REG - East Star Resources - Drilling to Commence on Rare Earths Project

East Star ResourcesAnnouncement

12/10/2022 07:01

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RNS Number : 5264C  East Star Resources PLC  12 October 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
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12 October 2022

East Star Resources Plc

("East Star" or the "Company")

Drilling to Commence on Rare Earths Project, Kazakhstan

East Star Resources Plc (LSE:EST), the Kazakhstan-focused gold, rare earths
and copper explorer, is pleased to announce that all necessary approvals to
commence fieldwork at the Talairyk heavy rare earths (HREE) project in the
Kostanay region of Kazakhstan have been received and drilling will commence
imminently - several months ahead of schedule.

Highlights:

·    1,000m of Reverse Circulation (RC) drilling to confirm historical
grades of the Ionic Adsorption Clay (IAC) hosted deposit

·    Samples to be sent for ICP analysis and leach test work to confirm
historical grades and the potential for economic recovery of rare earth
elements

·    Approvals from government authorities to commence fieldwork received
much faster than expected, demonstrating regional support for new projects

·    Drilling programme designed and managed by independent consultants
MSA-Minerals Consulting Ltd (''MSA''), to ensure speed of execution and
correct QA/QC procedures in case of future resource conversion

 

Alex Walker, East Star CEO, commented:

"We are extremely happy to be able to drill the Talairyk licence this month so
that assay and leach test work can commence over the winter period. This means
that with positive results we can hit the ground running next year, in the
spring, to implement a more significant drill programme designed to convert
the historical resource to JORC and test the huge strike potential of this
deposit. The timing could not be better with all eyes focused on future supply
of these metals which are so critical to the energy transition.

We're also delighted with the level of support received from local government
and service providers. Stakeholders have pulled out all the stops to get this
project drill-ready so quickly and have confirmed they will provide  further
such support as the project progresses.''

 

Talairyk Project Highlights

 

·    Project comprises Talairyk and Talairyk 1 licences covering 144.7 sq
km

·    East Star farming in for up to 90% ownership linked to exploration
expenditure

·    19,962 tonnes of contained Total Rare Earth Oxides (TREO) including
4,300 tonnes of yttrium oxide at average of 7.5m from surface (1994 resource
model)

·    Average 786g/t TREO in IAC profile up to 58.6m thick - same
geochemical signature as the IACs of South China from where most of the
world's HREEs are currently supplied

·    Database includes 128 core holes and 61 auger holes for 3,755 samples

·    Exploration upside within the licences across similar weathering
profiles over prospective basement lithologies and with potential for
additional regional expansion

·    IAC peers generally have lower CAPEX and lower OPEX than hard rock
rare earth projects and a higher average basket price

 

MSA-Minerals Consulting Ltd

 

MSA has been commissioned by East Star to assess the local geology and
historical data of the Talairyk Rare-Earth Element (REE) deposit and to design
a drill plan with the appropriate drilling methodology and sampling procedure
suited to the exploration of a shallow, IAC-hosted REE deposit. The objective
is to drill in accordance with the Australasian Code for Reporting of
Exploration Results reporting code (JORC, 2012) for the purpose replicating
historical results to an international standard, as well as to gain
representative samples for both assay and leach test work. MSA was guided by
an REE expert and Mineral Resource geologists have been consulted to review
the planned collar locations and selected drilling and sampling methodology.

 

Ionic Adsorption Clays (IACs)

Potentially economically extractible IACs are rarely found outside of South
China with only a few in South East Asia in production today and
exploration/development projects in Australia, Brazil, Chile and Uganda. IAC
deposits are comparatively rich in HREEs and are a primary source of China's
and therefore the world's HREE production. IAC deposits offer several
advantages to the more commonly occurring hard rock REE deposits where the
rare earths are mostly hosted in complex mineral associations. These
advantages include:

o  Lower CAPEX: Deposits are shallow and free dig clays keeping the footprint
small, the pre-strip ratio low and with simple, conventional machinery and
material handling methods. Processing generally requires no grinding or
milling, removing these costly and energy-intensive mills from the processing
circuit

o  Lower OPEX: Generally, the deposits are amenable to standard leaching
techniques with weak electrolyte solutions, such as ammonium sulphate (widely
used as a fertilizer for alkaline soils) and sodium or magnesium chloride

o  Negligible radioactivity: Radioactive elements such as uranium and thorium
occur commonly in hard rock REE projects. In IACs, the radioactive elements
have been mostly removed by the weathering process along with the lower value
light rare earth elements

o  High-value basket of product: The HREE element market is small and
commercial production is restricted to very few companies while the demand in
the high-tech industry has expanded

HREE Supply and Demand

Rare Earth Elements  are required for numerous  high-tech devices, such as
 high-performance magnets for wind turbines or lighting products such as
 energy saving bulbs. The more valuable HREEs like Dysprosium and Terbium are
a particularly critical resource. These HREEs are currently almost exclusively
supplied by IACs and almost completely from South China where the REEs are
adsorbed on clay minerals and can be recovered with high extraction yields by
monovalent salt solutions using the concept of ion exchange.

The Talairyk Project

The Deposit

 

The thickness of the ore deposit varies along the historically tested sections
from 5.88m to 58.6m, averaging 19.46m. The average overburden thickness is
7.38m and the average content of yttrium oxide in the deposit is 169 g/t with
other rare earth oxide elements at 617 g/t for 786 g/t or 0.078% TREO. Using a
cutoff grade of 100 g/t, resources of yttrium oxide were calculated as 4,300
tons and TREO amounted to 15,662 tons.

 

Historical Exploration

 

Geological surveys of the site have been done since 1916, however, the first
prospecting work  was not carried out until 1972. In 1988-89, a magnetic
survey on a scale of 1:5000 and a gravity survey at a scale of 1:10000 was
conducted over a 50x10m and 200x50m network. From 1987-1991 prospecting work
was carried out resulting in discoveries of yttrium and REEs. From 1991-1994
prospecting and appraisal work was carried out to establish the size of the
ore zone in plan and in depth, the morphology and conditions of occurrence of
ore bodies, the qualitative characteristics of ores, and the hydrogeological
conditions. This latest work was conducted by the State Holding Company,
"Marzhan", and Joint Stock Company, "Turgai Geological Exploration
Expedition".

 

The expedition drilled vertical core wells across the strike of the ore zone
on a 200mx50m grid to an average depth up to 75m including three
hydro-geological wells. 128 holes were drilled by core drilling for 6,022m and
61 holes by auger drilling for 903m. 3,755 samples were taken. On average, the
core recovery in the wells ranges from 68% to 76%.

 

Samples were subjected to the following types of analyses:

·    Semi-quantitative spectral analysis for 19 elements

·    XRF analysis for yttrium, zirconium, tin and niobium

·    Approximate quantitative analysis by a special method for the sum of
rare earth oxides

·    Grain-size analysis of weathering crust

·    Lithological analysis of weathering rocks

 

Geology

 

The studied area is in the northern part of the Ulutau meganticlinorium and is
confined to the southern tip of the Sauktal massif of the Arganty uplift. The
uplift is composed of Proterozoic metamorphic complex, gneissogranites and
Paleozoic granitoids.

 

The rocks of the Talairyk suite compose the dome of the Ulutau anticlinorium,
and in the area of work it is divided by the Sabasaldy-Turgai granitoid massif
into two bands: western and eastern. The Talairyk Formation includes three
subformations: lower, middle, and upper. The lower subformation is represented
by mica gneisses, two-mica-plagioclase gneissic schists, thick (100- 300m)
units of amphibolites, garnet amphibolites, and plagioclase-amphibolite
schists. The thickness of the subformation is 600-800m.

 

In the geological structure of the region, bodies of igneous rocks of
different composition and age make up about 75% of the work area. According to
geological data, three complexes are distinguished:

1. Middle Proterozoic complex of granites (granite-gneisses)

2. Ulutau Complex of basic and ultrabasic rocks of Late Upper Proterozoic to
Early Cambrian age

3. Late Ordovician - Early Silurian complex of granodiorites - granites

 

The Middle Proterozoic complex of granites is represented by the Souktal
granite-gneiss massif, a Precambrian complex located in the Ulutau
structural-facies zone and is also host to the Talairyk deposit in the
weathering crust.

 

In the weathering crust the main carriers of yttrium and rare earths are
kaolinite, hydromuscovite and to a lesser degree, plagioclase. The average
content of minerals in the weathering crust are quartz (40%), kaolinite (42%)
and sericite (18%).

 

The average thickness of the weathering crusts is 25m. In some zones, the
depth to basement is up to 100m.

For further information visit the Company's website at www.eaststarplc.com
(http://www.eaststarplc.com) , or contact:

 

East Star Resources Plc

Alex Walker, Chief Executive Officer

Tel: +44 (0)20 7390 0234 (via Vigo Consulting)

 

Peterhouse Capital Limited (Corporate Broker and Placing Agent)

Duncan Vasey / Lucy Williams

Tel: +44 (0) 20 7469 0930

 

Vigo Consulting (Investor Relations)

Ben Simons / Peter Jacob

Tel: +44 (0)20 7390 0230

 

About East Star Resources Plc

 

East Star Resources is focused on the discovery and development of gold, rare
earth, and copper deposits in Kazakhstan. With an initial nine licences
covering 1,687 sq km in three mineral rich districts, East Star is undertaking
an intensive exploration programme, applying modern geophysics to discover
minerals in levels that were not previously explored. The Company also intends
to further expand its licence portfolio in Kazakhstan. East Star's management
are based permanently on the ground, supported by local expertise, and joint
ventures with the state mining company.

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The person who arranged for the release of this announcement was Alex Walker,
CEO of the Company.

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