LKY hits 6% rare earths oxides next door to $17BN MP Materials in California, USA

Our US critical minerals Investment Locksley Resources (ASX: LKY) just hit rare earths from its project inside ground held by $17BN MP Materials.

LKY’s project is ~5.5km to the south of MP Material’s Mountain Pass Mine - the only rare earths mine operating in the USA.

And LKY’s ground is totally surrounded by MP claims:

(source)

Today LKY announced drill results from its project hitting rare earths from all 4 holes drilled:

(source)

A good start from LKY and the most important takeaway for us being that LKY’s target generation methods correlate with mineralisation below the ground.

LKY drilled these targets based on first defining 2 anomalies, then taking surface samples (which had grades up to ~13% total rare earth oxides).

Now with today’s drill results we know that the targeting methods worked…

We also noticed, LKY has similar anomalies on its ground to the north/east - bordering MP’s mine:

LKY already has 7 similar anomalies across that target area and confirmed it would be Integrating the magnetics and gravity datasets into exploration targeting next.

We’ll be watching to see what comes from that area over the coming months.

LKY also announced final results from its Desert Antimony Mine

LKY also announced assays results from the final two holes drilled at its Desert Antimony Mine.

LKY’s fast-to-market strategy is built around getting ore from this old mine, processed into end antimony products.

LKY has an 772k-1.38M tonnes at 2.5-4.9% antimony for ~19,400 tonnes to 67,700 tonnes of antimony metal exploration target on the project (source).

It even designed a conceptual processing plant for the project: Watch: LKY Desert Antimony Mine Restart Plan

Today’s results confirmed antimony extends to the south AND below the old workings:

(source)

(source)

A quick update on LKY’s processing work programs

A big part of the reason why we are Invested in LKY is for the work the company is doing in the processing/refining space.

The biggest bottleneck for critical minerals supply chains in the west isn’t necessarily the mining but more so the processing capacity/expertise.

LKY currently has 4 processing programs in progress:

• Pilot plant design and metallurgical test work (Hazen and Rice)
• Production of representative samples for US industrial and defence qualification (Hazen)
• Commercial analysis and process optimisation (Hazen and Rice)
• Rare earth processing tech development (being done with Columbia University)

LKY’s already managed to turn ore from its project in California into a final antimony ingot product.

LKY’s also managed to produce a 99.5% trioxide product - we think that over time, as the processing partnerships make progress this could become a bigger part of the LKY story.

We noticed just this week the US government through the Department of Energy announced US$134 Million to go towards proving commercial viability of 2 rare earths projects.

Part of a bigger trend of cash becoming available for companies trying to solve the critical mineral processing and refining problem in the west and inside the US.

(source)

What we want to see next from LKY

🔄 Target generation across antimony and rare earth targets

Now with LKY’s first phase of drilling done across its rare earths and antimony targets we want to see all of the exploration data on hand merged into 3D geological models.

Ultimately we want to see LKY define a new set of targets for future drill programs.

Here are the milestones we are tracking:

• 🔲 Integrate the first phase drilling results into updated 3D geological models
• 🔲 Integrate magnetics and gravity datasets
• 🔲 Follow up geophysics + rock chip sampling work

🔲 Product qualification with defence and industrial partners

LKY has now produced both antimony ingots and 99.5% antimony trioxide from its Mojave Project ore.

The next step is getting this product qualified with potential customers - metals traders, defence supply chain participants, and government agencies.

Bench-scale validation of processing and economic assessment is the next milestone for the Rice University program.

LKY has signed partnership agreements with Rice University, Columbia University and Hazen Research.

Broadly, we want to see LKY progress the following across the three partnerships:

• Pilot plant design and metallurgical test work (Hazen and Rice)
• Production of representative samples for US industrial and defence qualification (Hazen)
• Commercial analysis and process optimisation (Hazen and Rice)
• Rare earth processing tech development (being done with Columbia University)

🔲 US government funding decisions

LKY has a US$191M LOI from US EXIM and a US$43M DPA Title III application in play. (source)

With the Pentagon actively deploying capital into antimony projects, we think LKY could be in conversation the next time funding goes out.