In the past industry experts have raised questions about the Colorado-based company’s reserve profile, saying it leaned too much on more abundant light rare earths. Molycorp’s stock rose 7.9 percent to $32.50 on Tuesday after the find was reported initially by The New York Times.
Exploration at the deposit is still in early stages, Burba said, adding that the overall grade is richer than average, at 4 to 6 percent, with high concentrations of terbium, dysprosium, europium and neodymium. Heavy rare earths such as terbium and dysprosium are scarcer than cerium and other light rare earths, making them much more valuable.
"This deposit does not have the highest heavy rare earth distribution of the ones that we’re looking at," he said. "But it is the one we were interested in right off because it is very close to Mountain Pass." Prices of the individual oxides and metals have spiked as China, which produces some 95 percent of the world’s supply, has repeatedly clamped down on exports.
Ore from the new project could feed directly into the processing facilities being built at Mountain Pass, said Burba, where Molycorp is in the process of a $781 million modernization and expansion. A secure supply of heavy rare earths, used to make large permanent magnets for wind turbines and hybrid cars, would allow the company to move forward with a strategy to produce the entire rare earth chain, from mine to magnets.
"It’s a pretty encouraging deposit," said Burba. "We’re moving with great speed to get this thing defined and start processing." While Molycorp continues to watch all rare earth projects being developed in North America and around the world, it is not working with any junior mining companies on the four deposits it is currently exploring, Burba said.