Asra Minerals (ASX:ASR): Interview with Managing Director Rob Longley

 

Asra Minerals (ASX: ASR)

We spoke to Rob Longley, Managing Director of Asra Minerals (ASX: ASR), about the potential of Asra’s Mt Stirling Rare Earths Project to host the kind of Heavy Rare Earths that are in short supply and attract a price premium, namely Dysprosium (‘Dy’) and Terbium (‘Tb).

It is early days for Mt Stirling, but the company benefits from insights gained from Asra’s adviser, Emeritus Professor Ken Collerson of the University of Queensland.

We also talked about the gold potential of Mt Stirling, given the proximity of the project to Red 5’s King of the Hill Mine. Currently, Asra has a 152,000-ounce gold resource and believes it has potential to find more.

Full transcription below.

 

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Transcription

 

Stuart: Hello and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our service. And joining me this morning on Monday, the 22nd of May 2023 from Perth is Mr. Rob Longley, who’s the Managing Director of Asra Minerals, ASX: ASR. Rob very early Monday morning. So I’m your first meeting of the day. Good morning.

Rob: Morning, Stuart, good to speak to you and speak to your readers.

Stuart: Right. You recently stepped out from day-to-day management of Ardiden where you were working on a lithium project in the Canadian province of Ontario hoping to take a bit of a break and then before you know it, people are encouraging you to get to work on Asra Minerals with some very interesting gold and rare earths plays. How long did you manage to take off before you were dragged back into the world of employment?

Rob: Yeah, probably a week I got in there, Stuart. That’s a pretty accurate background, which is enough, right? I’m pretty excited by what Asra have in the rare earth space as well as their gold portfolio. So it was a pretty easy decision to… When Paul Summers, our executive chairman, approached me and asked me to have a look at Asra, I thought this looks really interesting.

You’re right. Previously, I was MD of Ardiden, which had both gold and lithium assets in Canada, which obviously involved a lot of time on the road. And with the divestment of the lithium into GT1, Green Technology Metals, it was pretty difficult to manage both jobs with both GT1 and ADB, so I decided to stay as NED with GT1 and still am. So I’m on the board of Green Technology Metals.

But in terms of a full-time role, Paul Summers quickly grabbed me here in Perth. He’s known me and what I’ve been doing for some time and wanted geology and chemistry eyes on the Yttria rare earth project. So I had a quick look. And before I knew it, I was at Mt. Stirling with Ken Collerson, a professor, and Matt and the whole board, and thought this is a good deposit that needs a clearer look at it scientifically. And that’s where we’re at. So it’s been exciting so far, and we’re looking forward to what’s ahead.

Stuart: Right, let’s turn to the company that’s absorbing most of your attention right now. We got to Leonora, the top end of those wonderful Greenstone belts have been so productive over time in the Eastern Goldfields. Mt. Stirling, you don’t have a resource at Mt. Stirling that you can publish yet. What your turning up is some great data both at the rock chip and then in the early drill stuff. It’s got everything you want. We’re talking, clay-hosted. Now there’s a bit of debate about who’s got the best clay host, but clay-hosted, close to surface, no thorium or uranium in the mix. And importantly, and this is something I’ve come to appreciate a bit more, more of the heavy rare earths as opposed to the light rare earths. It’s fair to say you and your colleagues, and particularly Ken Collerson who is an authority on rare earths, are pretty excited about what you’ve got at this early stage.

Rob: Ken’s constantly dripping with enthusiasm, which is great. You need people like that in your team. Each time he comes up to Mt. Stirling or travels on the road with us, we’re just a couple of weeks on the East Coast, he’s genuinely excited, both scientifically and in terms of its uniqueness. I mean, you touched on the important points there. And I think really what separates yttria, which is part of the deposit at Mt. Stirling, is that really high ratio of heavy rare earths. It’s unusual to see that. We’ve got areas with 80% heavies, and that’s what really delivers the value in the ground at this stage. We’re now moving towards metallurgy and ore body knowledge, but we’ve got a massive database, really detailed, that Ken and I and our consultants have been able to have a close look at and work out which parts of this deposit are ionic, which parts are gonna deliver serious value and grow the resource from there. There’s a lot of areas at Mt. Stirling which hasn’t even been looked at yet.

So they’ve concentrated… When I came into Asra, I think last November, I’d inherited basically a lot of drill samples which were still in the field that hadn’t been put in for assay. So we rounded all those up, put them through the labs and we got about another 70 holes still to report, but they’re all confirming what we’re starting to see here. There’s heavy dominated low uranium thorium deposit that comes as close to three meters below surface. So the rare earth deposit itself is a standard.

Stuart: Three meters? If this is any good, the cost of production could be, and maybe I’m jumping ahead, could be very tiny.

Rob: Yeah, it’s a small… Yeah, we’re next to Red 5, the big King of the Hills Tarmoola gold project. And we’ve got good exposures of regolith around the region within arm’s length of our ground. And the regolith is very soft and very amenable to just basically free digging. So the ore body itself extends down to about 30 meters, 35 in a few places where it goes deep. That’s the rare earths. We haven’t talked about scandium yet, but everything in the background is scandium ridge, but that’s another entity to talk about. But the rare earths [crosstalk 00:05:03.934].

Stuart: Because in a previous life you were with the Hilliers [SP] Gold working on the Sunrise Scandium. Well, scandium is just one of the metals you had in that one, but you’ve had to spend a bit of time on that metal at some stage in your career.

Rob: Yes, I have and Ken and Paul Thomas, our executive chairman, do a lot of research in that area, as well as do our consultants in terms of who’s interested in scandium, which starts with Rio Tinto, right, they’ve just bought a scandium deposit in New South Wales. So, scandium is gonna be an added bonus. And everything we dig out of yttria for the rare earths down to 30, 35 meters, all of the waste cycle waste is gonna be mineralized waste, it’s gonna be scandium rich, between 30 and 120 PPM scandium, which is unheard of. Whether there’s a market for that is yet to be determined, but if you’re gonna dig it up you’d stockpile it and keep it separate.

I mean, it wasn’t that long ago. I know your background goes right back to Greenland Minerals, but rare earths have only recently come into high demand. And scandium is kind of like…we’re early in scandium, it’s there with our deposit, so why not pay attention to it and treat it carefully as you’re excavating, so scandium can be removed using the resin-in-pulp, there are ways to remove scandium. But really our total focus at the moment is on the heavy, rare earth of yttria at Mt. Stirling, which, as you said, has almost no uranium or thorium. So a lot of ticks for those in the know looking for good rare earth projects in WA.

Stuart: So let’s workshop this heavy versus light issue a little bit and we’ll give some background here. So Professor Ken Collerson, Professor Emeritus at the University of Queensland, formerly professor of geology at the University of California, Santa Cruz, and authority on rare earths. His basic thesis is, the more yttria you can find, the more indication that you get a predominance of heavy rare earths in whatever deposit lies below. Have I summarized Ken’s thinking in a way that packages it up well?

Rob: I don’t want to speak for Ken, I’m sure he can elaborate a lot further on that. I think what…Ken has traveled the world and knows most uranium and rare earth deposits globally. And each has its own merits right. There’s neither… Yeah, it’s not good to dissuade people from looking at all projects, and [inaudible 00:07:17.653] talks about this pretty sensibly and he’s got great experience with rare earths. There’s room for all good rare earth projects. There’s clay and then there’s hard rock, hard rock will generally carry uranium, thorium and be more dominated in the light rare earths, neodymium praseodymium. So they’re lower value, but they’re still in demand. So they might be $130, $150 a kilo, whereas your terbium dysprosium between $500 and $1500 a kilo. So you need far less of it to deliver the same value.

So the more heavy rare earths you have the higher value per kilogram you’re probably going to get. I think what’s unique about Yttria. And what Ken has realized is that it’s a part of the rare earth basket that no one else has, that they probably want. Everyone has NdPr, which is in demand and is used for low-temperature end of the game, but the heavier rare earths are lacking in supply. So as we define yttria and expand on it, I think people will start to see the DyTb and the heavy rare earth component of yttria has been something exceptional.

Stuart: Right. Now, you’ve got a fair bit of work to do in the next little while. You talked about working on the metallurgy, and all body knowledge generally. Let’s say it’s Christmas, if we’re talking in May right now, imagine it’s Christmas, what do you hope to achieve by then with your work on Mt. Stirling?

Rob: Yeah, well, having derisk through metallurgy, understanding what the maiden resource looks like and what our upside potential at both Mt. Stirling and on our other tenure may deliver. So this is just the beginning really. Yttria was only discovered just over 12 months ago, so unlike many rare earth projects, there’s a lot of knowledge to put into the system, metallurgy is critical. So I was just in Brisbane recently visiting some labs there and I’ll be visiting some here in Perth to really make sure we understand which part of the ore body to go after, which is OBK, ore body knowledge. And that’s my background and our technical teams background is not rush to decisions too early and potentially fall in a hole yourself too quickly, but to really understand which parts of this project are gonna deliver value and which ones are relatively easy to recover.

And as you mentioned before, you know, working on the Sunrise (Syerston) project in New South Wales teaches you that. That was a more complicated or a multi-element project which was both nickel, cobalt, and scandium as well as platinum and palladium at depth. This probably has elements of that as well being probably an ultra [inaudible 00:09:48.287] intrusion at depth, but we’re really gonna focus on near-surface of what we drilled intensely. So between now and the back end of the year, we want to really advance the metallurgy at both initial stage and then more advanced testing, collect some more diamond drilling from yttria. There’s no diamond drilling yet through yttria.

So we need to understand exactly the profile of the densities, the material types, where the heavy sit in terms of the profile. And we’ve got plenty of examples at Tarmoola Station, which we own at Mt. Stirling, where there’s pits around us that we can understand, but it’s really on top of the deposit in the ionic areas that we want to take some more diamond samples and work towards. We’ve got four guys in the field at the moment doing geochemist soil sampling across the property at Mt. Stirling, to say where’s the next yttria. Because we really just drilled in one part of our tenement holding, which goes from 20Kms, and we draw 3 kilometers of it.

So we think we understand where it’s gonna go. But I think as we talked about before, you never assume, geology is a funny thing. Gold particularly never behaves properly. It’s always where the driller thinks it is rather than where the geologists perhaps. Rare earths are probably a little bit more predictable. We’re looking for deep parts the regolith that will continue from here, so step out drilling as well a long strike. And then at our Koookynie project to the south, which is still in the Leonora region. I’m starting soils and peak RF again to work out is there another yttria, you know, just south of where we are, and just see how big this area could be.

Stuart: Right. Let’s stay with Kookynie. So we’re about 50 kilometers south of the project area we’ve been talking about. And you’ve had a bit of success so far in prooving up a very small gold deposit. Talk to us about the origins of that project and where you hope to take it on the gold side.

Rob: Well, the gold side, the ore resource that we have at Asra is back at Mt. Stirling, so it’s the Viserion and the Stirling Well project, about 150,000 ounces of gold at about 1.7 grams per tonne. So a moderate size gold resource, well-defined. Kookynie South, which we’ve got an option over with a really good vendor that’s been very agreeable to terms, is right on the Greenstone granite contact, and it has about 25k, 30k stripe length, and the grounds never been worked before. So we think that that area is prospective for both gold being at Kookynie area.

Stuart: Unusual given how busy the neighborhood is that this might be a [crosstalk 00:12:08.565].

Rob: Yeah, it is. I mean, this vendor has held that ground for some time, and has believed in it, he’s just wanted the right partner to come in and work it. And we’re working with him on other areas at the moment that we’re looking at as well. So he has large land holdings in the Kookynie area. And there’s potential in there to expand that gold portfolio into a really exciting area, where others are either in legal battles with each other or looking to the USA or Canada at lithium, everyone’s sort of looking that way and forgetting what’s so great in your own back garden. I think, you know, coming back from Canada myself from working over there physically, it’s amazing to see what is going in the Eastern Goldfields of WA and around Kalgoorlie, the diversity of projects, the activity in the area, and just the number of pits and projects you see from the air flying around.

So there’s still discoveries to be made right in our own back garden. We’ve got new tools to be able to go out and to do risk theories to focus in on where we’re gonna be drilling so the investors get more bang for buck out of their dollar investment in terms of exploration. So we were standing at Kookynie West and we’re looking at other parts of Kookynie in terms of what’s possible to expand our gold portfolio. So while concentrating most of our activity at the moment on the yttria rare earth deposit at Mt. Stirling, we’re not ignoring the fact that gold will come into its own we think in the not-too-distant future. And even just under $2000 an ounce, it’s still highly exciting and a good space to be in.

Stuart: It struck me. Gold running hard, but a lot of gold equities have been ignored in the rush to get into lithium. So this is your big opportunity.

Rob: The cheap acquisitions, right? So Asra doesn’t have massive cash reserves to go out and buy resource, not yet anyway. So we pick up what we think is suitable to our portfolio that’s affordable, that’s in the region where you can work. You don’t want to be traveling to the Pilbara or to Queensland or places like that on Greenfield and Brownfield projects too often at our market cap. So we’ve taken sensibly, what we think we can add to the portfolio to make it a better investment decision. And at some stage down the track, you know, having done systematic exploration and working out what we’ve got there… It’s in my past as well that we divested a non-core asset out of a company I used to work for and made a lot of money for shareholders along the way.

So that’s ultimately what Asra has to do is making an investment decision for people to come into Asra and see a path to making money on the way out on the way through on the journey. But ultimately, we all want to be standing there holding the gold bar or a pallet full of mixed carbonate rare earths. And that has to be the geologist and the team’s drive, right, that’s what we’re moving towards. What happens along the way is sometimes out of your control, but you’ve got to leave a legacy of good data and good reporting, and good progress behind you so that whoever takes over the reign of the project in the future doesn’t have to go back and redo that work, and that they can build on good geology, good chemistry, good scientific, and good reporting all the way through. So that’s what our team is really focused on doing.

Stuart: Rob Longley, thanks for joining “Stocks Down Under.”

Rob: My pleasure. Good to speak to you, Stuart. Thanks.