Agrees to Acquire Portfolio of Critical Metal Properties in Namibia Announces $500,000 Private Placement
Press Release
Namibia Rare Earths Inc.
Agrees to Acquire Portfolio of Critical Metal Properties
in Namibia
Announces $500,000 Private Placement
• Agreement with Gecko Namibia (Pty) Ltd (“Gecko Namibia”) to acquire a
majority interest in seven projects ranging from exploration opportunities
to near term feasibility stage
• Diversifies Namibia Rare Earths Inc .’s single commodity focus from heavy
rare earths on the Lofdal project into a broader portfolio of critical metals
and minerals crucial for electric vehicle industry including cobalt, lithium,
graphite, tantalum, niobium, and gold
• Initial focus will be on cobalt project following discovery of stratabound
cobalt-copper mineralization on neighboring license in northern Namibia
• Strategic partnership formed with mineral development and mining group ,
Gecko Namibia , strengthens operational capacities for mineral processing
and mine development
• Pine van Wyk (NHD Met. Eng. B.Com, MBA), Managing Director of Gecko
Namibia, will be appointed CEO of Namibia Rare Earths Inc.
• Gecko Namibia and Gerald McConnell, Chair of the Board of Namibia Rare
Earths Inc, to complete CDN$500,000 private placement
Halifax, Nova Scotia November 10, 2017 –Namibia Rare Earths Inc. (“Namibia Rare
Earths” or the “Company”) (TSXV:NRE) today announced it has entered into an agreement
(“Agreement”) to acquire a portfolio of critical metal properties (the “Properties”) from
Gecko Namibia (Pty) Ltd. (“Gecko Namibia”) in consideration for the issuance of 64,000,000
common shares of Namibia Rare Earths (“Property Acquisition”).
In conjunction with the acquisition, Gecko Namibia and Gerald J. McConnell, Chair of the
Board of Namibia Rare Earths, have each agreed to complete a private placement with the
Company in the amount of $250,000 at $0.05 per share for total gross proceeds t o the
Company of $500,000 (“Private Placement”). A total of 10,000,000 common shares of
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Namibia Rare Earths will be issued pursuant to the Private Placement. The Private
Placement is subject to the approval of the TSXV.
This transaction provides Namibia R are Earths with a high quality, diversified portfolio of
critical metals and at the same time has secured a highly experienced strategic partner .
Gecko Namibia and its subsidiaries are substantial participants in the Namibian resource
sector with 327 employees and a proven track record in the mining industry . The Gecko
Namibia portfolio of properties will expand the Company’s commodity base from solely rare
earths to a variety of highly critical commodities including cobalt, copper, zinc, lithium,
graphite, tantalum, niobium, nickel, and gold. Ground holdings in Namibia will increase from
221 km2 (Lofdal) to over 6,850 km2.
Property Acquisition and Private Placement
Namibia Rare Earths has entered into an agreement with Gecko Namibia to acquire its 95%
interest in a portfolio of exploration properties consisting of 14 exploration prospecting
licences (“EPLs”) four of which are pending , one mineral deposit retention licence (“MDRL”)
and Gecko Namibia’s rights under an option agreement to acquire a 60% interest in a
further exploration prospecting licence which interest may, subject to the terms of the
option agreement, be increased to 80%.
The Property Acquisition and Private Placement are expected to close on or before January
31, 2018 and are subject to certain conditions including, but not limited to, the receipt of all
necessary approvals including the approval and acceptance by the TSXV. Upon completion
of the Property Acquisition and Private Placement, Gecko Namibia will own 69,000,000
common shares of the Company representing 43. 75% of the outstanding common shares of
the Company. The Property Acquisition is further conditional upon receipt of the approval of
shareholders as required by the TSXV.
The proceeds of the Private Placement will be used to carry out work on the properties
acquired from Gecko Namibia with an initial focus on advancing the Kunene cobalt -copper
project and to fund general corporate requirements. The common shares of the Company
issued pursuant to the Private Placement will be subject to a four-month hold period.
Namibia Rare Earths and its insiders are at arm’s length with Gecko Namibia and there are
no finder ’s fee s payable in connection with the Property Acquisition or the Private
Placement.
Following the closing of the Acquisition , Gecko Namibia will nominate two members to the
five-member board of Namibia Rare Earths with Gerald McConnell remaining as Chair. Pine
van Wyk will be appointed Chief Executive Officer of Namibia Rare Earths based in Namibia
and Donald Burton will remain as President . Dr. Rainer Ellmies will be appointed Country
Manager of Namibia Rare Earths (Pty) Ltd. based in Namibia.
Gecko Namibia – A Strategic Partner
Gecko Namibia is a private, Namibian -owned, fully integrated exploration and mining
company with diversified interests in Namibia. Headquartered in Windhoek, the company
and its subsidiaries operate with a work force of 327 employees with a professional
management team of 24 people dedicated to every stage of mineral resource development
including exploration, mining, mineral beneficiation and processing, and the provision of
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mine services (drilling, blasting, laboratories, plant construction, processing and contract
mining).
Gecko Namibia and its sister company Genet South Africa (Pty) Ltd. (“Genet”) were founded
by Kobus Smit who is the Chairperson of both groups. Genet is a similar resource focused
company providing mini ng and mineral processing services in South Africa with 703
employees and a team of 20 professional managers. T he group also employs 285 people in
its various tourism related businesses.
Genet Mineral Processing introduced an innovative dry process, using air clarification to
upgrade coal for the South African market, includ ing to clients like Exxaro and Eskom. Mr.
Smit’s entrepreneurial spirit has led to the establishment of a diversified portfolio of
business interests that include some of the most valuable mining and tourism assets in
private ownership within the Southern African region. Most notably, in 2003 Mr. Smit and
his partners established a new c oal mining company, namely Umcebo Mining, which grew
into a significant coal producer in South Africa with annual production of approximately 9MT.
Over a period, 7 coal mines were developed as greenfield projects , all with in -house
capacity. The success of Umcebo was mainly the result of innovative technology in coal
processing developed in -house that gave Umcebo Mining a significant competitive
advantage over other coal producers. The most significant contract recently completed was
a coal supply agreement with Eskom to the value of R6 .8 billion. In 2011 Glencore acquired
a 41% share in Umcebo Mining. Umcebo Mining was valued R2.2 billion at that time.
During 2017, Mr. Smit disposed of all his interest in Umcebo Mining in order to focus on the
expansion of his business interests in Namibia.
The Portfolio – Diversification into Critical Metals in Namibia
The transaction dramatically increases the C ompany’s exposure to a wide variety of critical
metals and minerals at various stages of development, providing a pipeline of projects
spanning the spectrum from near -term discovery to preliminary economic assessment. All
the projects are located in Namibia, a stable mining jurisdiction in which the Company has
operated for the past seven years and where in -coming senior management have worked
for over 20 years. This diversification will provide the Company with considerable flexibility
in targeting those commodities which can provide immediate shareholder value. The
strategic partnership with Gecko Namibia will allow for fast tracking to mine development as
projects mature to feasibility stage. The portfolio of eight projects, their principal commodity
targets and development stage are summarized in Table 1 and more fully d escribed below.
Project locations are shown in Figure 1.
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Table 1 – Summary of Critical Metals Project Portfolio
Figure 1 - Project Locations - Strategic Metals Portfolio
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1. Lofdal Heavy Rare Earth Project
In terms of project maturity, Lofdal is the most advanced with a 43 -101 resource in place
and completed Preliminary Economic Assessment 1. In 2016 t he Company completed an
Environmental Impact Assessment and filed for an Environmental Clearance Certificate from
the Ministry of Environment and Tourism, and concurrently filed for a Mining Licence with
the Ministry of Mines and Energy. Lofdal is a unique opportunity to develop a relatively low
cost, heavy rare earth mine that could produce significant quantities o f dysprosium, terbium
and yttrium from the principal mineral, xenotime . The project has very similar mineralogical
characteristics to the Brown’s Range deposit in Australia which is currently under
development by Northern Minerals (ASX:NTU) with AUS$97M of financing in place to
complete an initial three year pilot phase operating at 72,000 tpa.
2. Kunene Cobalt-Copper Project
In terms of commodity interest, the Kunene cobalt- copper project offers the most attractive
near-term value add opport unity for the Company. The Kunene project builds upon the
recent exploration success led by Dr. Rainer Ellmies to explore for “copper belt” style
deposits in northern Namibia. This work led to the first recorded discovery of Copperbelt-
type stratabound cobalt-copper mineralization in Namibia in a sedimentary horizon termed
the dolomite ore formation (“DOF”). The mineralization is uniformly 5 to 10 m eters thick,
stratabound within a dolomitic shale horizon, and averages around 0.5% copper and 1000-
2000 ppm cobalt. The initial discovery is currently under intense exploration by Celsius
Resources (ASX:CLA) including a 15,000 meter drill program to complete a maiden JORC
resource estimate by February 2018. As per Celsius Resources’ press release dated May 18,
2017 “Data from the first 20 holes drilled across this 11 km zone has enabled the Company
to generate an Initial Exploration Target of between 33 and 41 million tonnes, grading
approximately 0.13% - 0.17% cobalt and 0.45% - 0.65% copper. It is noted that the
potential quantity and grade is conceptual in nature, and that there has been insufficient
exploration to estimate a Mineral Resource, and it is uncertain if further exploration will
result in the estimation of a Mineral Resource.”
The Kunene cobalt-copper project comprises a very large area of favourable stratigraphy
contiguous with the DOF discovery adjacent to the ground held by Celsius Resources.
Secondary c opper mineralization over a wide area points to preliminary ev idence of a
regional-scale hydrothermal system. Exploration targets on EPLs held in the Kunene cobalt -
copper project comprise direct extensions of the DOF style mineralization to the west ,
sediment-hosted cobalt and copper, orogenic copper, and stratabound Zn-Pb mineralization.
Most of the occurrences are likely spatially related to what Dr. Ellmies’ geological team has
interpreted as a large hydrothermal center termed the Steilrand hydrothermal system.
There is considerable scope for further discoveries both along strike of the Celsius discovery
and in equivalent stratigraphy elsewhere on the property. Initial investigations will trace the
western extension of the DOF which may continue for over 10 km in the project area, and
will follow up on numerous co pper-cobalt targets drilled in the past but never analysed for
cobalt.
1 Preliminary Economic Assessment on the Lofdal Rare Earths Project Namibia dated October
1, 2014 authored by David S. Dodd, B. Sc (Hon) FSAIMM - The MDM Group, South Africa, Patrick J.F.
Hannon, M.A.Sc., P.Eng. and William Douglas Roy, M.A.Sc., P.Eng. - MineTech International Limited,
Canada, Peter Roy Siegfried, MAusIMM (CP Geology) and Michael R. Hall, B.Sc (Hons), MBA,
MAusIMM, Pr.Sci.Nat, MGSSA - The MSA Group, South Africa
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3. Black Range Graphite Project
The Black Range flake graphite prospect was discovered in the late 1980's and was explored
by Rossing Uranium Ltd. between 1988 and 1992. Rossing interpreted the graphite horizon
in a fold structure with a total strike length of about 8 k m. Based on 3,821 m of percussion
drilling and 3,931 m of diamond drilling from a 1 km segment of the horizon , employing a
cut-off grade of 2% graphitic carbon and using the polygonal section method, an historical
estimate of 12.46 MT grading 4.63% graphitic carbon was utilized by Rossing to assess the
project (reference “The Black Range Graphite Deposit, Feasibility Study Final Report ” dated
August 1992). This histo rical estimate does not cite reference to CIMM Definition Standards
on Mineral Resources and Mineral Reserves. Additional drilling and sampling will be required
to validate the historic database. A qualified person has not done sufficient work to classify
the historical estimate as current mineral resources or mineral reserves and this historical
estimate is not being treated as a current mineral resource or mineral reserve. Preliminary
mining plans were drawn up and preliminary metallurgical work was carried out by Mintek of
South Africa but the project was terminated before the flowsheet was fully optimized when
the decision was made to focus instead on the graphite deposit at Okanjande. Okanjande
was brought into production in 2017 by Gecko Namibia in a joint venture with Imerys.
Black Range is slightly lower grade than the producing Okanjande Graphite Mine (but the
potential resource is much larger than the 1 km of strike length that has been tested to
date. The data cannot be used in its present form for reporting under JORC or NI 43 -101,
however a similar problem was encountered at Okanjande and was addressed by a program
of twinning of old drill holes and assaying of the core with full QAQC. That work largely
validated the Rossing work so it should n ot be necessary to re -drill all the holes at Black
Range. The near-term focus will be on metallurgical test work and , with a viable flowsheet ,
the project could be taken rapidly to a compliant PEA stage.
4. Warmbad Lithium Project
The Warmbad project is located in south ern Namibia near the South African border in an
area of historic small-scale pegmatite mining known as the Tantalite Valley. The Tantalite
Valley pegmatites have been mined since about 1946 for beryl, columbite-tantalite, lithium
and bismuth minerals. Mining has been re -activated by Kennedy Ventures Plc who control
African Tantatite (Pty) Ltd . and are producing concentrates of >40% Ta 2O5 being sold into
global markets. Initial production of 20M tpa concentrate is ramping up to 120M tpa. An
initial lithium resource estimate is being prepared by MSA Group for early 2018 following
the sampling of lepidolite bearing pegmatites grading >1.6% Li2O.
The Warmbad EPL covers 605 km 2 and hosts three pegmatite occurrences of undetermined
extent from government maps. There are no records of any systematic exploration over the
EPL. The area has recently been mapped by the Geological Survey of Namibia and the
Council of Geosciences (South Africa) which has provided updated geological information. A
key result of the mapping campaign is the delineation of previously unknown extensive
pegmatite swarms of up to 13 km strike length . None of the se pegmatites have ever been
sampled and assayed. This new data will be utilized to undertake systematic sampling of the
pegmatites.
5. Epembe Tantalum-Niobium Project
Epembe is an advanced stage exploration project with a well -defined, very large multiphase
carbonatite dyke that has been mapped and samp led at surface over a strike length of 10
kilometers of which at least 7 km of strike length is mineralised. Gecko Namibia has
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completed detailed mapping and over 11,000 meters of drilling on the dyke, with
preliminary mineralogical and metallurgical studies. The carbonatite contains variable
concentrations of pyrochlore which is unusually enriched in tantalum. The other
commodities of interest are niobium (hosted in pyrochlore) and apatite. Drilling covered
only 15% of the pyrochlore hosting carbonatite. Grades of the drilled portion of the
carbonatite average on the order of 150 ppm Ta 2O5, 1,300 ppm Nb 2O5 and 2.4% P 2O5.
Initial sorting tests (XRT) indicate the potential for significant physical upgrading. Planned
work will focus on improving grade by optimizing XRT sorting and investigating amenability
to XRF sorting. There is potential to delineate a substantial open pit resource by further
exploration, both by extending known mineralized zones along strike and vertically.
6. Grootfontein Nickel-PGE Project
Grootfontein is an early stage conceptual target based on geophysical and historical
evidence for a large buried mafic-ultramafic intrusive complex. It is a po orly explored
geological complex due to the extensive coverage with Kalahari sands and calcrete.
Based on historic drill holes and airborne magnetic survey interpretation s, Grootfontein
constitutes a huge mafic complex covering 360 km 2 with the potential to host magmatic
nickel, copper, vanadium, platinum group elements and chromite mineralisation as
cumulates or late magmatic disseminations and stockworks. Previous work by Ongopolo
Mining proved that the main intrusive phases are depleted in nickel and copper. The metals
were likely fractionated as sulphides during the intrusive phase, gravitationally accumulated
in the magma and intruded in the adjacent, preexisting rocks. As in other mafic hosted
copper-nickel deposits such as Norilsk and Voisey’s Bay, sulphidi zation by scavenging of
sulphur from country rocks and tectono -magmatic concentration of the sulphide -rich melts
are the key for the formation of this type of magmatic copper nickel deposits. On ly two
shallow drill fences (total of 1,386 m) were drilled by Anglo American in 1988 leaving 55 km
of strike length untested.
There is also potential for zinc -lead-vanadium mineralisation of the Berg Aukas type where
dolomite-hosted deposits bordering the mafic complex , which according to historical
records, produced 1.6 MT of ore grading 16.77% Zn , 4.04% Pb and 0.93% V2O5 during the
period 1967-1975.
7. Otjiwarongo Carbonatite Project
Otjiwarongo is another early stage conceptual target based on remote sensing data in
proximity to known alkaline intrusive complexes, most notably the Okorusu complex which
hosts the Okorusu fluorspar deposits. The area of interest is completely hidden by cover.
The c ircular anomaly measures one kilometer in diameter and can be easily tested by
drilling to determine if in fact a carbonatite body is the source and what styles of
mineralization might be associated with it (fluorspar, rare earths, tantalum, niobium etc.).
8. Erongo Gold Project
The Erongo gold project covers an area of over 600 km2 within the Navachab-Ondundu gold
trend. There are numerous mineral occurrences within the project area including at least
two gold occurrences. The area has been prospected but not systematically explored .
Potential targets include skarn and greisen gold-(copper-bismuth) and tin -tungsten
mineralization; pegmatites formed during the late Damaran orogeny hosting lithium
minerals and semi-precious stones and structurally controlled gold mineralisation. Historical
figures indicate small scale mining for all of those deposit types on the property.
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Project Management Strengthened – Operational Experience Focused on Namibia
Operations in Namibia for all projects will continue under Namibia Rare Earths (Pty) Ltd.,
the Namibian operating company of Namibia Rare Earths. Project management will be
streamlined through utilization of Gecko Namibia’s in- country administrative and service
providers drawing upon the resources of the following senior personnel:
Pienaar-Schalk ( Pine) van Wyk (NHD Met. Eng. B.Com, MBA), Managing Director of
Gecko Namibia will be appointed Chief Executive Officer of Namibia Rare Earths based out of
Namibia. Pine joined Gecko in 2008 bringing over 25 years of extensive process and project
management experience to the Gecko Group. Prior to joining Gecko Namibia he worked for
Rossing Uranium as Engineering Manager and later with Paladin Energy at the Langer
Heinrich uranium mine where he held the positions of Operations Manager and Business
Development Manager. As Managing Director for Gecko Namibia, Pine has developed a
strong network of contacts throughout the mining sector and with government agencies in
Namibia. In addition to his professional qualifications as a Metallurgical Engineer from
Tshwane University of Technology (Pretoria), Pine holds a Bachelor of Commerce from the
University of South Africa and Masters of Business Administration from University of
Bloemfontein with a focus on project management.
Rainer Ellmies, PhD., General Manager of Gecko Exploration since 2016 , will be appointed
Country Manager of Namibia Rare Earths (Pty) Ltd . based out of Namibia and will carry
principal responsibility for the design, implementation and development of all projects
through to feasibility stages. Rainer has been instrumental in a ssembling the property
portfolio for Gecko Namibia and has been directly involved in a number of significant
mineral deposit discoveries in Namibia including the heavy rare earth deposit at Lofdal,
Namibia’s first sediment-hosted cobalt deposit at Opuwo, tantalum -niobium at Epembe,
copper, zinc -lead-barite in the Kunene region and light rare earths at Keishöhe/Dicker
Willem. Rainer brings a combination of extensive technical and commercial skills as well as
in-country knowledge of Namibia’s mineral sector through his seven-year tenure as Manager
of German -Namibian Development Cooperation in the Namibian Ministry of Mines and
Energy. Rainer received his Ph.D. and M.Sc. in Economic Geology from the Technical
University of Berlin.
Other Interests within Gecko Namibia
Gecko-Imerys Graphite Processing Facility Gecko Namibia’s Okorusu Mine