Elk Creek Niobium & Rare Earth Project, Nebraska, USA

Quantum acquired the Elk Creek project in South East Nebraska on May 4th, 2010. The Elk Creek project is a former Molycorp project. Molycorp left in the early 1990’s when they left all of their exploration to focus on their Mountain Pass project in California. Quantum has since taken up where Molycorp left off.  Niobium demand has increased on average 10% a year for the past decade, with growth forecast to continue in similar fashion in the coming decade.  Niobium prices have increased in line with this growth. Rare-Earth prices have also seen dramatic increases.

Based on current forecasts, Niobium production from the three current producers is undergoing expansion. CBMM in Brazil, the world’s leading producer, is expanding capacity to meet this demand.  The Niobec mine in Quebec, owned by Iamgold, is also undergoing expansion plans in hopes to triple their production levels in the next few years. Despite this increase in production from the three producers, the possibility of demand outstripping supply by the end of the decade remains, opening the doors for additional production to fulfill market needs.

In addition, the prospect of Niobium becoming a material that nations begin stockpiling for strategic purposes could also add additional demands on production. Currently, the U.S. (who import 100% of their Niobium supply), China and several EU countries have all announced their intention to begin stockpiling.

Quantum’s Elk Creek Niobium deposit is the only primary Niobium deposit in the US, and is the highest-grade, large-tonnage undeveloped deposit in North America.

Given the rapid demand growth of Niobium, the limited number of current and potential deposits, the company feels it has an excellent opportunity to secure a partner to advance the deposit towards production.

Elk Creek Highlights:

– 19.3 Mt @ 0.67%  Nb2O5 – Indicated and 83.3 Mt @ 0.63% Nb2O5 – Inferred

– 129,182,000 kg of contained Nb2O5 – Indicated  and 523,844,000 kg of contained Nb2O5 – Inferred

– Potentially one of the “largest global resources of Niobium and Rare-Earth elements”, according to USGS

– 150,000 feet of historical drill core from 113 holes drilled by Molycorp in the 1970s and 80s

– August 2011, Quantum released 3 holes that were the first holes to be drilled across the deposit- highlight: 131 m Nb2O5

– Substantial historic TREO intercepts, including 54.9m of 3.30%, contained in 155 m of 2.70%

– In September 2011, Quantum released 2 rare earth holes 2.5 km away from the main niobium zone- highlight: 68.18 m 3.32% TREO

Location

The Elk Creek Carbonatite, located in southeastern Nebraska an hour south of Lincoln. The niobium deposit is roughly 800 x 400 x 400 meters. The deposit is open in 3 directions including at depth.

elk creek niobium

rare earth highlights map

(Light green indicates niobium zones, with the core deposit area, circled in red. Purple indicates REE zones.)

Main Niobium Zone Drill Hole Intercepts from the Elk Creek Project

2011 Summer Niobium Zone Drill Program Results

-NEC11-01: 235.22 m of 0.73% Nb2O5
-Including 54.13 m of 1.17% Nb2O5

-NEC11-002: 179.18 m of 0.87% Nb2O5
-Including 131.03 m of 1.02% Nb2O5
-Including 34.16 m of 1.23% Nb2O5

-NEC11-003: 130.37 m of 0.58% Nb2O5
-Including 34.16 m of 0.94% Nb2O5

Historical Molycorp Drill Holes from Re-Sampling Program on Historic Core

Drillhole From (meters) To (meters) Interval (meters) Nb2O5%1
(meters)
EC-11 243.8 384.0 140.2 0.64
Including 300.2 324.6 24.4 1.19
EC-11 501.4 768.1 266.7 0.71 41.1
Including 696.5 768.1 71.6 1.19
EC-14 378.0 707.1 329.2 0.57 57.9
Including 378.0 445.0 67.1 0.71
621.8 676.7 54.9 0.73
EC-16 362.7 774.2 411.5 0.64 15.2
Including 551.7 682.8 131.1 0.74
707.1 774.2 67.1 0.91
EC-26 429.8 688.8 259.1 0.77 3.0
Including 554.7 597.4 42.7 1.10
615.7 688.8 73.2 0.95
EC-27 362.7 411.5 48.8 0.57 3.0
EC-28 198.1 769.6 571.5 0.68
Including 262.1 317.0 54.9 0.72
442.0 612.6 170.7 0.86
EC-29 298.7 499.9 201.2 0.99 3.0
Including 396.2 472.4 76.2 1.27
EC-30 213.4 362.7 149.4 0.65 17.4
Including 317.0 353.6 36.6 1.12
EC-30 509.0 688.8 179.8 0.60
Including 661.4 685.8 24.4 0.95
EC-31 216.4 268.2 51.8 0.79
EC-32 198.7 222.5 23.8 0.67
EC-32 576.1 603.5 27.4 0.70
1Nb2O5 by ALS Chemex of North Vancouver

The NI 43-101 report is available for public viewing on SEDAR as of May, 2011.

The map below shows Quantum’s 2011 drill holes in red and the proximity of the main niobium zone to the main rare earth zone marked by NEC11-004

dill hole location map

Rare Earth Highlights

3 Main Rare Earth Zones Identified. Quantum Drilled 2 holes in the Eastern Anomaly, Summer 2011.

– NEC11-004: 236.19 meters of 2.10% TREO – Sept 2011
— Including 68.18 m of 3.32% TREO

Eastern Anomaly – located approximately 2.5 kilometers east of the central Niobium deposit

– EC-93: 155.5m @ 2.70% TREO
— Including 54.9 m @ 3.30% TREO

– EC-55: 211.8 m @ 1.12% TREO

– EC-43: 134.1 m @ 1.22% TREO
— Including 22.9m @ 2.35% TREO
— Including 6.1m @ 5.07% TREO

Western REE Anomaly – located approximately 1,000 metres northwest of the central niobium deposit.

– EC-4: 15.2m @ 1.14% TREO

– EC-41: 112.8 m @ 1.13% TREO

Central REE Anomaly – located directly adjacent to and up to 1.6 kilometres northeast of the central niobium deposit.

– EC-17: 64.0m @ 1.19% TREO
— Including 24.4m @ 1.97% TREO

– EC-19: 50.3 m @ 1.09% TREO

– EC-21: 21.0 m @ 1.60% TREO

– EC-48: 67.1 m @ 1.26%

*Total Rare Earth Oxides (TREO) include La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3 and Y2O3. The result of the sampling to date has identified mostly Light Rare Earth Oxides (LREO) mineralization, in order of abundance: La2O3, Ce2O3, Nd2O3, Pr2O3, and Sm2O3.

Elk Creek Image Gallery

About Niobium

119-157_thumbNiobium (Nb) is an alloying agent which, when added to steel, creates a material with substantial benefits. Niobium is a rare and a soft transition metal primarily used in the production of high-grade steel. Steel containing niobium has many properties making it stronger, lighter in weight and highly resistant to corrosion. Adding niobium to steel also creates steel with a higher melting point. Ferroniobium represents over 90% of world niobium production. Molybdenum and vanadium can be substituted for niobium in some applications, but a performance or cost penalty may outweigh substitution. For many applications, such as some superalloys and oil and gas pipelines, there are no substitutes for niobium as the niobium allows for withstanding extreme pressures.

Niobium Uses: Primarily used for High Strength Low Alloy (HSLA) steel (FeNb):

Car_-_Nb_Weight_SavingsConstruction & Steel Mega-Projects: 45% of FeNb Market Car
HSLA for lightweight structures that require additional strength and corrosion resistance
High strength reinforcing bars require high yield strength and weldability

Automotive Industry: 23%
Stronger and lighter – improved fuel efficiency due to weight reduction

Oil and Gas Pipelines: 16%
Superior ability to withstand increased pressure and volumes over greater distances (substitution of niobium is not possible)

Shipbuilding: 6% of FeNb Market Bridge
HSLA allows for lighter ships with lower fuel consumption. Adds strength and weldability

Bridge_-_Nb_Weight_SavingsStainless Steel: 3%
Nb reduces corrosion and improves high-temperature behavior

Superalloys & High Strength Q&T plate: 3%
Used in the aerospace industry (jet turbines)
MRI machines (superconducting NbTi Alloy magnets)

 

 

Niobium is at the top of American Resources Risk Pyramid due to high supply concentration and its economic importance for the American Economy (See Below)

risk pyramid

Niobium Market Demand Growth:

  • Niobium production is highly concentrated in Brazil which produces (92%) the rest is produced in Canada (8%)
  • Niobium is considered a “strategic metal” by the US, as it is essential for National Security and industry
  • “Niobium demand has grown at a 10% compound annual growth rate over the last 10 years and is forecast to increase steadily going forward.” Carol Banducci, CFO, IAMGOLD
  • Only 10% of worldwide steel production contains niobium – expected to rise to as much as 20%
  • Developed countries utilize roughly 100 g/t of steel – while China only utilizes 40 g/t
  • China produces almost 40% of world steel, but currently consumes a much smaller percentage of world Niobium production than their steel production would suggest, but they are expected to grow their Niobium consumption to match steel production

Who Produces Niobium and Where:

Brazil is the world’s largest producer of niobium (92%), followed by Canada. Brazil has two of the largest niobium deposits in the world, the Araxá, and the Catalão deposits. The Araxá mine is operated by CBMM, decreasing grades are increasing operating costs at the mine. The Catalão mine owned by Anglo American Brazil may run out of ore if the deposit size cannot be increased. The third-largest producer is the Niobec deposit in Quebec, owned by IAMGOLD Corp. Niobec’s grade of Niobium is falling the deeper they are being forced to mine.

Niobium Prices Niobium prices are negotiated between buyers and sellers and does not have a spot price like most commodities. Prices have risen steadily since the year 2000 to $42 a kg in 2014. With only a few producers, the lack of new supply expected to come on stream anytime soon and increasing demand niobium prices are expected to remain high.

ALL THREE CURRENT PRODUCERS HAVE ANNOUNCED PRODUCTION INCREASES TO MEET ANTICIPATED DEMAND – We see this as a very strong vote of confidence that additional production is needed from new sources such as Elk Creek. Still this new supply will not keep up with demand. Demand will thus have to be met by one of the main development projects.

CBMM plans to increase capacity from 90,000 tpa to max capacity of 150,000 tpa by 2015, the 2 other producers Iamgold and Anglo combined have a maximum capacity of 20,000 tpa *(if their expansion plans go as scheduled)

CAGR (Compounded Annual Growth Rate) for next 5 years is expected to be 4% – 6%

Investors

QUANTUM RARE EARTH-DETAILS

See more: Details | Technical analysis | Historical prices

Quantum Rare Earth Developments (TSX.V:QRE) (QREDF.PK)

z

Ask: 0.14
Bid: 0.135
Change: +0.005 Variation
Change in Percent: +3.70% Variation
Last Trade (With Time): Jun 22 – 0.14
Last Trade (Price Only): 0.14
Volume: 359100
52-week Range: 0.11 – 0.36

Share Structure

Issued: 69.88

Warrants: 17.17

Options: 4.7

Fully Diluted* 101.1 (would provide $6.3 million in additional funds)

* following closing of Australian acquisitions

Financial Reports

2010 Reports

2010 Financials – For 3 months ended September 30, 2010

2010 MD&A – For 3 months ended September 30, 2010

2010 Financials – For the year ended June 30, 2010

2010 MD&A – For the year ended June 30, 2010

2010 Financial Statements – For the 9 months ended March 31, 2010

2010 MD&A – For the 9 months ended March 31, 2010

Please visit SEDAR for previous Financial Statements and MD&A:

http://www.sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00005127

Management and Board of Directors

Peter Dickie – President, CEO and Director
Mr. Dickie brings over 20 years of business experience with both public and private companies holding numerous senior management positions.  A graduate of both the University of British Columbia, and the University of Victoria (B.C.), his background includes 4 years in the Securities industry with Jones, Gable & Co. Mr. Dickie has served on the board of a number public companies, including Lateegra Gold Corp. where he was instrumental in acquiring the primary asset for the company which ultimately resulted in a takeover of Lateegra..

David C. Beling, P.E. – Director
Dave Beling has a unique combination of project and corporate expertise, with over 47 years of experience in the global precious metal, base metal and energy mineral sectors. Mr. Beling has significantly reviewed or was directly involved with 84 underground mines, 127 open pit mines, and 163 mineral processing plants as a consultant or while employed with Phelps Dodge, Union Oil, Fluor, United Technologies, Westinghouse, and several Canadian and US junior mining companies. Since 1981 he served as a senior executive and member of the Board of Directors of eight public mining companies. In addition to developing and managing operations, he initiated or strongly contributed to the marketing and closing of several debt and equity financings, commodity and asset sales, mergers, acquisitions and joint ventures.

Jody Dahrouge, P.Geo – Director
Mr. Dahrouge is a graduate of the University of Alberta with a Bachelors Degree in Science (Geology).  Since 1998, he has been the President of Dahrouge Geological Consulting Ltd. a company he founded.  He has worked on a variety of early stage through development projects worldwide including coal, industrial minerals, rare metals, base and precious metals, and uranium projects.  His experience, insight, and energy will provide tremendous value in the development of the Elk Creek and Archie Lake projects.

Mr. Claude Dufresne – Technical Advisor
Mr. Dufresne, Ing. graduated with a Bachelors degree in Mining Engineering from Laval University in 1991. Following his graduation, Mr. Dufresne started working with Cambior as a metallurgist. In 1996, he was transferred to Cambior’s largest operation, OmaiGold Mines Ltd., located in Guyana, S.A before being promoted to Marketing Manager. After Cambior’s acquisition by Iamgold Corp, Mr. Dufresne collaborated with Iamgold’s Corporate Development group while continuing with its Sales & Marketing activities, which included niobium and bauxite. In January 2008, Mr. Dufresne started Camet Metallurgy Inc, a joint venture company with Iamgold, which is responsible for the worldwide Sales and Marketing of Iamgold’s niobium from the Niobec mine. Mr. Dufresne is a member of the Ordredes Ingenieurs du Quebec, and of the Tantalum & Niobium International Study Center (TIC).

Jim Reynolds, Chemical Engineer – Technical Advisory Board
Jim Reynolds has a broad background as a chemical engineer in metallurgical and chemical operations in research, hydrometallurgical process development and chemical plant management covering 50 years.  Mr. Reynolds has 30 patents issued during his 28 years of consulting activities on over 80 world-wide projects. His experience includes employment with American Potash, Kerr McGee Corporation and Hazen Research, specializing in light and heavy metals processing, recycle of secondary metals, and industrial electro-chemicals. As a project manager at Hazen Research, Mr. Reynolds managed base metals and uranium laboratory and pilot programs for project pre-feasibility evaluations.

David R. Shoemaker, Mining Engineer – Technical Advisory Board
For over fifty years Dave Shoemaker has worked in the base metals, precious metals, and energy metals sectors.  Mr. Shoemaker has extensive experience in large open pit, block caving, and cut and fill operations.  Mr. Shoemaker has held the positions of Mining Engineer, Chief Engineer, Operations Superintendent at caving and open pit mines, and Manager and Vice President of Molycorp Inc. Molybdenum Group.  While working for Molycorp Inc., Hecla Mining Company, Phelps Dodge Corporation, Inspiration Consolidated Copper Co., Utica Mines Ltd., Homestake Mining Company, and as a Mining Consultant, Mr. Shoemaker has been involved in the evaluation, of over 100 mineral properties.  In summary, Mr. Shoemaker has extensive experience in mine operations, mine planning, and mine evaluation.

Mr. James Allan M.Sc. P.Eng – Director
Mr. Allan holds a BA Sc (Geological Engineering), from the University of British Columbia and a MSc (Geology, Engineering) from Queen’s University. He is a Registered Professional Engineer, belonging to the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA).
As a geological engineer, Mr. Allan has over 45 years of experience with several major mining and petroleum companies and as an independent consultant in mining exploration and exploration management, mineral property evaluation and mining geology. He has conducted and managed exploration and evaluation programs for a wide variety of mineral commodities in Canada, the United States, Latin America, the Philippines, Malaysia, Australia and the former Soviet Union including Russia.Mr. Allan also has extensive experience in the exploration for, and evaluation of rare earth deposits both as manager of exploration in Canada for a large rare earth company (Molycorp Canada) from 1982 to 1990 and as an independent consultant.

Casey Forward – CFO
Mr. Forward is an independent CGA with over 20 years of experience in both private and public companies involved in mining and business development. Mr. Forward currently serves as a director or officer of several public companies involved in the mineral resource sector.

Erin Chutter – Director
Mrs. Chutter is the President and Founder of Puget Ventures Inc., a TSXV listed mineral exploration company advancing the Werner Lake Cobalt Mine in Ontario, Canada. She is also a founder and director of two private companies. Active in politics since the late 1980s, Erin has managed and advised campaigns at three levels of government, as well as party leadership races.…

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Quantum Rare Earth Developments Corp.
Wholly owned (operating) subsidiary

Elk Creek Resources Corp.
386 Broadway
PO Box 506
Tecumseh, NE 68450…