Tantalus Rare Earths AG (CVE:TRE) told investors that its latest drill results have confirmed the existence of rare earths in the top layer of mineralisation, from the TRE project in north-western Madagascar.

The drill results indicate average grades of 771 parts per million total rare earth oxide (TREO). Tantalus also highlighted that the average thickness of the surface layer is considerably higher, which would add more tonnes of potential ore.

In all Tantalus has completed 11,151 metres of diamond drilling so far.

Importantly the company pointed out that today’s results continue to show a high proportion of the higher value, strategic heavy rare earths. Indeed the group believes that it has its hands on one of the most important rare earth assets in the world.

“This drilling update sets out the significant progress we have made with this potential world class rare earth project,” said Tantalus director Ivan Murphy.

He added: “(Testing) continues to make progress on defining and understanding the separation process for this very large potential resource, with the latest results from gravitational and magnetic treatments being particularly encouraging, as this would be extremely advantageous, both economically and environmentally.”

Tantalus also told investors that its Chinese associate, China Nonferrous Metal Industry’s Foreign Engineering & Construction, recently carried out a field visit and sampled the REE bearing laterites. These samples are currently being analysed and processed in China.

According to China Nonferrous Metals’ technical staff the laterites are potentially comparable to the heavy REE (HREE) bearing clays mined in southern China.

TRE is conducting metallurgical testwork in three separate laboratories, one in conjunction with China Nonferrous Metals in China, one in Germany and one in South Africa. The aim of the test work is to identify as soon as possible a low-cost extraction process.

Initial test work suggests a combined magnetic/gravity concentrate of mineral phases containing REE, plus tantalum, niobium, zirconium, tin and perhaps gallium can be extracted, which has potential to add significant value to the project.

Meanwhile Tantalus said its pitting work on Target 4, which potentially has REE bearing laterites over 30 square kilometres, is progressing well.

One hundred and thirteen pits have been excavated to date, with another fourteen in progress.

Additionally Tantulas said he has added the first of five ‘man portable’ drill rigs, also known as window samplers, with the remaining four expected to arrive in early July 2011.