EANS-News: Tantalus Rare Earths AG / Update on work progress and new results from Target 1, 3, 4 and 5 (with document)

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Company Information/RESOURCE ESTIMATE

Düsseldorf (euro adhoc) - Tantalus Rare Earths AG

(Duesseldorf, 12 October 2011,Tantalus Rare Earths AG) The Directors
of Tantalus Rare Earths AG ("TRE"), a German company exploring an
extensive area of secondary rare earth mineralisation at surface and
primary, near-surface bedrock rare earth ("REE") mineralisation in
north-western Madagascar (the "TRE Project"), are pleased to announce
a general update on the project, with a special emphasis on the
in-house resource estimate and the metallurgy.

HIGHLIGHTS

* Initial leaching tests on argillaceous laterites suggest the
Tantalus clay mineralisation is comparable to the ion absorption
clays of southern China which provide most of the world's current
heavy rare earth supplies, with total recoveries averaging 79%.

* A preliminary in-house resource estimate of surface or near surface
mineralisation for parts of Targets 1, 3 and 4 has been completed in
conjunction with SRK Consulting (www.srkexploration.com) totalling 55
million tonnes of mineralisation, containing 46,000 tonnes of rare
earth oxides ("REO") with an in-ground value of USD$8.28 billion
(US$180 per kilo average) using Q2 2011 prices.

* Unlike other REO projects, approximately 20% of the total REO are
the most valuable heavy REOs.

* Near surface high-grade bedrock mineralisation with rare earth
bearing carbonates has been discovered in Targets 4 and 5 with the
assays revealing a basket value for the contained rare earths of
US$4,219 and US$4,673 per tonne of ore respectively.

* The Target 4 and 5 mineralisation also contains significant amounts
of scandium, a highly sought after element being used increasingly in
fuel cells and high strength aluminium alloys.

Commenting on these results, Ivan Murphy, Executive Director of
Tantalus Rare Earths AG said:

"The Tantulus project continues to emerge as one of the largest
potential resources of Heavy Rare Earth Oxides outside of China. Only
a small proportion of the project area has been explored to date, and
not surprisingly, the excellent results we have produced so far is
generating considerable interest from Tier 1 financiers and end
users."

Wolfgang Hampel, COO of Tantalus Rare Earths AG added: "I am
delighted that we have received confirmation that our REE bearing
argillaceous laterites have at least in parts similar characteristics
to the clay deposits of Southern China. The massive potential revenue
per tonne figures combined with the fact that we have, only explored
a small portion of the project area, provides us with confidence that
our Tantalus Project will support a very large and extremely
profitable mining and processing operation which will supply heavy
rare earths for many years. "

1. UPDATE ON METALLURGY

Argillaceous laterites - Ion Adsorption Clays Initial leaching tests
on the Tantalus REE bearing argillaceous laterites have returned very
positive results and some of the clays tested are indeed comparable
to the so-called ion adsorption clays from Southern China. The
overall recovery was 79 %, which is excellent when compared to many
other projects. The ion adsorption clays from Southern China - also
called "weathered crust elution-deposited rare earth ores" are the
World's almost exclusive source for heavy rare earths. The ores are
generally low grade and are mined using low-cost, in situ leaching
methods.

At the same time TRE's subcontractor is pursuing more testwork on the
argillaceous laterites using conventional gravity and magnetic
separation techniques. A new set of concentrates has been received
and will now be assayed and studied mineralogically.

More REE bearing clay samples are getting sent regularly to TRE's
partners and consultants to check their ion absorption capacities.

New high grade mineralisation from Targets 4 and 5 A first sample
from the new high grade REE mineralisation discovered on Target 4 was
studied using a scanning electron microscope (SEE). Although the new
high grade mineralisation found on Targets 4 and 5 was encountered in
different geological settings, the grades and the repartition of the
various REE are almost identical. The TREO grade for Target 4 was
1.84% and 1.68% for Target 5. Cerium is particularly low, whereas Nd,
Sm, Pr, La, Y, Gd, Eu, Dy and Tb are particularly high, see Table 1.
Uranium and thorium grades are exceedingly low.

The mineralogical study has shown that the REE mineralisation is
characterized by fine grained, complex REE fluoro-carbonates filling
in interstices of a volcanic breccia, see Figure 1 and 2.
Surprisingly, the analytical device of the SEE has also shown the
presence of noteworthy amounts of scandium. Scandium is closely
related to rare earths and often added to them because of the
chemical similarities and geological setting where it occurs.
Scandium is increasingly used in fuel cells and high strength
aluminium alloys. As scandium is not covered by the assay method
currently applied (Alschemex code ME-MS81), a certain number is
currently getting re-assayed to evaluate the potential for scandium
mineralisation. Samples taken in 2008 on Target 1 were assayed for
scandium but showed only low grades. As the geological setting of
this target is different, scandium could occur in economic
quantities.

This new type of mineralisation is interpreted as being a precipitate
of REE bearing aqueous solutions derived from the weathering of
overlaying REE bearing strata (a "REE calcrete"). The lateral extent
and thickness of this REE bearing layer is not yet known but is
subject to a drilling programme starting later this month. This
mineralisation type is most advantageous as ore processing can be
done by simple acid leaching methods.

Table 1: REE composition and basket value of two new bedrock
mineralisation types found at Target 4 and 5.

For technical reasons the table is only shown in the attached pdf.

Figure 1: Scanning electron microscopic photo of volcanic breccia,
the bright parts are REE-Sc-bearing fluoro-carbonates filling
interstices between quartz and other mineral grains.

For technical reasons the figure is only shown in the attached pdf.

Figure 2: Scanning electron microscopic photo of globular
REE-Sc-bearing fluoro-carbonates (close-up of of Figure 1).

For technical reasons the figure is only shown in the attached pdf.

Primary mineralisation Although the REE mineralisation on Target 1 is
rather low grade, the Company believes the ore could be mined
economically as the majority of REE bearing minerals is present as
acid leachable carbonates in an inert matrix. The Ta, Nb and Zr
bearing minerals could probably be concentrated using gravitational
methods.

TRE is currently identifying suitable laboratories to carry out
testwork on the primary mineralisation.

In the meantime, exploration will now focus on expanding the
high-grade resource discovered at Targets 4 and 5.

2. IN-HOUSE RESOURCE ESTIMATE: In conjunction with SRK Consulting,
preliminary resource estimates have been calculated for parts of
Target 1 (Ampasibitika), Target 3 (Befitina) and Target 4 (Caldera).
The resource estimates are preliminary and partial in nature because
all three targets are being actively evaluated and the extents of the
estimated areas are dictated by the availability of results. The
preliminary resource estimates were calculated using the available
pitting, drilling and topographical data. Datamine software was used
to create sectional strings and wire-frames that were linked together
to form surfaces. These surfaces were then developed into block
models, into which grades were estimated. The preliminary resource
estimates have resulted in the figures shown in Table 2. It is
critical to note that these figures are estimates and tentative in
nature. Their accuracy will improve as more data are obtained and
incorporated into revised versions of the estimates. Table 2: The
preliminary resource estimate figures.

For technical reasons the table is only shown in the attached pdf.

Very significantly, the preliminary resource estimates only encompass
a small proportion of the targets that are being actively evaluated,
and a very small part of the much larger area that is underlain by
the Ambohimirahavavy igneous complex (Figure 2). Furthermore, the
thickness of the mineralised zones has yet to be fully realised due
to the limitations on the depths to which the pits can be excavated
and the lengths of the drill holes.

Figure 2: Work progress until 5 October 2011 and areas for
potentially REE bearing argillaceous laterites.

For technical reasons the figure is only shown in the attached pdf.

3. WORK PROGRESS

Work is progressing rapidly on 5 of the 6 target zones. The initial
field programme for 2011 should be finished before the end of this
year. However, outstanding results may dictate a change in strategy
on some of the prospects. For a total of 5,452 samples results have
been received so far from Alschemex, results for 522 samples are
pending and a further 2,502 samples are currently on the way to the
laboratory.

Table 3: Work programme for 2011 and progress until 5 October 2011.

For technical reasons the figure is only shown in the attached pdf.

Work progress on Target 1 (Ampasibitika Prospect) Diamond drilling is
almost completed now on Target 1. To-date, 268 diamond drill holes
have been completed, totalling 19,615m drilled meters. The remaining
1,300m (19 holes) will be finished before Christmas 2011 using a
single drill rig. The other light weight, man portable drill is
currently transported to the Caldera Prospect (Target 4).

The Company has received new assay results from ALS Chemex, Canada
for 9 drill holes. The new results confirm that the target is covered
by a continuous layer of REE-bearing argillaceous laterites that are
underlain by multiple mineralised dykes and veins that can be
followed over several kilometres strike length.

The drilled widths of the REE-bearing argillaceous layer average
10.24 m which corresponds to a true (vertical) thickness of
approximately 9 m. The TREO grades vary between 608 ppm and 1,732
ppm; the ratio of HREO to TREO varies 16 and 22 %, which is
consistent with earlier results. Uranium and thorium values continue
to be very low.

Each drill hole has intersected between 1 and 5 different mineralised
veins. The widths vary between 1 metre and 17 m. The best TREO (Total
Rare Earth Oxides) grades attain 0.34 %. Ta, Nb, Zr, Ga and Sn are
also enriched. The overall ratio HREO/TREO is 21/79. Uranium and
thorium grades are low.

Table 4: Summary table showing the weighted averages for TREO and the
percentage of HREO from 11 drill holes on Target 1.

For technical reasons the table is only shown in the attached pdf.

Work progress on Target 2 (Ambaliha Prospect) This 8.5 km² sized
prospect is characterized by a set of three sub-parallel radiometric
anomalies that can be followed for over almost 8 km. Outcrop sampling
in 2009 has confirmed the presence of primary REE mineralisation
hosted by a series of alkaline granites. It is suspected that this
primary mineralisation is equally overlain by REE bearing
argillaceous laterites.

Out of the initial 260 pits/window sampling holes planned on this
prospect, 32 have been finalized as yet; another 10 are currently in
progress. The maximum depth of the pits is 10m; the average depth is
5.70m. All pits have been channel sampled; no results have been
received to date. At the current speed, all pitting/window sampling
should be finished around mid-December 2011.

Work progress on Target 3 (Befitina Prospect) Earlier work on this
prospect, including a reconnaissance soil geochemical survey,
trenching and limited pitting has indicated the presence of a
continuous REE bearing layer of clays overlaying a series of
presumably alkaline rocks. The 15 km² sized prospect is subject to an
extensive pitting/window sampling programme totalling some 440
sampling points.

Until this week, 259 pits out of 440 pits have been excavated and
sampled, another 10 are currently in progress. The completion of the
programme is scheduled for early December 2011.

Results recently received for 30 pits underline the potential for REE
bearing argillaceous laterites in economic quantities and grades, see
Table 5. In more than one third of the pits, pitting ended in
mineralisation. Further to that, in many of these pits the grades and
the HREO percentage increase considerably with depth. As pitting is
limited to a maximum of -10m due to security reasons, diamond
drilling will be carried out at a later stage to examine the full
extent of the mineralisation.

Table 5: Summary table showing the averages for TREO and the
percentage of HREO from 30 pits on Target 3.

For technical reasons the table is only shown in the attached pdf.

Work progress on Target 4 (Caldera Prospect) Pitting has resumed on
the 31 km² sized prospect after the completion of 2 major trenches on
the new high grade bedrock mineralisation announced earlier. Almost
200 pits out of the 385 pits planned have been finished to date. The
remaining pits will completed by December 2011.

The results received from Alschemex for 25 further pits (see Table 6)
underline the economic potential of this huge prospect. In almost 50%
of the pits, pitting stopped in mineralisation as either the maximum
depth of 10m was reached or a high groundwater level was encountered.
Also, in many pits the grades and the percentage of HREO increase
considerably with depth. The highest overall grade was 0.25% TREO,
the highest percentage of HREO in the argillaceous laterites reached
33 %.

Currently, a new fly camp is installed in the caldera and diamond
drilling will commence this month. The diamond drilling programme not
only targets the REE bearing argillaceous laterites but also the new
type of high grade mineralisation which apparently underlies the
clays. The full extent of high grade mineralisation is not yet known.

Table 6: Summary table showing the averages for TREO and the
percentage of HREO from 25 pits on Target 4.

For technical reasons the table is only shown in the attached pdf.

Work progress on Target 5 (Ampasibitika South Prospect) Pitting on
this prospect, which is the southern continuity of Target 1, will
soon be completed. New assay results from this area are expected
later this month. Once pitting is completed here, the teams will move
on to the adjacent Target 4 to support the other pitting teams.

4. WORK PROGRAMME - OUTLOOK FOR COMING MONTHS

At the current progress rate, the company plans to publish updated
figures on resources and grades every 4 - 8 weeks. By the end of
2011, TRE expects to be able to delineate a low grade resource in the
range of 300 to 500 million tonnes.

Field work in the coming months will concentrate on finalizing the
pitting/window sampling programme on the various targets. Special
emphasis will be made on Target 4, the Caldera, The geomorphology and
geology of this target support the development of a very large,
deeply weathered deposit of REE bearing argillaceous laterites. The
discovery of a leachable high grade mineralisation at shallow depths
is a further highlight of this target.

Parallel to the field work, every effort necessary will be undertaken
to complete the metallurgical testwork on the various ore types in
order to define a NI43-101 compliant resource estimate.

5. EXPLORATION STAFF UPDATE

TRE's local subsidiary Tantalum Rare Earth SARL ("TREM") has rapidly
become one of most active mineral exploration companies in
Madagascar. As the company focuses more and more on establishing a
massive NI43-101 compliant resource, an increase in staff and new
fields of activity for the existing staff are planned. In total, TREM
has currently 37 persons under contract.

Mr. Wolfgang Hampel The Chief Operating Officer of Tantalus Rare
Earths AG and Co-Director of Tantalum Rare Earth SARL will continue
overseeing all technical and geological aspects of the project but
will emphasize his work on coordinating the company's mineralogical
and metallurgical testwork. There are at least three different types
of rare earth mineralisation present on the project area: primary
vein/skarn hosted, secondary laterite/clay hosted and presumably
secondary, high grade mineralisation at shallow depths. Each of these
mineralisation types has different mineralogical, petrographical and
chemical characteristics and requires different approaches as to
produce intermediate REE concentrates.

Mr. Montaharison Rakotoandriana Mr. Rakotoandriana, who is the second
Co-Director of Tantalum Rare Earth SARL, will focus on logistical
aspects of the project and the relationship with the local
administration. With an ever growing number of samples sent to
laboratories, consultants and partners worldwide, and more technical
equipment imported into the country, the logistics become
increasingly important and complex.

Dr. Dominique Rakotomanana Being one of the renowned specialists on
the geology of Madagascar, Dr. Rakotomanana will continue organising
the exploration programme and being in charge of external
relationships on all administrative levels. Further to that, he will
train the Malagasy junior geologists in all technical and theoretical
aspects.

Mr. Chris Barrett Mr. Chris Barrett will be in charge in developing
and structuring the fast growing database and liaise with the TRE's
consultants SRK Consulting Ltd. in order to establish a NI43-101
compliant resource estimate. The database is constantly being updated
and new resource estimates are expected every 4-8 weeks.
Additionally, Chris will carry out field work on the various
prospects and train the Malagasy technical staff.

Technical Team Madagascar In order to maximise the field work
progress, TREM has hired 20 Malagasy geologists, most of them junior
geologists. They are either based in fly camps at the various
prospects or in Ambanja where the company's sample preparation
laboratory is situated. Further to the geologists, a geophysicist/GIS
specialist, an environmentalist and a laboratory manager are
employed.

Support Team Madagascar This comprises administrative staff in
Antananarivo and Ambanja for logistics and accounting, drivers,
laboratory assistants, guards and others.

Local Labour Force Madagascar TREM is one of biggest employers of the
region. Depending on the type of field work carried out, TREM employs
up to 260 persons from the Ampasindava Peninsula. They are mainly
employed for the preparation of drill pads, the moving of drill rigs
and pitting. Others are employed at TREM's reforestation programme or
as guides, porters and guards. The impact on the local economy is
substantial.

New Staff TRE considers hiring more technical expatriate and local
staff in the near future. This includes further geologists, mining
engineers and others.

Notes to Editors

About Tantalus Rare Earths ("TRE") TRE is a German incorporated
holding company whose subsidiaries are engaged in the exploration and
development of rare earths. TRE's shares are quoted on the Open
Market of the Frankfurt Stock Exchange. TRE's principal asset is an
exploration project located in north-western Madagascar and comprises
rare earth-tantalum-niobium-zirconium-hafnium enriched dykes and
sills and Rare Earth Element ("REE") bearing argillaceous laterites
derived from the weathering of underlying alkaline intrusives.

There are numerous indications that most of the alkaline intrusive
bodies within the concession are overlain by REE bearing argillaceous
laterites. TRE is therefore considering the whole area underlain by
alkaline intrusives (150 to 170 sq km) as prospective for secondary
REE mineralisation in the weathering crust. The exploration programme
aims to define the primary (vein/skarn hosted) and secondary
(argillaceous laterites) mineralisation present on the concession
towards a NI 43-101 compliant mineral resource estimate and support a
detailed feasibility study towards mine development and production.

Tantalus Rare Earths AG
Berliner Allee 12
40212 Düsseldorf
Deutschland
Telefon: +49 (0)211 52391 430
Telefax: +49 (0)211 52391 200
e-Mail: contact [at] tre-ag.com
Internet: http://www.tre-ag.com

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Further inquiry note:
For further information contact:
Ivan Murphy, Vorstandsmitglied Tel: +44 (0) 208 566 1579
Ana Ribeiro, Blythe Weigh Communications Tel: +44 (0) 207 138 3206
or +44 (0) 7980 321 505

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company: Tantalus Rare Earths AG
Berliner Allee 12
D-40212 Düsseldorf
phone: +49 (0)211 52391 430
FAX: +49 (0)211 52391 200
mail: contact [at] tre-ag.com
WWW: http://www.tre-ag.com
sector: Holding companies
ISIN: DE000A0SMSL4, DE000A1KRQE7
indexes:
stockmarkets: free trade/entry standard: Frankfurt
language: English