Requisite has a large landholding and the path forged by others to make its mark on clay-hosted REEs

Clay-hosted REEs are red-hot now in Australia and new entrants run the risk of being lost in the crowd, a fate that Requisite Resources is confident that it can avoid.

The magic ingredients that the company is counting on are its very large landholding – indeed the largest at 5,280km² – right smack in the middle of the emerging clay-hosted REE province in Western Australia’s Esperance region as well as the luxury of not having to reinvent the wheel.

And unlike many other junior explorers who embark on drill programs after raising funds from their initial public offerings, Requisite, which is looking to raise $6m and list on the ASX in the third quarter of 2023, is already progressing a maiden 384 aircore hole program.

 

Emerging rare earths province

Esperance has received significant attention in recent times following a spate of successful exploration in the region for REEs, which are some of the most in-demand commodities globally, given their use in permanent magnets for electric vehicle motors and wind turbines.

Companies such as Mount Ridley Mines (ASX:MRD), OD6 Metals (ASX:OD6), West Cobar Metals (ASX:WC1) and Heavy Rare Earths (ASX:HRE) have all reported very intriguing REE drill hits – with the latter two defining maiden resources – across some 20,000km² of ground.

It is in this frontier exploration province that Requisite has carved out a 5,280km² – split between the Mount Ney and Balladonia projects – tenure in which to repeat the successes that its neighbours have already achieved.

“We were very fortunate about a year and a half ago, to peg a very large tenement holding in the Esperance clay-hosted rare earths region,” chief executive officer Richard Pang told Stockhead.

He added that starting out after other companies had already gotten their hands dirty was really good for Requisite.

“We get to sit back and look at what everyone else is announcing and pick and choose the best bits,” Pang noted.

“I am glad we weren’t an early mover in the region, the company made a good decision by sitting back and actually waiting because now I get to review their announcements and talk executives of the other companies about what works well and what doesn’t. There is a good working relationship between the companies in the region, we all understand that regional scale in itself has value.”

As a further example of following in the footsteps of the first mover, he identified Dreadnought Resources (ASX:DRE) and its mirroring of Hastings Technology Metals’ (ASX:HAS) REE activities in the Gascoyne noting that the former was more than happy to admit that Hastings had already done all the hard work figuring out what worked.

“It’s always good to be a first mover because then everyone’s excited and you’re a little bit in front, but it can cost you a lot of money when what you are doing doesn’t pan out exactly as you planned.”

 

Nearology is a wonderful thing

While being able to benefit from the learnings of those who have gone before you is a positive in mineral exploration, it still requires having acreage in the right place.

So it is fortunate that not only does Requisite have the largest tenure in the Esperance REE province (bigger than OD6’s already extensive 4,800km2 landholding), its acreage also abuts the more advanced projects.

 

The Mount Ney project is located 70km northeast of the town of Esperance and is sandwiched by Mount Ridley’s namesake project where not only has more than 50,000m of drilling has been completed to date but activities have shifted towards resource drilling.

Notably, Mount Ridley’s exciting Mia prospect extends straight into Mount Ney, which can only be a positive thing given that recent drilling has not returned a project high intercept of 9m grading 9,523 parts per million (ppm) total rare earth oxides (TREO) in clays, it has also identified the potential for hard rock REE mineralisation.

This intersection, which is nearly 1% TREO inside clay, unsurprisingly has Requisite feeling rather excited.

Meanwhile, OD6’s Split Rock project is located between Mount Ney and the Balladonia project, which is located 180km northeast of Esperance and about 180km southeast of Norseman up around the Balladonia roadhouse.

To date, four significant prospects have been identified at Splinter Rock where drilling has returned impressive drill results with intersections ranging from 10m to 80m and grades averaging more than 1,000ppm TREO with valuable magnet REOs making up about 22% of the total REE content while supporting geophysics have demonstrated the potential size of deposits in the region.

“OD6 are doing a lot of marketing for the region, which is fantastic, and they have found what looks to be a number amazing deposits,” Pang noted.

“They have conducted an airborne electromagnetic survey across their tenure, which gives them a good profile of the clay beds. Combined with the results from their drilling, the indications are they’ve got some huge, high grade deposits.

“We’re really excited about that because these things aren’t just isolated. Everyone in the region has identified quality prospects are now progressing to resource definition or resource upgrades in the case of HRE and WC1.”

One other benefit of its tenure is the ease of access due to presence of multiple tracks, allowing the company to do plenty of early exploration without impacting on the environment.

 

REE drilling underway

“What we are looking for and what the other companies are finding is shallow clay-hosted REE deposits,” Pang pointed out.

“You’d want the weathered clays starting from 15m to 20m max. If you can get what OD6 has, which is a 70m intersect of clay with about 1,500ppm from 15m, the overburden is just one fifth of your strike.

“The OD6 discoveries to date, provide us with a lot of optimism for our drilling campaign, combined with Mount Ridleys recent announcement of 30m at 6,000ppm TREO starting at 10m in their large Mia prospect and we are surrounded by high grade deposits.”

Requisite is currently working its way through its initial 384 hole aircore drilling program (188 at Mount Ney and 196 at Balladonia), which Pang adds is the only kind of drilling that’s really needed.

 

18 of these holes will test the continuation of Mount Ridley’s Mia prospect.

“That’s the beauty of it (aircore drilling), it’s fast and it’s cheap,” Pang noted.

“All the drilling we do will be aircore unless we decide to do a touch of diamond to get a solid core of clay. We don’t need diamond drilling to get through rock or anything. It’s just you can get a nice solid clay sample for metallurgical test work.

“There’s only one company in our region that has done diamond drilling because they want to get a big intersection of solid clay that they can go and conduct testing on.”

Requisite also expects to kick off another heritage survey in about three weeks, which will give the company access to another 125 holes to complete coverage of its entire tenure.

“It will be 510 holes all up across our whole tenure, which is a really good starting point and while it may not sound like a lot of holes for 5,000km², we are trying to clip something that might be 10km long and 5km wide,” Pang noted.

This drilling follows on the company’s soil sampling, which highlighted anomalous REEs between 150ppm to 441ppm TREO throughout its tenement holdings.

 

Experienced management team

Of course all the projects in the world would mean diddly squat without an experienced management team to actually figure out what to do and what works and while every junior miner would claim to have experienced leaders, Requisite does have some serious firepower behind it.

Non-executive chairman Anthony McClure has over 30 years’ of technical, management and financial experience and is currently the managing director of Silver Mines (ASX:SVL), which has just gone through the very long process of securing a mining permit in New South Wales.

He’s also the non-executive chairman of Strickland Metals (ASX:STK) and has been on multiple other boards.

Pang noted that McClure is a very corporate governance-focused person, which is a good set of experience and skills for a chairman to have, while his experience around taking projects to mining permits would also come in useful further down the road.

Company co-founder and technical advisor Peter Langworthy is a geologist with over 30 years’ of experience and is very well known in Western Australia.

“He did some amazing things with Jubilee Mines, which was acquired by Xstrata for $3.1bn in 2007, and is probably the most knowledgeable person in mining that I know,” Pang added.

He also fingered non-executive director Trent Franklin who is the managing director of Enrizen Financial Group and has been responsible for multiple IPOs, which will no doubt come in useful as Requisite progresses its own IPO.

Non-executive director Scott Brown brings over 20 years of experience in corporate governance while Pang himself has 15 years of executive management experience with a specialisation in operation execution and stakeholder engagement.

 

Post-listing plans

As noted previously, Requisite is looking to raise $6m from its initial public offering.

Pang reiterated that while other companies raise money to put holes into the ground, by the time its IPO is completed, the company would already have drilled anywhere from 384 to more than 500 aircore holes.

“The money we’re raising in the IPO will enable us to progress to the next level. Based on our first round of drilling, we will have a number of targets that will require infill drilling,” he noted.

“We are planning to do some airborne EM similar to what OD6 did to really define the clay beds then we can go do our heritage surveys and clearing to start doing infill drilling.”

Pang explained that while the companies operating in the region originally thought that EM surveys didn’t work because of all the salt lakes (which are too conductive) in the area, OD6 went ahead and found that it worked perfectly to map out their tenure.

“We have got similar terrain to them, so we are going to some targeted AEM surveys and when you get mapped out clays like OD6 have got, you basically know where you need to go and clear your drill lines because you already know where the edge of your deposit is,” he added.

“The difference is not wasting money drilling holes where you have got less chance of hitting something, so you do your regional drilling to work out where the deposits are, and then you go and target in on the high-grade areas where you’re seeing the larger clay deposits.”

Funds will also be used to carry out metallurgical studies with the company noting again that it would be guided by work carried out by other operators in the area.

It noted that Meeka Metals (ASX:MEK) were the first to use a hydrocyclone to spin out the large fractions of clay, leaving up to 90% of the REEs in the remaining, fine clay fractions, which reduces the amount of clay by up to 50% whilst increasing the grade relative to the original sample.

Having less total mass also means that when it came time to leach the clays, less acid and smaller equipment could be used.

“There’s a lot of metallurgical work to do, but we will do targeted MET work and the rest is all focused on drilling,” Pang said.

“But the ultimate goal with the money we’re raising is to get to a point where we have defined a resource.”

“The demand for REE is insatiable, it is not going to slow any time soon. Australia has an opportunity to become a significant player in the Rare Earths domain and we plan for Requisite to be part of the Australian Rare Earths growth story”.

 

This article was developed in collaboration with Requisite Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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