Namibia Rare Earths Inc. Provides Update on Agreement to Acquire Portfolio of Critical Metal Properties in Namibia and $500,000 Private Placement
Press Release
Namibia Rare Earths Inc. Provides Update on Agreement
to Acquire Portfolio of Critical Metal Properties
in Namibia and $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 December 8, 2017 –Namibia Rare Earths Inc. (“Namibia Rare
Earths” or the “Company”) (TSXV:NRE) today provided an update on its progress towards
completing the acquisition of 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”) and on its progress towards
completing a $500,000 pri vate placement (“Private Placement”) both of which were
announced in the Company’s press release of November 10, 2017 . Pursuant to the policies
of the TSX Venture Exchange (the “Exchange”), the Company is required to issue a news
release every 30 days following its initial news release to provide an update on the status of
the Property Acquisition.
The Company is focused on the regulatory process to obtain the consent of the Exchange for
the Property Acquisition and the Private Placement. Exchange conditional approval of the
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Property Acquisition was obtained on November 17, 2017 and the Company is working to
fulfill all conditions for final approval.
In accordance with the policies of the Exchange, t he Namibia Rare Earths shares are
currently halted from trading and it is expected that they will remain halted until receipt and
review of acceptable documentation regarding the Property Acquisition, pursuant to
Exchange listings Policy 5.3.
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%.
This transaction provides Namibia Rare 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 th e 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.
In conjunction with the Property 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 to
the Company of $500,000 (“Private Placement”). A total of 10,000,000 common shares of
Namibia Rare Earths will be issued pursuant to the Private Placement. The Private
Placement is subject to the approval of the TSXV.
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 conditional upon receipt of the approval of
shareholders as required by the TSXV which has been obtained.
The proceeds of th e 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 t he Property Acquisition or the Private
Placement.
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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.
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 assess ment. 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 c onsiderable 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 described below.
Project locations are shown in Figure 1. Total expenditures of $84,000 in year one and
$422,000 in year two are required to keep the entire portfolio of properties in good
standing.
Table 1 – Summary of Critical Metals Project Portfolio
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Figure 1 - Project Locations - Strategic Metals Portfolio
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.
2. Kunene Cobalt-Copper Project
In terms of commodity interest, the Kunene cobalt -copper project will be assigned highest
priority given the high level of investor in terest in cobalt and current high cobalt prices. The
Kunene project builds upon the recent exploration success led by Dr. Rainer Ellmies
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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(General Manager, Gecko Exploration) 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 sha le horizon, and averages around 0.5% copper and 1000- 2000 ppm cobalt .
The initial discovery is currently under in tense 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 o ver a wide area points to preliminary evidence 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 a rea, and
will follow up on numerous copper -cobalt targets drilled in the past but never analysed for
cobalt.
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 historical 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 b eing 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.
There has been insufficient explora tion at Black Range to estimate a Mineral Resource, and
it is uncertain if further exploration will result in the estimation of a Mineral Resource or the
development of an economically viable mining operation. The data cannot be used in its
present form fo r 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
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and assaying of the core with full QAQC. That work largely validated the Rossing work, so it
should not 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 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% Li 2O. The mineralization
hosted on the Kennedy Ventures Pic property is not necessarily indicative of the
mineralization hosted on the Warmbad Lithium Project.
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 sampled at surface over a strike length of 10
kilometers of which at least 7 km of strike length is mineralised. Gecko Namibia has
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. Further work will be undertaken to explore for extensions of mineralized
zones along strike and at depth.
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
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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. Only 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.
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 and
the appointment of Pine van Wyk as Chief Executive Officer.
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.
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About 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
mine services (drilling, blasting, laboratories, plant construction, processing a nd 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 mining and mineral processing servic es in South Africa with 703
employees and a team of 20 professional managers. Genet Mineral Processing introduced an
innovative dry process, using air clarification to upgrade coal for the South African market,
including to clients like Exxaro and Eskom. M r. 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.
The group also employs 285 people in its various tourism related businesses.
Most notably, in 2003 Mr. Smit and his partners established a new coal mining company,
namely Umcebo Mining, which grew into a significant coal producer in South Africa with
annual production of approx imately 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. 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.
Graphite Mine in Production
Gecko Namibia was instrumental in bringing the 500,000 tpa run of mine Okanjande
Graphite Mine into commercial production in 2017 through a joint venture partnership with
Imerys, a global leader in the production of mineral- based, high value specialty prod ucts.
Gecko Namibia re -designed a portion of the crushing, milling and flotation facilities at the
Okorusu Mine for graphite processing of up to 20 000 tpa of graphite concentrate.
Fluorspar Mine and Processing Facilities
Gecko Namibia acquired all the mine and processing facility assets of the Okorusu Fluorspar
Mine from Solvay in 2016. A comprehensive test program has been developed with the
objective of re-opening the fluorspar operations at Okorusu. Okorusu produced clo se to 1.8
million tons of fluorspar concentrates over a 27 -year period between 1998 -2014, when
Solvay made the corporate decision to close down its global mining division.