Shares of Great Western Minerals Group (TSX.V: GWG) surged 24% on Monday after the company released an updated National Instrument (NI) 43-101 resource estimate on its Steenkampskraal rare earth deposit in South Africa.
Over 1.2 million shares traded hands during Monday's session versus a daily average of just over 600,000. The stock gained $0.07 to close at $0.36.
The updated estimate included a 114% increase in indicated and 218% increase in inferred resources. The indicated category now contains an estimated 32,000 metric tonnes of total rare earth plus yttrium oxide (TREO) while the inferred category now contains 42,100 metric tonnes.
“The substantial increase in TREO tonnage from this Resource Estimate update significantly improves the economic potential of the Steenkampskraal Monazite Project,” said President and CEO Marc LeVier.
“The resource update reported today will be incorporated into the Preliminary Economic Assessment that is being prepared concurrently. We expect the Steenkampskraal analysis will be bolstered further with the upcoming addition of a minimum of 55 drillholes for which assay work is currently in progress.”
The Steenkampskraal deposit is a dipping vein exposed at surface. The vein has an average thickness of one meter and has been traced for a strike length of 1,050 meters. The vein is composed predominantly of monazite, which accounts for more than 90% of total rare earth elements. The vein material contains TREO’s ranging from 0.4% to 46%.
Great Western continues to drill at the project site. The company is working to expand the size of the resource as well as prove up the current geological model. The inferred resource portion of the deposit could be upgraded to the indicated category when the next resource estimate is released as part of the upcoming preliminary economic assessment.
Shares of Great Western are traded on the TSX Venture under the ticker symbol GWG. The company announced cash and equivalents of $56 million for the quarter ended September 30, 2012. The company has 416 million shares outstanding, giving the company a market cap around $150 million.