Matamec Explorations inc.
TSX VENTURE : MAT

Matamec Explorations inc.

January 20, 2011 13:42 ET

Matamec Announces a 42% Increase in TREO Indicated Resources at its Zeus Property

MONTREAL, QUEBEC--(Marketwire - Jan. 20, 2011) - Matamec Explorations Inc. ("Matamec" or the "Company")(TSX VENTURE:MAT) announces that it has received an updated NI 43-101 resource calculation from SGS Canada Inc. – Geostat geological group ("SGS Geostat") for the Kipawa deposit located on its Zeus property. For reference, the original resource estimate, dated May 20th 2010, has been made available on SEDAR since Septembre 17th 2010.

Press Release Highlights

  • SGS Geostat considers that the deposit is located between surface and a depth of 90m and is continuous over a distance of 1.45 kilometers, a width of 200 metres and a thickness of 50 meters; Matamec believes that the location of the deposit, outcropping at the top of a small hill, will allow a reduced environmental footprint as well as lower operating costs;

  • In this latest estimate, the resource has been considered under two scenarios: 1) a resource with a 0.50% ZrO2 cut-off, or 2) a resource with a 0.016% Dy2O3 cut-off. Under Scenario 1, indicated resources are estimated at 67,200 t of TREO while inferred resources are estimated at 53,300 t TREO. This represents a 42% increase in indicated resources compared to the May 20th 2010 estimate;

  • Still under Scenario 1, indicated resources of Dy2O3 are estimated at 2,400,000 kg, Tb2O3 resources at 400,000 kg and Y2O3 resources at 14,700,000 kg, while inferred Dy2O3 resource are estimated at 1,900,000 kg, Tb2O3 resources at 300 000 kg and Y2O3 resources at 12,100,000 kg;

  • A definition drilling campaign is presently underway. This campaign main objective is the improvement of resource quality, converting the majority of inferred resources into indicated (see our December 2nd 2010 press release);

  • Matamec recently announced a 89.2% recuperation of rare Earths from whole rock from Kipawa's Eudialyte Zone (see our world premiere announcement in the October 18th 2010 press release), and metallurgical test are presently underway at SGS Lakefield on concentrates from the Eudialyte zone. The physical characteristics of the Kipawa ore allow for low-cost chemical extraction, which gives it a competitive edge against current rare earth producers.

  • A scoping study is being prepared by the Roche engineering firm (see our Septembre 9th press release).

  • Given the deposit's significant yttrium and heavy rare earth enrichment, Matamec intends to target the expending permanent magnet and phosphor world markets.  Indeed, prices for 99% pure Tb2O3 have recently risen to 520$/kg, 300$/kg for Dy2O3 and 70$/kg for Y2O3 (see our June 17th press release).

Andre Gauthier, president of the company, comments that: "With the beginning of the 3rd drilling campaign announced on december 2nd 2010 and the 23 DDH completed to date in that campaign, we are confident that we will soon see the majority of resources announced today converted to indicated. Considering the encouraging results we've had in our metallurgical tests, we feel that our current resources, and our heavy rare earth and yttrium resources in particular, clearly show the defining importance of the Kipawa deposit in the rare-earth market."

The Zeus heavy rare earths-yttrium-zirconium Property - Kipawa deposit

The Zeus heavy rare earths-yttrium-zirconium property is located close to infrastructures and is easily accessible via a network of forestry roads. It is located 160 kilometres south-west of Rouyn-Noranda and 65 kilometres east of the town of Temiscaming. The property is 100% owned by Matamec and is composed of 300 designated claims covering more than 17,600 hectares in the Kipawa Alkalic Complex. It includes at its heart the Kipawa deposit, also known as the Sheffield Zone. This deposit had historical yttrium and zirconium resources circa 1990, with its first NI 43-101 resource calculation in May 2010 (available on SEDAR).

Updated NI 43-101 resources

Detailed results of the updated resource calculation can be found in the following two tables. Resources are presented under two scenarios (>0.5% ZrO2 and >0.016% Dy2O3) with two categories each (indicated and inferred). Heavy rare earth oxides (HREO), total rare earths oxides plus yttrium (TREO), yttrium, zirconium and tonnages are also provided.

The mineralization is located inside a syenite unit. The syenite dips 20 degrees to the south-west and varies in true thickness from 40 to 65 meters. Three TREO enriched layers are found within it and vary in true thickness from 2 to 28 meters. These 3 layers form the TREO enriched geological zone. The non TREO enriched portions of the syenite are referred to as ZrO2 geological zone.

Scenario 1 : TREO resources with a 0.5% ZrO2 cut-off. November 29th 2010
Category Geological Zone Metric tonnes ZrO2 % TREO* % HREO** % Y2O3 % (H+Y)/TREO*** %
Indicated TREO enriched 10,340,000 0.929 0.447 0.048 0.100 33
ZrO2 Zone 19,770,000 1.015 0.106 0.012 0.022 32
Total 30,110,000 0.986 0.223 0.024 0.049 33
Inferred TREO enriched 8,740,000 0.997 0.467 0.051 0.108 34
ZrO2 Zone 12,130,000 1.007 0.103 0.011 0.022 32
Total 20,860,000 1.003 0.255 0.028 0.058 34
 * : TREO sum of all rare earths in oxides plus yttrium in oxide.
** : HREO sum of all heavy rare earths in oxides (Terbium to Lutetium).
*** : H+Y : HREO plus Y2O3.
 
 
Corresponding tonnages
Category Geological Zone ZrO2 t Diff. **** TREO* t Diff. ****   HREO** t   Diff. **** Y2O3 t   Diff. ****
Indicated Total 296,700 +43% 67,200 +42%   7,300   +43% 14,700   +44%
Inferred Total 209,200 +15% 53,300 –14%   5,800   –13% 12,100   –14%
 **** : Increase compared to resources calculated on May 20th 2010 (negative for a reduction)
 
 
Scenario 2 : TREO resources with a 0.016% Dy2O3 cut-off. November 29th 2010
Category Geological Zone Metric tonnes ZrO2
%
TREO
* %
HREO
** %
Y2O3
%
(H+Y)/TREO
*** %
Indicated TREO enriched 4,920,000 0.883 0.607 0.064 0.136 33
Inferred TREO enriched 4,260,000 1.008 0.628 0.070 0.149 35
 * : TREO sum of all rare earths in oxides plus yttrium in oxide.
** : HREO sum of all heavy rare earths in oxides (Terbium to Lutetium).
*** : H+Y : HREO plus Y2O3.
 
 
Corresponding tonnages
Category Geological Zone ZrO2 t TREO* t HREO** t Y2O3 t Diff ****
Indicated TREO enriched 43,400 29,800 3,100 6,700  
Inferred TREO enriched 43,000 26,700 3,000 6,400  
**** : May 20th 2010 resources are not available at this cut-off

Scenarios 1 and 2 are to be considered separately since resources listed in Scenario 2 are already included in Scenario 1.

Modelling of the NI 43-101 Resources by SGS Geostat

SGS Geostat received a final version of the data on November 15th 2010. The methods used for this estimate are the same as those used for the previous estimate, namely inverse distance squared with indicated resources requiring a drill grid of 50m. Resources extrapolated beyond 30m, as well as calculated rare earth values on historic drill holes, are considered inferred. The database used consists of 12 discontinuous trenches (in 55 continuous parts) and 81 DDH (30 drilled in 1988-1990 by Unocal Canada Ltd., 31 drilled in 2009 by Matamec and 20 drilled in 2010, also by Matamec) totalling 6,317.19 meters drilled and 630.64 meter of channel samples. Note that 4 historical DDH are not being included in this dataset as the information from their 2009 twins is considered more accurate. A total of 4327 analyzed intervals were used for the calculation.

Yann Camus (Eng.) engineer for the independent firm SGS Canada Inc. - geological group Geostat ("SGS Geostat ") is the qualified person under NI 43-101 standards, which supervised the preparation of the resource estimate. Aline Leclerc (geo) and Vice-President Exploration of Matamec, qualified person under NI 43-101 standards for the project Zeus, oversaw the preparation of the scientific and technical information. Together, they have verified the information in this press release.

Winter 2010-2011 Drilling Program

Matamec announced on December 2nd 2010, that a 2,700-metre NQ calibre drilling campaign was underway on the heavy rare earths-yttrium-zirconium Kipawa deposit, located on the Zeus property. As of January 19th 2011, 23 drill holes were drilled. Additional information will be published soon regarding the progress of the winter 2011 drilling program.

The main goal of the present drilling program is to increase the quality of resources so that the majority can be categorized as indicated. The new drill holes, combined with those from the previous two drill campaigns, will also supply sufficient material (several hundred kilograms for each zone) to complete more involved metallurgical tests.

Metallurgical Work

On October 18th 2010, Matamec reported improved rare earth leach recoveries from ore samples collected at its REE-Y Kipawa deposit. Under the supervision of Les Heymann (P.Eng.), whole rock material from the Eudialyte zone was processed at SGS Lakefield Research, yielding rare earth leach recoveries of 89.2%. The heavy rare earth yield was 85.6%.

The sample consisted of a composite of all 30 drill holes from the fall 2009 drilling campaign in the Eudialyte Zone. These values were achieved by a proprietary process developed by the company which greatly reduces the formation of silica gel. Only 0.9% of the silica present went into solution during the tests, resulting in an easily filtered material. The company is confident that a low cost processing solution has been found.

Other tests have followed this first series and Matamec is expecting new results on tests made with concentrates from the Eudialyte zone.

PEA Study - Engineering firm Roche

A PEA Study is being prepared by the "Mine and Mineral Processing" team of the engineering firm Roche to assist Matamec in the development of its rare earths-yttrium-zirconium Zeus project. The team will consist of professionals experts known in the mining industry (see September 9, 2010, press release). As soon as the resource calculation is updated and more advanced results of the metallurgical tests are received, the preliminary economic assessment study can be completed.

Magnets and phosphors – Our Niche

Although the Kipawa deposit contains all rare earth elements, it consists of about 33% of heavy rare earths and yttrium. Since the global reserves of heavy rare earths are presently very limited, Matamec has identified the magnet and phosphor markets as potential niches for its prospective product, both heavy consumers of those elements. At present, the price for 99% pure heavy rare earth oxides is 520$/kg for Tb2O3, 300$/kg for Dy2O3 and 70$/kg for Y2O3 (see Matamec's June 17th press release). 

According to Roskill and IMCOA (November 2010), the demand for magnets should have a growth rate of 10% to 15% between 2010 and 2015. Therefore, the demand for rare earth elements used in the production of these magnets is predicted to grow from 26,000 tonnes in 2010 to 48,000 tonnes in 2015. As regards to the phosphors, the predicted growth rate is from 6% to 10%, thus increasing the demand from 8,500 tonnes in 2010 to 13,000 tonnes in 2015.

Concurrently with the increase in demand, China's commerce ministry has consistently announced since August 2009 reductions in export quotas for rare earth metals. According to a New York Times article, "China's commerce ministry announced on [December 28th] in Beijing a steep reduction in export quotas for rare earth metals in the first months of [2011]." Since China currently produces 97-99% of rare earths available on the market, the prices for these elements have significantly increased. The table below illustrates the evolution of prices for selected rare earth oxides and yttrium since October 2009:

Oxide Prices (99%) of TREO in US$/kg
Types of REO   LREO   MREO   HREO
Date   Nd2O3   Eu2O3   Tb2O3   Dy2O3   Y2O3
Oct. 2009   14.40   460.00   350.00   100.00   14.00
June 2010   32.50-33.00   505.00-525.00   490.00-520.00   190.00-200.00   22.00-55.00
Sept. 2010   59.50-60.00   585.00-605.00   585.00-605.00   278.00-298.00   33.00-36.00
Jan. 2011   89.50   620.00   595.00   325.00   72.00
Source: Metal-Pages.com January 18th, 2011.

For more information, come visit booth #441 at the Cambridge Resource Investment Conference January 23rd and 24th 

Matamec is pleased to announce that its president, Andre Gauthier, will be presenting at the Critical Metals Investment Conference on January 22nd at 11:00am. Mr. Gauthier will also be presenting at the Cambridge Resource Investment Conference on January 23rd at 3:30pm in Workshop 1. Matamec will also attend the Vancouver AME BC Roundup 2011 which is being held on January 24th to 27th.

For more information or to register to the « Symposium », click here.(http://cambridgehouse.com/)

For more information or to register to the « Cambridge », click here (http://cambridgehouse.com/)

For more information or to register to the « Roundup », click here.(http://www.amebc.ca/roundup/overview-2011.aspx)

Matamec will also attend the 3rd Lithium Supply & Markets Conference in Toronto from January 19th to 21st.

For more information or to register to the « 3rd Lithium Supply & Markets Conference », click here.(http://www.metalbulletin.com/events/3691/Americas/Iron-and-Steel/Intro/Lithium-Supply-and-Markets-LSM11.html)

Finally, Since Matamec has recently become a member of the Rare Earth Industry and Technology Association, Mr. Gauthier will be present at the annual meeting of the association on January 27th in Denver.

For more information about REITA, click here.(http://www.reitausa.org/)

About Matamec

Other than its focus on the development of the Kipawa deposit and exploration for other showings of rare earths-yttrium-zirconium-niobium-tantalum on its Zeus property, Matamec's exploration strategy is to discover gold deposits, base metals and platinum group, as well as rare metals.

For gold, the company explores in the prolific mining camp of Timmins, Ontario, of which the main target is the Matheson JV with Goldcorp Canada Ltd. and Goldcorp Inc.

In Quebec, the Company is exploring for lithium and tantalum on its Tansim property and for precious and base metals on its Sakami, Valmont and Vulcain properties. As well, it is exploring for gold together with Northern Superior Resources Inc. on the Lesperance/Wachigabau property.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

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