Image courtesy of Great Western Minerals Group

Headgear and Winder House at Steenkampskraal.

Great Western Minerals Group (TSXV:GWG) said last week that it successfully tested its mini pilot plant and produced carbonate from material mined from its Steenkampskraal rare earths project in South Africa. 

The Canadian company said the mixed rare earth carbonate will be used to further characterize and evaluate the separation of rare earth elements from the mine located north of Capetown.

“This is a significant milestone for us,” Great Western president and CEO Marc LeVier said in a statement published last Wednesday. “We optimized the metallurgical process and successfully operated a pilot plant which produced a mixed rare earth carbonate product. We now have a process flow sheet that is being engineered in our ongoing SKK feasibility study. The study remains on track for completion around the end of the first quarter of 2014.”

The news follows a preliminary economic assessment that GWG completed last March, which showed 278,000 tonnes of inferred mineral resources at an average grade of 15.2 percent total rare earth oxides (TREO) and 176,000 tonnes of indicated mineral resources at an average grade of 18.2 percent TREO, each using a 1 percent TREO cut-off grade.

The company bills itself as an integrated rare earths producer, with downstream operations in the aerospace, automobile, computer and high-tech industries. Just under a year ago Great Western announced that its subsidiary, Less Common Metals (LCM), began commercial production with its first rare earth alloy strip casting. The firm is one of the few rare earth companies outside of China that is vertically integrated.

In an interview last year, LeVier told Rare Earth Investing News that “our integrated model doesn’t require us to be the largest-volume mine. Our margin opportunities come with being our own supplier, which should impact our input costs positively, as well as with being able to provide certainty of supply to our LCM customers.”

The market initially reacted well to Great Western’s announced carbonate production, with the stock nearly doubling from $.065 last Wednesday to $0.12 on Thursday. However, last Friday, shares in GWG slid 13.64 percent to close at $0.095. Still, the company is up 35.71 percent year to date.

 

Securities Disclosure: I, Andrew Topf, hold no direct investment interest in any company mentioned in this article.

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Building a “Mines to Markets Company”: Q&A with Great Western Minerals