September 26, 2103 — Tracy Weslosky, Publisher of InvestorIntel interviews Peter Cashin, President and CEO of Quest Rare Minerals Ltd. (TSX: QRM | NYSE MKT: QRM) and discusses the Quest’s most recent (very) big news, how the company has the highest level of critical/heavy rare earths in its peer group, how metallurgy is advancing steadily and results are exceeding previous expectations and peers reports, as well as praseodymium, neodymium, lutetium, yttrium, dysprosium, terbium, niobium, and Quest’s strategic end-user agreement for zirconia. Quest is currently advancing several high-potential rare earth projects in Canada’s premier rare earth exploration areas: the Strange Lake and Misery Lake areas of northeastern Québec. Quest recently announced that it has produced separate heavy (HREE) and light (LREE) rare earth concentrates from its Strange Lake B-Zone Deposit. The Strange Lake Rare Earth Project property, located 220 kilometers northeast of Schefferville and 125 kilometers west of the Voisey Bay Nickel-Copper-Cobalt Mine, covers an area of 54,000 hectares.
Tracy starts: Since day one, you have said it’s all about the metallurgy and Quest just put out an excellent piece of news that the market’s responding to positively. You’re up nearly +30% in the last week. Talk to us about your most recent news release.
PC: As you rightly pointed out, Tracy, the critical path of these rare earth projects is the ability to extract the metals economically. The release was the end result of a lot of work by my technical team – proving that, indeed, it can be done for Strange Lake.
TW: You’ve proven that you can do it for Strange Lake, but what I’ve also noticed is that (in your news release), you highlighted items such as yttrium, which Professor Dudley Kingsnorth, Jack Lifton and Ian Chalmers all agree is most highly in demand. Can you talk to us about yttrium, in particular?
PC: I think Yttrium has a very positive market for things like high-temperature coatings, phosphors, flat screens, as well as compact-fluorescent lighting. I think the upside is fairly positive for yttrium. But I’d also like to point out that, in comparison of our peers, Strange Lake has a full distribution of those elements that are viewed as ‘critical’ going forward, especially on the heavy lanthanides side. We don’t talk much about holmium and lutetium. We’ve addressed a number of inquiries about both those elements, particularly in medical technologies, in sensors, from CT scans and MRIs. It has been a market that has been relatively underserved and we hope to be able to feed into that growing market.
TW: We’ve been discussing holmium a lot here at InvestorIntel and there’s been a big debate over who has the most holmium. Would you care to weigh in on that?
PC: I don’t like to compare, I just know that we have significant amounts, not only those two elements – holmium and lutetium – but right across the full spectrum of rare earths; especially the heavy REEs.
TW: Speaking of significant, you put out an incredible piece of news with an end-user agreement you made with TAM laboratories (TAM Ceramics Group). I felt like the market didn’t necessarily absorb what big news that was. Can you give us the highlights of this particular agreement?
PC: Our bigger concern from the onset was the amount of zirconia that Strange Lake would deliver on an annualized basis — and that would have a significant impact into that market. Given that it was the largest volume of material, it was our primary objective to make sure we placed that first, even though (from a capital standpoint) it doesn’t contribute as much as the rare earths to the cash-flow model. We wanted it placed because of the sheer volume. TAM was identified by my manager of metals marketing as being a potential buyer of the product. They’re a small privately owned group and they’ve been in the industry now for over 100 years. They just became private recently and were looking for a means by which to expand their market presence. TAM viewed the high quality of the product that we’re able to produce at our metallurgical plant as allowing them that opportunity, which led to the relationship we established with them.
TW: The race is on for these end-user agreements and we can’t encourage our audience enough to do more due diligence and understand rare earth leaders. Of course you’ve been a leader from the onset, and in particular, with metallurgy. Can I get you to give our audience an overview on which rare earths you consider to be most critical right now?
PC: This is just preliminary, but from our view, praseodymium, neodymium, lutetium, yttrium, dysprosium, and terbium from our view are probably the largest capital contributors to the cash-flow model at Strange Lake. Those REEs account for roughly 86% of the capital generation from the operations.
TW: Peter, I know you like to be more of a stealth-like player and it can be hard to get a hold of you. So while we have you here in the studio today, can you give us an overview on what we might be looking forward to for benchmarks for Quest in the upcoming 6 to 12 months?
PC: We’re working very hard to ensuring that the PFS (Pre-Feasibility Study) hits the market. In doing so, we’re going to be transiting from mini pilot plant to full demonstration scale, which should be up and running by or before the end of the year. We continue our conversations with end users for rare earth product as well as trying to place our niobium. A lot of those negotiations and discussions are in a fairly advanced stage — and we hope to be able to come to market with some positive news in regards to the marketing side of Strange Lake.
Disclaimer: Quest Rare Minerals Ltd. is an advertorial member of InvestorIntel.