Tasman Metals President, Mark Saxon discusses REEs and provides a TSM.V update

StrategicMetalStocks.com recently had the opportunity to discuss topics surrounding Rare-Earth Elements with Mark Saxon, B.Sc.(Hons) GDipAppFin MAusIMM MAIG, President and CEO of Vancouver based Tasman Metals, Ltd. (TSX.V: TSM).  Following is a transcript of the Q&A session:

SMS: Once the media latched onto the China monopoly in Rare Earth Elements production the mining industry seemingly went through a chaotic period with everyone scrambling to get a foothold in this budding sector.  How do you see the REE market evolving in the near future?

MS: There has been a lot of scrambling going on to gain a foothold in the REE sector over the last 6 – 12 months.  Internally in Tasman we now track more than 100 projects worldwide, a great majority of which are found within eastern Canada . 

While most of the REE’s are not as rare as the name implies, the rocks that host REE’s in mineable quantities are unusual, and have typically been previously mapped by government geological surveys and university researchers.  This suggests that most if not all key projects will by now have found their way into the hands of explorers, and we are unlikely to see significant new REE projects come to market.   

The Chinese monopoly over REE supply is genuine, the unfortunate result of decades where the western world has been comfortable farming-out strategic metals supply and technology development to its competitors.  Western governments are now recognizing this fact, and fortunately we are seeing policy development to address this critical and unsustainable imbalance.

With the markets’ attention now drawn to the REE sector, aided in part by the focus of key industry commentators like James Dines and John Kaiser, projects of merit have the opportunity to attract significant and sustained investment.  With this investment, technical hurdles may be overcome, and secure western-sourced REE supply options can hopefully be achieved. 

The scramble has now shifted, with the markets focus on the “race to production”, in particular for heavy REE’s in which Chinese supply is tight and the resource base is low.  The market for REE is not presently large, meaning market share and key off-take agreements will be secured by the first companies that achieve production, limiting market access for those who follow behind.    

SMS: Your company, Tasman Metals, Ltd. (TSX.V: TSM), is a Canadian company with exploration interests in the Scandinavian area of Europe .  How is the mining culture in Scandinavia , and what do they know of REE’s?

MS: Tasman is an REE explorer, focused on delivering a secure supply of strategic metals to the high-tech industries of the European Union.  Tasman is in the fortunate position to have secured 100% of every significant REE project in the politically-stable Scandinavian region during that “scramble” for projects you described earlier.

Scandinavia is a strong mining province having produced metals continuously for over 1000 years, and is currently the dominant European supplier of iron, gold, zinc, lead and copper.   The region is the birthplace of many major mining and mining service companies, and is consequently home to a highly skilled and experienced workforce. 

The thing that really sets Scandinavia apart is infrastructure, which is truly “second to none.”  While Sweden, Finland and Norway each extend into the Arctic circle, the warm waters of the Gulf Stream that passes the Norwegian coast leads to relatively mild conditions, with no permafrost and short winters.  Long term investments made by government, forestry and mining industries have left a tremendous legacy of all weather roads, power and water that lie in close proximity to all Tasman’s exploration areas.   

With regard to REE’s, Sweden can lay claim to being the home of these elements, as many were first discovered  there during the 18th and 19th centuries.  Cerium, erbium, holmium, lanthanum, scandium, terbium, thulium, ytterbium, yttrium were all separated and described from Swedish sourced samples, in particular by Swedish and Finnish chemists.  Furthermore, the REE mineral bastnäsite that is the principal ore mineral for REE’s globally, originates from a historic REE mine near the Swedish village of Bastnäs , where Tasman is now undertaking exploration.

SMS: Tasman recently put out an update on your lead project in Norra Karr , Sweden .  What are the highlights thus far for this project?

MS: Norra Karr in south central Sweden is Tasman’s 100% owned flagship REE project, where we have recently completed a 26 hole drilling program.  The project lies in forestry/farming land, yet the existing road network allowed us access with two-wheel drive vehicles throughout the winter.  We have thus far received and released assays from 10 of the 26 holes.

While still an exploration-stage project, Norra Karr has ticked many of the right boxes for it to be considered a potential future supplier of REE’s.  Numerous drill holes have intersected mineralization over impressive thicknesses of mineralization from surface, including 62.1 metres averaging 0.81% TREO, 1.72% ZrO2 with 56.0% HREO in drill hole NKA0910.  We have intersected REE mineralization over 800 metres of strike, so a large mineralized volume of rock is taking shape near surface.

Of note is the high percentage of the high value heavy REE’s, which makes Norra Karr stand out amongst its peers and shall contribute greatly to the value of a potential mining project.   In particular, we are encouraged by the high levels of the heavy REE dysprosium (Dy), for which the consumption fundamentals are very strong.  Dysprosium is used in high strength magnets, allowing magnetic properties of the magnets to be maintained at temperatures above 120 degrees.  

A further highlight worthy of note is the low level of radioactive metals we have found at Norra Karr.   Uranium and thorium are now known to be very low in grade, which shall greatly facilitate future permitting should the project progress towards production.

SMS: What are the next milestones you are aiming for at Norra Karr and when do you anticipate these being reached?

MS: We still have a significant amount of drilling data to release, which we expect to come to hand over the next two months, so we see a steady news flow there.  Once drilling results are in we aim to contract the calculation of an independent 43-101 mineral resource, to be published in the second half of 2010.

Our drilling results to date have given us confidence to advance Norra Karr to the metallurgical stage.  We shall begin by determining in detail the REE-bearing minerals present, and then experiment with various physical and chemical processes to concentrate and extract those minerals from the rock. 

We are fortunate to be well supported in this regard by Dr Tony Mariano, a world expert in REE mineralogy and metallurgy.  Tony will be visiting the Norra Karr site in June, and helping us to identify processing alternatives and key technology partners. 

I anticipate that key developments in this mineralogical and metallurgical work will be released over the next 6 – 12 months.

SMS: What other exploration projects is Tasman working on?

MS: We are fortunate to have a strong pipeline of projects in Tasman.  Of particular note are our 100% owned Korsnas and Bastnas projects in Finland and Sweden respectively, both of which are former REE producers.  We have extensive historic data from these sites, giving us a great opportunity to learn from the previous exploration and mining, and apply that knowledge to making new discoveries.

SMS: Recently Australia has proposed a new tax law that will impact the cash flows of companies mining in Australia .  Yourself being Australian, can you shed some light on what you know about the law and how do you think it will impact Australian Rare Earth companies?

MS: You are correct in that the Australian Labor government has chosen to exclusively target the Australian mining industry via a proposed “Resources Super Profits Tax.”  This misdirected proposal fails to recognize the role played by the Australian mining industry, as a major employer, a massive taxpayer, and the cornerstone investor in many remote and regional communities.  

Tasman is fortunate to not be currently investing in Australia , as the uncertainty surrounding this change in tax policy is placing at risk Australia ’s ability to attract funding for major resource projects.  The effect of this policy on Australian rare earth companies won’t be revealed until they begin production – should this tax law be passed, and should the projects be highly profitable, the Resources Super Profits Tax will apply. 

SMS: So in summary, what are the key factors that set Tasman apart?  

MS: Tasman is a young company, but has plenty of features that define it as a unique investment opportunity. 

Our focus on REE projects in the mining-friendly jurisdictions of Scandinavia give us the capacity to provide a secure domestic REE supply option to Europe’s expanding green-tech and high-tech industries.  The established infrastructure of this region, the local skilled workforce and supportive government policy enable Tasman to progress both quickly and cost effectively, giving us the capability to hit the target of being one of the first heavy REE producing western companies.        

Tasman’s exploration portfolio is well advanced, with the flagship Norra Karr project plus two former REE producing sites placing us ahead of many of our competitors.  Norra Karr is beginning to reveal its potential, with an extensive area of heavy REE enriched mineralization now drill defined, encouraging us to take the project to the metallurgical research stage immediately.  The low radioactivity of Norra Karr is a bonus, simplifying the permitting pathway to potential future production.   

Furthermore, Tasman has positioned itself well corporately, with highly experienced staff and consultants and a treasury adequate to allow the company to achieve its immediate goals.  Tasman is also fortunate to have attracted the attention of key market commentators James Dines, John Kaiser and Brien Lundin, who have contributed greatly to the markets awareness of the Company.