay II resource could not be verified under the rules of JORC, and therefore KMC has recommended that Stans conduct further work to confirm the accuracy of the historical data. In January, Stans hired the Academy of Sciences in Kyrgyzstan to determine an accurate estimate of the concentration of each rare earth element oxide in the estimated Mineral Resource.
Below is a table illustrating historical published percentages of each individual RE2O3 contained in the rock from the mined open pit in published in 1959, and within the deposit estimate published in 1992.
|Element||Symbol||Content, % of ΣRE2O3||Content, % of ΣRE2O3|
Note: Under the Soviet method of measuring the concentration, the low end of the range for each element was reported, and therefore the totals may not equal 100%.
Historic Soviet Mining and Processing Data
Below is a table summarizing the final five years of milling and processing at the Kutessay II RE mine. The historical mill operated at a capacity of 1000 mt of ore per day, 16 hours a day:
|Year||Quantity of ore processed, 1,000 t||Content in ore, %||Extraction, %||Content in concentrate, %||Content in tails, %|
Under the Soviet method of producing REOs from Kutessay II, the initial concentrates from the mill were further upgraded at the Kyrgyz Chemical Metallurgical Plant (KCMP) for final processing into oxides, metals, and alloys. Stans has begun creating a new mine design to process a much higher quantity than the 300,000 mt/annum previously processed. Metallurgical testing is ongoing to assess new technologies and methods for improving the historical concentration and recovery processes. New milling technologies have been tested at the lab scale under the supervision of Dr. Valery Kosynkin, with the final report expected in March, 2011. The Company intends to initiate a feasibility study for restarting rare earth production operations at Kutessay II, in cooperation with the same Russian institutes that originally designed and built the Kutessay II mine, mill and processing plants.
In its Kutessay II JORC Technical Report, KMC recommends the following steps be taken to advance the project:
Pre-Feasibility Evaluation Program
- Evaluate potential rare earth targets in the Aktyuz Ore Field, including the extension below Kutessay II, and other known occurrences and geophysical anomalies in the district;
- Complete review and consolidate database of all pertinent historic Russian language files and information related to the operation of Kutessay II rare earth production, including mining, milling and processing operations for the recovery and production of rare earth concentrates and/or products;
- Conduct program to better define the relative concentration of the individual rare earth elements in the Kutessay II deposit;
- Initiate a baseline environmental study to define the natural environment and the effects of historic mining and milling on the Kutessay II site;
- Conduct pilot scale metallurgical studies and investigations to develop a flow sheet for processing ore to produce concentrates of both Heavy Rare Earth Elements (HREEs) and Light Rare Earth Element (HREEs), as well as final rare earth concentrates and final products from the Kutessay II deposit;
- Test technologies to remove radioactivity from the Kutessay II mineralization to reduce environmental impacts of operations, and;
- Initiate an economic pre-feasibility study for the Kutessay II rare earth deposit. The pre- feasibility study should include open pit mining with milling, preparation of a concentrate and processing of the concentrate to produce final rare earth products.
A full industrial scale test and Feasibility Study should follow the initial evaluation work.
Rare Earth Market Discussion
The sole source of the world’s HREE production comes from the ‘Ionic Clays’ in the south of China. Representatives of the Chinese Society of Rare Earths have repeatedly stated that it is likely that the country will become a net importer of HREEs in the near future. Kutessay II is one of the only sources of HREEs located outside of China prior to 1991, when the mine shut down.
HREE prices have increased substantially in recent history, due to increasing demand, and supply constraints from China. The international prices for all 15 REEs have been very volatile, and no long term price can be accurately determined based on conventional methods of valuation. Below is a table illustrating the current international price per kilogram of each REO on March 21, 2011 in USD, based on FOB surveys.
Note: REOs have standard purities but specific purities often sell at higher prices. RE metals also demand higher prices than those shown above.
The United States Geological Survey has predicted that the most critical REOs in terms of future supply versus expected demand are Yttrium (Y), Dysprosium (Dy), Terbium (Tb), Neodymium (Nd), and Europium (Eu). Based on the historical breakdown of REOs contained within the Kutessay II deposit, these five elements are likely to represent the majority of Kutessay II’s value.
Yttrium is most widely used in phosphors for white and grey colours in LEDs, and in tri-chromatic fluorescent lighting. For its physical and chemical properties, Yttrium is regularly alloyed with chromium, molybdenum, zirconium, titanium, aluminum and magnesium. Yttrium is used as a deoxidizer for vanadium and other nonferrous metals, and as a catalyst in the polymerization of ethylene. It has medical applications in cancer treatment, arthritis and joint inflammation, in artificial joints, prosthetic devices, and needles. The element can also be found in optical and camera lenses, cubic zirconia jewelry, super conductor materials, high performance spark plugs, yttrium-stabilized zirconia, solid electrolytes, exhaust systems, catalytic converters, turbocharger components, and piston rings.
Dysprosium’s thermal neutron absorption cross-section and high melting point enables it to be used in nuclear control applications. The element can be added to Neodymium-iron-boron magnets to raise the strength and corrosion resistance of applications like drive motors for hybrid electric vehicles. Like Terbium, Dysprosium is a component of Terfenol-D; a very promising material for future technology applications. It is also used in CDs, chemical reaction testing, laser materials, and dosimeters
Neodymium is essential in the production of the world’s strongest super magnets, which are present in hybrid cars, state-of-the-art wind and tidal turbines, industrial motors, air conditioners, elevators, microphones, loudspeakers, computer hard drives, in-ear headphones, and guitar pick-ups. When combined with Terbium, or Dysprosium, a Neodymium magnet can withstand the highest temperatures of any magnet, allowing the element to be used to be used in electric cars. Neodymium has many additional uses. It is utilized in incandescent light bulbs, cathode ray tubes, as a glass filter and colourant, as a doping agent in Yttrium-Aluminum-Garnet lasers, and for glare-reduction in rear-view mirrors.
Terbium is used in colour TV tubes and fluorescent lamps as a green phosphor. In combination with Europium blue and red phosphors, the three create trichromatic fluorescent lighting, which is much brighter than conventional fluorescent lighting. Another green application for Terbium can be found in combination with neodymium for production of the world’s most heat resistant super magnets. The element is also used in alloys, crystal stabilizers in fuel cells that operate at high temperatures, specialty lasers, and to dope calcium fluoride, sodium borate and strontium molybdate materials. Terbium is a component of Terfenol-D, a material that is used in transducers, high-precision liquid fuel injectors and in a new form of audio equipment that has the potential to revolutionize the speaker industry.
Europium is used as a phosphor in all TVs and computer screens to create red and blue light, and when combined with green Terbium phosphors, trichromatic fluorescent lighting is created. Europium isotopes are the best known neutron absorbers and therefore the element is ideal for control rods in nuclear reactors. The element is also used in fluorescent light bulbs, alloys, as an agent in fluorescent glass, and to dope plastic and glass to make lasers.
The scientific and technical information in this document was prepared in accordance with the JORC Code 2004, with addenda as of May 2007, and is also in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and was reviewed, verified and compiled by Stans Energy Corp.’s geological and mining staff under the supervision of the company’s qualified person, Dr. Gennady Savchenko FGS, Managing Director, Stans Energy KG.
Please visit Stans Energy’s website – www.stansenergy.com for additional information, or contact:
President and CEO, Stans Energy Corp.
Ph. 647 426 1865
Manager Investor Relations, Stans Energy Corp
Ph. 647 426 1865