In October 2011, I took a short trip to Sweden, invited by Tasman Metals Ltd. (TSX.V:TSM, AMEX:TAS, F:T61) to join an analysts' tour of Norra Kärr, Tasman's flagship rare-earth-element (REE) project in Scandinavia.
First things first: the Swedes spell the name of this mineral occurrence as 'Norra Kärr', not 'Norra Karr'. This spelling renders the project's pronunciation as something similar to "Nora Shah", instead of "Nora Car". The things you learn on the way to learning other things...
Norra Kärr is located 10 miles northeast of the town of Gränna, which itself sits on the shores of the beautiful Lake Vättern, Sweden's second largest lake and found in the south central part of the country. The city of Jönköping and its 90,000 inhabitants are 30 miles to the southwest; Stockholm is around 200 miles away to the northeast. Norra Kärr is readily accessible from all parts of the country via the E4 highway that runs close to the deposit. And by close, I really do mean close; while standing in the middle of the deposit, we could hear the cars whizzing by on the highway. Clearly then, accessibility is a key positive for this mineral deposit, regardless of what might be present in the ground. Power and water are also available right at the site.
Having flown into Stockholm the night before, early the next morning the group piled into a couple of vans and cars, for the 3.5 hour drive to the project from the Swedish capital. I spent the journey in the company of Tasman's Chief Geologist Magnus Leijd, and Yasushi Watanabe, the well-known senior geologist with the Geological Survey of Japan, and who was also along for the visit. This was an excellent opportunity to listen to the two geologists talk about the project, and for me to pose a bunch of layman questions, which fortunately they were both only too happy to answer.
Along with Mr. Leijd, our Tasman hosts included Mark Saxon, President & CEO, Jim Powell, VP for Business Development and Henning Holmström, Project Development Manager.
Norra Kärr is the only rare-earth project in mainland Europe with an NI-43-101-compliant mineral-resource estimate. Per the most recent numbers at the time of writing, Norra Kärr contains an estimated 60.5 Mt of rare-earth mineral resources, at an average grade of 0.54%, resulting in an estimated 327 kt of rare-earth oxides (REOs) present. In addition to the production of rare earths, the project is of interest for zirconium (Zr), hafnium (Hf) and possibly niobium (Nb) as well. Oxides of europium (Eu) through to yttrium (Y) make up 53% of the total REOs (TREOs) present, thus Norra Kärr has one of the most attractive TREO distributions of any rare-earth project with a defined resource. Despite the relatively low overall TREO grade in the deposit, the actual in-situ grades of dysprosium (Dy) and Y, two of the critical REOs (CREOs), are some of the highest of any defined resource.
All of these factors, combined with very low concentrations of thorium (Th) and uranium (U) (7 ppm and 14 ppm respectively), mean that the deposit is of high potential strategic interest.
You can see photographs taken during the visit, in the galleries below (click on each image to enlarge it).
Mr. Leijd indicated that the main minerals of interest at Norra Kärr are eudialyte (85%) and catapleiite (10%), and other minerals that closely resemble them. The latter is a Zr silicate not unlike eudialyte. Norra Kärr probably has the largest occurrence of catapleiite currently known in the world. As an aside, he made the interesting comment that the more intense the characteristic pink color is in a eudialyte sample, the less rare earths it contains, with the mid-brown eudialyte being preferred. The host rock consists of feldspar, nepheline and pyroxene.
There are few exposed outcrops at Norra Kärr; much of the surface is covered by so-called glacial till. Mr. Leijd mentioned that since much of Sweden has been covered in ice in the recent geological past (10,000 years, which is recent to a geologist), there are very few weathered rocks in the country. While this doesn’t sound all that important, its significance was pointed out to me. The lack of weathering means that the rare-earth minerals are the same at surface as they are at depth in the Norra Kärr intrusion, and they haven’t been altered to new minerals by the effects of air, water and time. While Norra Kärr is not unique in this regard, this lack of mineral variation should simplify subsequent processing of the deposit.
During initial bench-scale metallurgical testing, the main rare-earth-containing minerals were all very soluble in sulphuric acid, with the catapleiite dissolving faster than the eudialyte. Early in the company's research, preliminary leach tests gave only a 50% rare-earth element (REE) yield. However, after analyzing the residues and mass balance of the metals, the folks at Tasman noticed that most of the remaining mineral was eudialyte, and were able to refine their processing to recover up to 90% REEs in solution. Since my site visit, Tasman has released the next round of metallurgical results, arising from their work at the laboratory of the Geological Survey of Finland. They appear to have made good progress, with a mineral-concentrate step and room-temperature leaching both giving good recoveries.
I asked Mr. Leijd about the presence of zircon in the deposit, since this mineral tends to be an impediment to processing at other projects, due to its refractory nature. He indicated that there were only very low amounts of zircon present, around 0.6% (compared to around 10% for some of the other well-known deposits). I asked how important it was to distinguish between different mineral types within the Zr silicate family, since there is a wide range of Zr silicate minerals known to date, some with pretty complex chemical formulae (I don't think I've ever seen the same formula for eudialyte, for example, ever used twice!) Mr. Leijd commented that from the metallurgical flow sheet point of view, the differences are only really important if they exhibit different processing characteristics. The mineral zircon, for example, is known to process very differently from the eudialyte present at Norra Kärr. This makes sense - the empirical results of testing are the driver here.
Mr. Leijd explained that the Norra Kärr mineral deposit has been known for quite some time. It was explored for its Zr content after the Second World War, and indeed at the entrance to the deposit there is a sign in three languages, explaining some of this history. Sweden has of course played an important historical role in the development of rare earths. It was from a black mineral (later named gadolinite) found in a quarry in Ytterby, a village in the vicinity of Stockholm, that the chemist Johan Gadolin extracted the first individual rare-earth elements (REEs) in the last decade of the 18th Century. Four of those elements were named after the village, namely terbium (Tb), erbium (Er), ytterbium (Yb) and yttrium. Elsewhere in Sweden, from a mineral found in the ore fields of Bastnäs, cerium (Ce) and lanthanum (La) were first discovered and isolated - the mineral subsequently being named bastnäsite (or bastnaesite), after its place of first discovery.
Sweden as a whole has a long history of mining, but the specific area in which Norra Kärr is situated does not have a modern mining operation. As mentioned above, the project is close to a large freshwater lake, which means that any subsequent work has to be particularly mindful of the environmental impact. In the summer of 2011, the Swedish authorities designated the Norra Kärr area as one in which mining activities will take precedent over other land uses, such as the construction of buildings. While there are around 50 such designated sites in Sweden, this is the only one so-designated because of the presence of rare earths. This designation does not mean that the project can avoid the usual normal environmental permitting procedures, but has significantly increased the awareness of the project within the local community and government.
Tasman is looking to mine 1.5 Mtpa of material at Norra Kärr, from which 6 kpta of TREOs will be produced. Projections were built around the potential numbers for Dy. Mr. Saxon said that the project could produce around 360 tpa of Dy, which would meet approximately 15% of total world demand. Such numbers will depend on the results of the Preliminary Economic Assessment (PEA) or scoping study for Norra Kärr, which was initiated in August 2011 and is due for completion shortly. Mr. Saxon said that they anticipated very low strip ratios for the project.
Tasman houses its core shack in an industrial unit in Gränna, recently upgraded from its original location in an old barn on the Norra Kärr site, and we were able to see a wide range of drill-core samples. At the time of our visit, 50 drill holes had been completed, though additional phases of drilling since then have been finalized. Costs were around $85-100 / m drilled, all in, including personnel and rig hire. Mr. Saxon indicated that coarser pegmatitic materials at the center of the property contained higher grades of TREOs, with heavy REO (HREO) numbers around 40-50% of TREO. As one moves towards the edges of the deposit, the TREO reduces slowly but the HREO percentage increases, making it a challenge to determine appropriate cut-off grades for resource estimates, and subsequent cost estimates for producing concentrates. Some of the holes in the drilling campaigns have intersected mineralization over 250 m or more. Additional drilling in the spring of 2011 was geared towards increasing the size of the resource estimate, with down-dip drilling, and to increase confidence in the data by completing in-fill drilling. Further drilling campaigns subsequent my visit has also been geared towards these aims. Note that despite its Nordic location, drilling is possible all year round at this location. As of the time of writing, I am informed that approximately 75 holes have now been drilled, totaling in excess of 13,000 m.
Mr. Saxon said that some non-ore minerals in the host rock also dissolved in the sulphuric acid used to process the eudialyte and catapleiite. Finding a way to avoid such dissolution would be highly beneficial for acid consumption and cost. The recent update provided by Tasman on their processing methods highlighted the use of magnetic separation and flotation in beneficiation, with initial work recovering around 90% of the REEs and over 60% of the Zr present, in a much reduced rock mass. Being able to reduce the presence of nepheline in this way, has greatly reduced acid usage in the processing.
When I asked about the infamous 'silica gel' problem (where the processing of silicate-based materials can potentially lead to the 'gumming up' of processes due to the formation of a gel), Mr. Saxon indicated that to date, they had not encountered such problems in their leach tests. Tasman had previously utilized the services of the late Les Heymann to advise on processing methods, and using Mr. Heymann's knowledge, of the 13 tests conducted, 11 had no silica gel issues. This was achieved by carefully managing the chemistry of the acid solution in which the minerals were dissolved. Mr. Saxon noted that the aforementioned leach testing occurs at room temperature, using sulphuric acid.
During the first evening of the field trip, Tasman gave the group additional presentations on the company, the project and its history. Mr. Saxon kicked things off with an overview of the history of the project. The "muddy paddock in Sweden" was acquired in 2009 by a precursor company to Tasman. Norra Kärr had been first discovered in 1906, and is well known to local mineral collectors. Swedish mining company Boliden AB held the property for a number of years, having an interest in Zr and possible hafnium (Hf) occurences. The project was relinquished in 2001, with the project data only being made available in 2009, via a database put together by the Swedish Geological Survey for all projects. It was soon after that, that Tasman's predecessor claimed the land
Due to previous exploration only being for Zr, Norra Kärr was not previously known as an REE occurrence; it did not feature in the US Geological Survey database, for example, which is perhaps surprising given the prior history of rare earths in Sweden. Tasman had first-mover advantage in Sweden and in Scandinavia in general; since acquisition, Mr. Leijd has led the efforts to date, to get the deposit drilled and characterized. Other projects, such as the newly announced (at the time of the field trip) acquisition of the Olserum deposit, are also being explored and characterized.
Mr. Saxon said that the company could live with setting the value of Ce and La present at Norra Kärr to $0-1/kg, focusing primarily on the Y and Dy present only, given their significant in-situ grades (though of course only a competed PEA or Pre-Feasibility Study (PFS) will be able to figure out if that is the case or not). He said that production of Dy, Y and Zr could constitute up to 80% of revenues for the project. Mr. Saxon also re-iterated the point that the deposit had by far the lowest Th content of any defined resource. When I asked if there was a particular reason for the low occurrences, Mr. Leijd commented that there were no obvious geological reasons. There may have been higher levels of Th and U present in a previously eroded part of the deposit; unusually, the intrusion itself frequently contained lower concentrations of Th and U than the surroundings.
In the past couple of years the European Union (EU) has been increasingly focused on issues concerning strategic materials, including the REEs, and in that context, Mr. Saxon said that Norra Kärr is seen within the EU as a strategic asset. Later in the evening the group heard an interesting presentation from Jaakko Kooroshy, of Chatham House, on the EU perspective on minerals, mining and related matters.
Mr. Saxon pointed out that Sweden has a population of only 9 million people, with a very well developed mining industry. What was not so well known is the fact that 90% of mining production is conducted by Swedish companies (in contrast to other countries and jurisdictions). While the general cost of living in Sweden may be higher than in other jurisdictions, corporate tax rates were relatively lower. In addition, the cost of doing drilling work, and the ability to house people in local towns and villages means that overhead is much lower than other projects, with no need for helicopters, mining camps and the like. I asked Mr. Saxon what the royalty rates were on mining; he said that they were 0.25%, with 0.2% going to the land owner, and 0.05% to the government.
Mr. Saxon commented that they had been in discussions with several different groups in Europe in regards to separation of concentrates. Given the proximity, he said that it was sensible to be talking to such entities, and that the company might consider setting up facilities in a country like Germany, to get ready access to chemicals and reagents. With a rail line some 10 miles away, Mr. Saxon said that mined materials could be transported via rail to appropriate locations for subsequent processing. There are no plans for Tasman to do its own solvent extraction (i.e. separation of concentrates into individual oxides). Given the relatively low concentrations, all processing would need to factor in ease of transportation and associated costs.
At the time of my visit, Tasman had not yet received final confirmation of their dual listing on the NYSE:AMEX exchange, but has subsequently done so. Per Mr. Saxon, the desire to make this move was a reflection of the 8,000+ US-based shareholders that Tasman has, and the need to support them.
Dr. Holmström shared some comments on the permitting process for Norra Kärr. He said that Tasman had started the process ahead of the PEA in order to accelerate the timeline. Such matters are regulated by Sweden's Minerals Act, local and regional environmental codes and other aspects of land use, waste and water management, some of which involve the application of EU legislation. So far, Dr. Holmström said, all of the local municipalities and counties had been positive about the project, in initial discussions.
Interestingly, according to Dr. Holmström there are no guidelines for concentration levels of waste products in air and water, in the Swedish regulations, unlike in other jurisdictions. It was up to the individual operators to show that their processes would have minimal impact on the environment, during permitting. Such work might include, for example, leach tests to simulate the effects of rainfall on a tailings dump.
Dr. Holmström said that they had already commenced the process of obtaining information that can be used in the application for an exploitation concession, simultaneous to applications for environmental permits. He said that the Mineral Act was biased in favor of the mining companies, to encourage the exploitation of natural resources, to the benefit of Sweden. This has led to some conflicts in the north of Sweden, were groups of the indigenous Saami people live and work, engaging in traditional activities such as the management of herds of reindeer. The Saami are increasingly facing the prospect of mineral projects on their traditional lands. Since there are no such groups in the southern part of Sweden, this will not arise for the Norra Kärr project.
Exploitation concessions are valid for definite areas, decided on the basis of the extent of a given deposit. They are granted for 25 years, with 10-year extensions possible, if exploitation is in progress at the time. Dr. Holmström said that there was a special supreme court in Sweden for environmental issues, and five regional courts. When I asked if local politicians can influence the permitting process, Dr. Holmström chuckled, saying that the courts are very independent, and do not take kindly to such attempts at influencing outcomes. That said, legitimate ways to accelerate the overall process included enhanced stakeholder involvement, using high-quality, detailed studies, and discussions with local county and municipality administration boards.
Tasman personnel also gave an overview of the newly acquired Olserum deposit, not far from Norra Kärr. Potential REE potential for this property was identified in 1990; the property itself has previously been subject to small-scale iron-ore mining since the 17th Century. In 2003, the property was claimed by the Swedish junior IGE, who identified HREE-rich minerals in 2004-2005, following 27 diamond drill holes. In March 2006, IGE released figures of 2.5 Mt in resources, @ a grade of 0.8% TREO, and 33% HREOs, although the resource estimate were not NI-43-101- or JORC-compliant. Additional work by a subsequent owner confirmed the presence of REEs at the project, and Tasman acquired the project in October 2011 for 37,746 fully paid shares of Tasman stock. An NI-43-101 compliant resource estimated is slated for H1 2012.
We also heard some information on Tasman's other projects in Scandinavia, including Otanmäki and Korsnas in Finland. In addition, we heard from Stefan Sädblom, an exploration geologist and project manager with Bergskraft Bergslagen, a "project for the development of mining and associated enviromental work" in the Bergslagen region of Sweden, in which Norra Kärr is partially located.
I was most impressed with the Norra Kärr project, and the pragmatic approach that the Tasman team is taking towards its development. Certainly there will be questions about the viability of the material grade in the resource, but the distribution of HREOs, initial metallurgical results and location (location, location) make this a project most definitely one to watch. I am particularly interested to see how the focus on a handful of critical elements as the basis for project viability will fare, following the completion of the PEA and PFS. If successful, this would be a new approach to the issue of dealing with the problem of balance - namely the fact that in order to get at the 'good stuff' such as the CREOs, you also need to deal with a potential surplus of non-CREOs such as oxides of La and Ce.
My thanks go to Mark Saxon and his colleagues at Tasman Metals Ltd, for facilitating my visit to Norra Kärr.