The Coors and Crown sectors at Mt Weld host the 37.7 million tonne resource which derives over 50% of its value from a mine grade of 1.07% niobium oxide. The majority of the resource is in the inferred category and mostly lies between 30m and 60m deep, and separate to the rare earths deposit.

Lynas has conducted a scoping study on the niobium resource which has indicated an open pit mine could be developed. Following that the project would be developed via a conceptual process route consisting of a number of stages based on existing technology located in China to produce the rare metal product suite.

The study showed Lynas could develop a 1 million tonne per annum mine with a 35-year mine life, generating a net profit after tax of US$40 million per annum on an un-geared basis.

Lynas president Nick Curtis told MiningNews.net he was encouraged by the upside in the niobium market which could come from the Chinese using the alloy to produce high strength low alloy steel. Niobium is already used widely in Europe and the USA.

Curtis said the rare earth project remains the focus of the company.

“We are going to get positive cashflow on the rare earths project and then worry about this one (niobium rich resource),” he said.

“We will continue to push ahead with this project quietly, understanding perfectly well, as a management group, the key priority is still to get shareholder cashflow out of the rare earths project.”

The cost of developing the rare earths project has been put at US$30-35 million and the company is now in talks regarding sourcing funds.

A technical feasibility study and pilot plant for concentration process for the rare earths project have already been completed. Lynas has a 20% holding in AMR Technologies, which is the world’s second largest rare earths processor with facilities in China.

Lynas Corp shares were trading up nearly 30% at 31c in midday trade, after reaching an intraday high of 35c. Last week shares in the company reached a year low of 24c.