Harena Resources all set to become London’s only listed ionic clay rare earths company

It’s only a matter of time now before rare earths company Harena Resources makes its debut on the London market. 

The plan is for privately-held Harena, which had its genesis in Australia and holds assets in Madagascar, to take over cash shell Citius Resources (CRES)Follow | CRES.

FCA approval is pending, but is expected in the current quarter.

When the deal completes, Harena will have access to a market that’s more familiar and comfortable with African projects. 

London’s investors, for their part, will get access to Ampasindava, an ionic clay rare earths deposit  that’s already known to contain 699 million tonnes of ore grading 868 parts per million total rare earth oxides. 

That JORC 2012 compliant resource estimate followed on from around US$20 million of spend on the project, undertaken by former owners. Amongst other things, work thus far completed includes 4,500 test pits and 359 drill holes. It’s also been established that negligible thorium and uranium are present in the deposit, meaning that processing with low impact salts ought to be relatively straightforward and the product saleable into the market.

The plan, once Harena gets listed, is to complete feasibility studies for the development of Ampasindava. Much of the groundwork for these studies has already been done, however, and it’s already clear that the project has a great deal going for it.

For a start, it’s strategically located on the north-west coast of Madagascar, right next to a port. This has the double benefit that when it comes to project development it will be easy to ship things in, and that when it comes to production, it will be easy to ship the rare earths out. What’s more, the process that Harena envisages using at Ampasindava uses salt water as its primary leaching agent – and that brings us onto another advantage the project has, its style of mineralisation. 

In comparison to other types of rare earth deposits, ionic clay deposits are generally simpler to process into carbonate for sale. No need to use acid of any kind. Instead, salt water and ammonium sulphate, which is effectively garden fertilizer, are all that’s required. 

That’s encouraging enough, but there’s more good news. In the case of Ampasindava, the plan is to mine only the top ten metres of the deposit, with the two metres of overburden stockpiled for use in rehabilitation. The mining will be free dig, with the material trucked to the saline leach pads. After leaching, the residual material is returned to where it was taken and the topsoil returned. Power consumption will be modest. No tailings dams are involved, and since the area has been disturbed before, environmental objections are likely to be kept to a minimum.

All this makes Harena stand out as a shining light amongst its peers. 

It will be the only company listed in London with a pure ionic clay rare earths project. And the simplicity of the mining, the ease of rehabilitation, and lack of any acid use is also likely to be looked upon favourably by the Madagascan government.

True, the government wants to see economic modelling before the fiscal arrangements are finalized. 

But in the meantime, the company has applied for its exploration license to be converted into a mining license, and is positioning itself to start generating the rest of the information that the government needs. 

One major positive that’s already confirmed is the interest of off-takers. Last year the company announced that it had signed a non-binding termsheet with a US rare earths company for the sale and purchase of rare earths from Ampasindava. 

And Joe Belladonna, the company’s managing director, is confident that the pace of work will be rapid and productive once the listing completes. 

The £1.9 million that the company plans to raise will go towards completing the feasibility studies, which he reckons will take about six-to-nine months to complete. After that, and allowing that the license and permits have been granted, he reckons it will take about two years to get the mine running. 

If Harena can stick to that timetable, it will be impressive, but not unprecedented. The team is highly experienced, and includes Allan Mulligan, who recently managed a similar ionic clay rare earths project in Uganda.