Tantalus Rare Earths AG

EANS-News: Tantalus Rare Earths AG
Update on work progress and new results from Target 1, 3, 4 and 5 (with document)

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Company Information/RESOURCE ESTIMATE

Düsseldorf (euro adhoc) - Tantalus Rare Earths AG

(Duesseldorf, 12 October 2011,Tantalus Rare Earths AG) The Directors of Tantalus
Rare Earths AG ("TRE"), a German company exploring an extensive area of
secondary rare earth mineralisation at surface and primary, near-surface bedrock
rare earth ("REE") mineralisation in north-western Madagascar (the "TRE
Project"), are pleased to announce a general update on the project, with a
special emphasis on the in-house resource estimate and the metallurgy.


* Initial leaching tests on argillaceous laterites suggest the Tantalus clay
mineralisation is comparable to the ion absorption clays of southern China which
provide most of the world's current heavy rare earth supplies, with total
recoveries averaging 79%.

* A preliminary in-house resource estimate of surface or near surface
mineralisation  for parts of Targets 1, 3 and 4 has been completed in
conjunction with SRK Consulting (www.srkexploration.com) totalling 55 million
tonnes of mineralisation, containing 46,000 tonnes of rare earth oxides ("REO")
with an in-ground value of USD$8.28 billion (US$180 per kilo average) using Q2
2011 prices.

* Unlike other REO projects, approximately 20% of the total REO are the most
valuable heavy REOs.

* Near surface high-grade bedrock mineralisation with rare earth bearing
carbonates has been discovered in Targets 4 and 5 with the assays revealing a
basket value for the contained rare earths of US$4,219 and  US$4,673 per tonne
of ore respectively.

* The Target 4 and 5 mineralisation also contains significant amounts of
scandium, a highly sought after element being used increasingly in fuel cells
and high strength aluminium alloys.

Commenting on these results, Ivan Murphy, Executive Director of Tantalus Rare
Earths AG said:

"The Tantulus project continues to emerge as one of the largest potential
resources of Heavy Rare Earth Oxides outside of China. Only a small proportion
of the project area has been explored to date, and not surprisingly, the
excellent results we have produced so far is generating considerable interest
from Tier 1 financiers and end users."

Wolfgang Hampel, COO of Tantalus Rare Earths AG added: 
"I am delighted that we have received confirmation that our REE bearing
argillaceous laterites have at least in parts similar characteristics to the
clay deposits of Southern China. The massive potential revenue per tonne figures
combined with the fact that we have, only explored a small portion of the
project area, provides us with confidence that our Tantalus Project will support
a very large and extremely profitable mining and processing operation which will
supply heavy rare earths for many years. " 


Argillaceous laterites - Ion Adsorption Clays
Initial leaching tests on the Tantalus REE bearing argillaceous laterites have
returned very positive results and some of the clays tested are indeed
comparable to the so-called ion adsorption clays from Southern China. The
overall recovery was 79 %, which is excellent when compared to many other
projects. The ion adsorption clays from Southern China - also called "weathered
crust elution-deposited rare earth ores" are the World's almost exclusive source
for heavy rare earths. The ores are generally low grade and are mined using
low-cost, in situ leaching methods.

At the same time TRE's subcontractor is pursuing more testwork on the
argillaceous laterites using conventional gravity and magnetic separation
techniques. A new set of concentrates has been received and will now be assayed
and studied mineralogically.

More REE bearing clay samples are getting sent regularly to TRE's partners and
consultants to check their ion absorption capacities. 

New high grade mineralisation from Targets 4 and 5
A first sample from the new high grade REE mineralisation discovered on Target 4
was studied using a scanning electron microscope (SEE). Although the new high
grade mineralisation found on Targets 4 and 5 was encountered in different
geological settings, the grades and the repartition of the various REE are
almost identical. The TREO grade for Target 4 was 1.84% and 1.68% for Target 5.
Cerium is particularly low, whereas Nd, Sm, Pr, La, Y, Gd, Eu, Dy and Tb are
particularly high, see Table 1. Uranium and thorium grades are exceedingly low. 

The mineralogical study has shown that the REE mineralisation is characterized
by fine grained, complex REE fluoro-carbonates filling in interstices of a
volcanic breccia, see Figure 1 and 2. Surprisingly, the analytical device of the
SEE has also shown the presence of noteworthy amounts of scandium. Scandium is
closely related to rare earths and often added to them because of the chemical
similarities and geological setting where it occurs. Scandium is increasingly
used in fuel cells and high strength aluminium alloys. As scandium is not
covered by the assay method currently applied (Alschemex code ME-MS81), a
certain number is currently getting re-assayed to evaluate the potential for
scandium mineralisation. Samples taken in 2008 on Target 1 were assayed for
scandium but showed only low grades. As the geological setting of this target is
different, scandium could occur in economic quantities. 

This new type of mineralisation is interpreted as being a precipitate of REE
bearing aqueous solutions derived from the weathering of overlaying REE bearing
strata (a "REE calcrete"). The lateral extent and thickness of this REE bearing
layer is not yet known but is subject to a drilling programme starting later
this month. This mineralisation type is most advantageous as ore processing can
be done by simple acid leaching methods. 

Table 1: REE composition and basket value of two new bedrock mineralisation
types found at Target 4 and 5. 

For technical reasons the table is only shown in the attached pdf. 

Figure 1: Scanning electron microscopic photo of volcanic breccia, the bright
parts are REE-Sc-bearing fluoro-carbonates filling interstices between quartz
and other mineral grains.

For technical reasons the figure is only shown in the attached pdf. 

Figure 2: Scanning electron microscopic photo of globular REE-Sc-bearing
fluoro-carbonates (close-up of of Figure 1).

For technical reasons the figure is only shown in the attached pdf. 

Primary mineralisation
Although the REE mineralisation on Target 1 is rather low grade, the Company
believes the ore could be mined economically as the majority of REE bearing
minerals is present as acid leachable carbonates in an inert matrix. The Ta, Nb
and Zr bearing minerals could probably be concentrated using gravitational

TRE is currently identifying suitable laboratories to carry out testwork on the
primary mineralisation.

In the meantime, exploration will now focus on expanding the high-grade resource
discovered at Targets 4 and 5. 
In conjunction with SRK Consulting, preliminary resource estimates have been
calculated for parts of Target 1 (Ampasibitika), Target 3 (Befitina) and Target
4 (Caldera). The resource estimates are preliminary and partial in nature
because all three targets are being actively evaluated and the extents of the
estimated areas are dictated by the availability of results.
The preliminary resource estimates were calculated using the available pitting,
drilling and topographical data. Datamine software was used to create sectional
strings and wire-frames that were linked together to form surfaces. These
surfaces were then developed into block models, into which grades were
The preliminary resource estimates have resulted in the figures shown in Table
2. It is critical to note that these figures are estimates and tentative in
nature. Their accuracy will improve as more data are obtained and incorporated
into revised versions of the estimates.
Table 2: The preliminary resource estimate figures.

For technical reasons the table is only shown in the attached pdf. 

Very significantly, the preliminary resource estimates only encompass a small
proportion of the targets that are being actively evaluated, and a very small
part of the much larger area that is underlain by the Ambohimirahavavy igneous
complex (Figure 2).
Furthermore, the thickness of the mineralised zones has yet to be fully realised
due to the limitations on the depths to which the pits can be excavated and the
lengths of the drill holes.

Figure 2: Work progress until 5 October 2011 and areas for potentially REE
bearing argillaceous laterites. 

For technical reasons the figure is only shown in the attached pdf. 


Work is progressing rapidly on 5 of the 6 target zones. The initial field
programme for 2011 should be finished before the end of this year. However,
outstanding results may dictate a change in strategy on some of the prospects.
For a total of 5,452 samples results have been received so far from Alschemex,
results for 522 samples are pending and a further 2,502 samples are currently on
the way to the laboratory. 
Table 3: Work programme for 2011 and progress until 5 October 2011.

For technical reasons the figure is only shown in the attached pdf. 

Work progress on Target 1 (Ampasibitika Prospect)
Diamond drilling is almost completed now on Target 1. To-date, 268 diamond drill
holes have been completed, totalling 19,615m drilled meters. The remaining
1,300m (19 holes) will be finished before Christmas 2011 using a single drill
rig. The other light weight, man portable drill is currently transported to the
Caldera Prospect (Target 4).  

The Company has received new assay results from ALS Chemex, Canada for 9 drill
holes. The new results confirm that the target is covered by a continuous layer
of REE-bearing argillaceous laterites that are underlain by multiple mineralised
dykes and veins that can be followed over several kilometres strike length. 

The drilled widths of the REE-bearing argillaceous layer average 10.24 m which
corresponds to a true (vertical) thickness of approximately 9 m. The TREO grades
vary between 608 ppm and 1,732 ppm; the ratio of HREO to TREO varies 16 and 22
%, which is consistent with earlier results. Uranium and thorium values continue
to be very low.

Each drill hole has intersected between 1 and 5 different mineralised veins. The
widths vary between 1 metre and 17 m. The best TREO (Total Rare Earth Oxides)
grades attain 0.34 %. Ta, Nb, Zr, Ga and Sn are also enriched. The overall ratio
HREO/TREO is 21/79. Uranium and thorium grades are low.   

Table 4: Summary table showing the weighted averages for TREO and the percentage
of HREO from 11 drill holes on Target 1.

For technical reasons the table is only shown in the attached pdf. 

Work progress on Target 2 (Ambaliha Prospect)
This 8.5 km² sized prospect is characterized by a set of three sub-parallel
radiometric anomalies that can be followed for over almost 8 km. Outcrop
sampling in 2009 has confirmed the presence of primary REE mineralisation hosted
by a series of alkaline granites. It is suspected that this primary
mineralisation is equally overlain by REE bearing argillaceous laterites. 

Out of the initial 260 pits/window sampling holes planned on this prospect, 32
have been finalized as yet; another 10 are currently in progress. The maximum
depth of the pits is 10m; the average depth is 5.70m. All pits have been channel
sampled; no results have been received to date. At the current speed, all
pitting/window sampling should be finished around mid-December 2011. 

Work progress on Target 3 (Befitina Prospect)
Earlier work on this prospect, including a reconnaissance soil geochemical
survey, trenching and limited pitting has indicated the presence of a continuous
REE bearing layer of clays overlaying a series of presumably alkaline rocks. The
15 km² sized prospect is subject to an extensive pitting/window sampling
programme totalling some 440 sampling points. 

Until this week, 259 pits out of 440 pits have been excavated and sampled,
another 10 are currently in progress. The completion of the programme is
scheduled for early December 2011. 

Results recently received for 30 pits underline the potential for REE bearing
argillaceous laterites in economic quantities and grades, see Table 5. In more
than one third of the pits, pitting ended in mineralisation. Further to that, in
many of these pits the grades and the HREO percentage increase considerably with
depth. As pitting is limited to a maximum of -10m due to security reasons,
diamond drilling will be carried out at a later stage to examine the full extent
of the mineralisation. 

Table 5: Summary table showing the averages for TREO and the percentage of HREO
from 30 pits on Target 3.

For technical reasons the table is only shown in the attached pdf. 

Work progress on Target 4 (Caldera Prospect)
Pitting has resumed on the 31 km² sized prospect after the completion of 2 major
trenches on the new high grade bedrock mineralisation announced earlier.  Almost
200 pits out of the 385 pits planned have been finished to date. The remaining
pits will completed by December 2011. 

The results received from Alschemex for 25 further pits (see Table 6) underline
the economic potential of this huge prospect. In almost 50% of the pits, pitting
stopped in mineralisation as either the maximum depth of 10m was reached or a
high groundwater level was encountered. Also, in many pits the grades and the
percentage of HREO increase considerably with depth. The highest overall grade
was 0.25% TREO, the highest percentage of HREO in the argillaceous laterites
reached 33 %. 

Currently, a new fly camp is installed in the caldera and diamond drilling will
commence this month. The diamond drilling programme not only targets the REE
bearing argillaceous laterites but also the new type of high grade
mineralisation which apparently underlies the clays. The full extent of high
grade mineralisation is not yet known. 

Table 6: Summary table showing the averages for TREO and the percentage of HREO
from 25 pits on Target 4.

For technical reasons the table is only shown in the attached pdf. 

Work progress on Target 5 (Ampasibitika South Prospect)
Pitting on this prospect, which is the southern continuity of Target 1, will
soon be completed.  New assay results from this area are expected later this
month. Once pitting is completed here, the teams will move on to the adjacent
Target 4 to support the other pitting teams.  


At the current progress rate, the company plans to publish updated figures on
resources and grades every 4 - 8 weeks. By the end of 2011, TRE expects to be
able to delineate a low grade resource in the range of 300 to 500 million

Field work in the coming months will concentrate on finalizing the
pitting/window sampling programme on the various targets. Special emphasis will
be made on Target 4, the Caldera, The geomorphology and geology of this target
support the development of a very large, deeply weathered deposit of REE bearing
argillaceous laterites. The discovery of a leachable high grade mineralisation
at shallow depths is a further highlight of this target.

Parallel to the field work, every effort necessary will be undertaken to
complete the metallurgical testwork on the various ore types in order to define
a NI43-101 compliant resource estimate. 


TRE's local subsidiary Tantalum Rare Earth SARL ("TREM") has rapidly become one
of most active mineral exploration companies in Madagascar. As the company
focuses more and more on establishing a massive NI43-101 compliant resource, an
increase in staff and new fields of activity for the existing staff are planned.
In total, TREM has currently 37 persons under contract. 

Mr. Wolfgang Hampel
The Chief Operating Officer of Tantalus Rare Earths AG and Co-Director of
Tantalum Rare Earth SARL will continue overseeing all technical and geological
aspects of the project but will emphasize his work on coordinating the company's
mineralogical and metallurgical testwork. There are at least three different
types of rare earth mineralisation present on the project area: primary
vein/skarn hosted, secondary laterite/clay hosted and presumably secondary, high
grade mineralisation at shallow depths. Each of these mineralisation types has
different mineralogical, petrographical and chemical characteristics and
requires different approaches as to produce intermediate REE concentrates. 
Mr. Montaharison Rakotoandriana
Mr. Rakotoandriana, who is the second Co-Director of Tantalum Rare Earth SARL,
will focus on logistical aspects of the project and the relationship with the
local administration. With an ever growing number of samples sent to
laboratories, consultants and partners worldwide, and more technical equipment
imported into the country, the logistics become increasingly important and

Dr. Dominique Rakotomanana
Being one of the renowned specialists on the geology of Madagascar, Dr.
Rakotomanana will continue organising the exploration programme and being in
charge of external relationships on all administrative levels. Further to that,
he will train the Malagasy junior geologists in all technical and theoretical

Mr. Chris Barrett
Mr. Chris Barrett will be in charge in developing and structuring the fast
growing database and liaise with the TRE's consultants SRK Consulting Ltd. in
order to establish a NI43-101 compliant resource estimate. The database is
constantly being updated and new resource estimates are expected every 4-8
weeks. Additionally, Chris will carry out field work on the various prospects
and train the Malagasy technical staff. 
Technical Team Madagascar
In order to maximise the field work progress, TREM has hired 20 Malagasy
geologists, most of them junior geologists. They are either based in fly camps
at the various prospects or in Ambanja where the company's sample preparation
laboratory is situated. Further to the geologists, a geophysicist/GIS
specialist, an environmentalist and a laboratory manager are employed.
Support Team Madagascar
This comprises administrative staff in Antananarivo and Ambanja for logistics
and accounting, drivers, laboratory assistants, guards and others.

Local Labour Force Madagascar
TREM is one of biggest employers of the region. Depending on the type of field
work carried out, TREM employs up to 260 persons from the Ampasindava Peninsula.
They are mainly employed for the preparation of drill pads, the moving of drill
rigs and pitting. Others are employed at TREM's reforestation programme or as
guides, porters and guards. The impact on the local economy is substantial. 

New Staff
TRE considers hiring more technical expatriate and local staff in the near
future. This includes further geologists, mining engineers and others. 

Notes to Editors

About Tantalus Rare Earths ("TRE")
TRE is a German incorporated holding company whose subsidiaries are engaged in
the exploration and development of rare earths. TRE's shares are quoted on the
Open Market of the Frankfurt Stock Exchange.
TRE's principal asset is an exploration project located in north-western
Madagascar and comprises rare earth-tantalum-niobium-zirconium-hafnium enriched
dykes and sills and Rare Earth Element ("REE") bearing argillaceous laterites
derived from the weathering of underlying alkaline intrusives.

There are numerous indications that most of the alkaline intrusive bodies within
the concession are overlain by REE bearing argillaceous laterites. TRE is
therefore considering the whole area underlain by alkaline intrusives (150 to
170 sq km) as prospective for secondary REE mineralisation in the weathering
The exploration programme aims to define the primary (vein/skarn hosted) and
secondary (argillaceous laterites) mineralisation present on the concession
towards a NI 43-101 compliant mineral resource estimate and support a detailed
feasibility study towards mine development and production.

Tantalus Rare Earths AG
Berliner Allee 12
40212 Düsseldorf
Telefon: +49 (0)211 52391 430
Telefax: +49 (0)211 52391 200
e-Mail: contact [at] tre-ag.com
Internet: http://www.tre-ag.com

Attachments with Announcement:

Further inquiry note:
For further information contact:
Ivan Murphy, Vorstandsmitglied              Tel: +44 (0) 208 566 1579
Ana Ribeiro, Blythe Weigh Communications    Tel: +44 (0) 207 138 3206   
                                              or +44 (0) 7980 321 505

end of announcement                               euro adhoc 

Attachments with Announcement:

company:     Tantalus Rare Earths AG
             Berliner Allee 12
             D-40212 Düsseldorf
phone:       +49 (0)211 52391 430
FAX:         +49 (0)211 52391 200
mail:        contact [at] tre-ag.com
WWW:      http://www.tre-ag.com
sector:      Holding companies
ISIN:        DE000A0SMSL4, DE000A1KRQE7
stockmarkets: free trade/entry standard: Frankfurt 
language:   English

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