Murchison Targets the Green Energy Metals in 2022: Cobalt, Copper, Nickel, Zinc and Silver.

It seems of late that every time I get excited about the technicals of the gold chart and then go on to make a comment about it I quickly get taught a lesson in humility. Well, enough of that, there are plenty of other commodities out there and many of them are far more important to the future build-out of the green economy. I’m talking about key electric vehicle and clean energy production and storage metals like nickel, copper, cobalt, and silver to name a few. Perhaps these commodities and their underlying prices will be a little kinder to me and not crash a day or two after I extol their virtues. Although nickel is trading at 5-year highs and copper isn’t far off of its recent highs. At least cobalt is only near 3-year highs and well off the peak it reached in early 2018. So fingers crossed I’m not some sort of a short-term price jinx and fundamentals will rule the day.

A Canadian company developing numerous projects that provide exposure to cobalt, copper, nickel, zinc and silver is Murchison Minerals Ltd. (TSXV: MUR). Murchison is focused on the exploration and development of the 100% owned Brabant Lake zinc‐copper‐silver project in north‐central Saskatchewan. The Company also owns 100% of the Haut Plateau de la Manicouagan (HPM) nickel‐copper‐cobalt project in Quebec and holds an option to earn 100% interest in the Barraute VMS exploration project also located in Quebec, north of Val d’Or. Saskatchewan and Quebec are two of the best mining jurisdictions in Canada and, arguably, in the world. Additionally, these projects are surrounded by excellent, established infrastructure.

The last time I had a look at Murchison I focused on the Betty Zone at Brabant Lake given that was where I saw the bulk of the news being generated at that time. So today we’ll focus on the HPM project because that’s been the source of most of the excitement for the Company over the last couple of months. The HPM property is located between Baie-Comeau and Fermont, Québec, about 20 km from an all-season road connecting the two communities, 8 km to railroad, and about 225 km to the Port of Sept Iles. The property is associated with the Manicouagan Metamorphic Complex and hosts several nickel-copper cobalt occurrences.

Most activity at the HPM project has been focused on the highly prospective PYC target area where the Company identified significant sulphide mineralization on the surface over a strike length in excess of 1.7 km. Assay results from its June prospecting program, from grab samples and short backpack drill core samples, feature assays as high as 1.27% nickel equivalent or 2.59% copper equivalent (0.79% Ni, 0.14% Cu, 0.15% Co) from 0.83 metres of backpack drill core. Assay results also confirm mineralization south-east of the PYC target at the newly discovered Dix showing, which assayed as high as 0.90% Nickel Equivalent or 1.83% Copper Equivalent (0.44% Ni, 0.39% Cu, 0.10% Co) from 0.45 metre of backpack drill core.

Source: Murchison Minerals Aug 16, 2021 Press Release

Following a successful capital raise of $4 million that closed in October, the Company is in an excellent financial position to unlock the potential of HPM. To that end, on November 2nd Murchison announced it had commenced a 3,550 m drilling program focusing on the PYC target while concurrently prospecting a number of significant geophysical anomalies that were identified on the HPM project during a 655 line-kilometre airborne electromagnetic survey completed earlier this year. To date, the Company has successfully completed seven drill holes totaling 1,599 m testing approximately 550 m of the airborne electromagnetic anomaly with significant pyrrhotite and minor chalcopyrite mineralization observed in all seven holes. A handheld portable Niton XRF (X-Ray Fluorescence analyzer that enables real-time, quantitative sample analysis in the field) confirms the presence of nickel, copper and cobalt within the sulphide intervals. Now we await the assays to learn just how much of those valuable commodities are present in these rocks.

One need look no further than the bidding war that broke out over Noront Resources and its nickel-copper-PGE project in neighbouring Ontario, where it looks like BHP Group Ltd will be the successful suitor, to understand the value of these types of resources. Granted Murchison has a bit of work ahead of them to define a comparable asset but that’s why they only have a market cap of $22 million today. A successful winter drilling program at HPM could put Murchison Minerals on the radar of companies like BHP.




Critical Materials Corner: Jack Lifton & Christopher Ecclestone on the Rare Earths Market

In this episode of the Critical Materials Corner, Tracy Weslosky is joined by Critical Materials industry expert and InvestorIntel Editor in Chief Jack Lifton and Christopher Ecclestone, Principal and mining strategist at Hallgarten & Company about the demand and supply gap in the rare earths supply chain and about the key developments in the North American rare earths space.

In this InvestorIntel interview, Christopher went on to say that there are not enough players in the market to produce sufficient rare earths for the electric vehicle transformation. Jack further added that the only country self-sufficient in critical rare earths is China and explained why the US still lags far behind while Europe has already acknowledged the need for rare earths.

Disclaimer: This interview, which was produced by InvestorIntel Corp. (IIC) does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.If you have any questions surrounding the content of this interview, please email info@investorintel.com.




Top 5 lithium junior mines with huge potential in a booming lithium market

The lithium sector has been the standout of all sectors in 2021, led by lithium prices surging higher from about US$7,000/t to around US$30,000/t in 2021. Ordinarily, you could expect prices to fall back to earth, but in this case, lithium demand is so strong that prices are unlikely to fall back anytime soon.

Bloomberg recently stated: “EVs have lithium booming — and this time, there is no bust in sight. Demand is expected to outstrip metal production for at least the next five years with few new mining projects on the horizon.”

Benchmark Mineral Intelligence recently stated: “Right now lithium demand is growing at three times the speed of lithium supply.”

Furthermore, a November 2020 UBS forecast is for “lithium demand to lift 11-fold from ~400kt in 2021 through to 2030.”

Lithium carbonate price graph showing the extraordinary 2021 price gains

Source: Fastmarkets

Given the above information, it makes very good sense to invest in the potential next tier of lithium miners. Added to this is the trend towards increasing market share of lithium iron phosphate (“LFP”) batteries, which will lead to greater demand for lithium carbonate, best sourced from lithium brine. Right now Argentina offers the best exposure to emerging lithium brine miners.

Top 5 lithium junior miners (in alphabetical order)

  1. Alpha Lithium Corporation (TSXV: ALLI)
  2. Arena Minerals Inc. (TSXV: AN)
  3. Argosy Minerals Limited (ASX: AGY)
  4. Galan Lithium Ltd. (ASX: GLN)
  5. Lithium South Development Corporation (TSXV: LIS | OTCQB: LISMF)

Alpha Lithium Corporation

Alpha Lithium (Alpha) 100% own 27,500 hectares of the Tolillar Salar in Argentina and 5,072 hectares at one of the leading salars in Argentina, Hombre Muerto. The Tolillar Salar grades are lowish and in the 200-350 mg/L range with Mg:Li ratios between 4.90 and 5.37 which is ok. A big plus is that Alpha has 100% of the Tolillar salar to themselves and has now expanded into Hombre Muerto. Additionally, the two Projects have potential future synergies being only 10 kms from each other.

Alpha is testing their in-house developed Direct Lithium Extraction (DLE) process and has achieved some strong results including lithium concentrations of 9,474 mg/L with significant rejection of impurities. They are also testing DLE with Lilac Solutions (private).

At Hombre Muerto drilling is yet to start but given it is the best salar in Argentina then results could potentially be very good. Alpha’s Hombre Muerto tenements are on the outskirts of the POSCO property, noting POSCO paid US$280 million to acquire these from Galaxy Resources. Alpha Lithium is taking a fast-track approach towards reaching production, then planning to ramp up volumes thereafter.

Alpha Lithium trades on a market cap of C$158 million and has loads of potential.

Arena Minerals Inc.

Arena Minerals (Arena) has two projects in Argentina which are Sal de la Puna (11,000 hectares) in the Pastos Grandes salar, Argentina and Antofalla (6,000 hectares) located immediately adjacent and south of Albemarle’s tenements. Arena also own the Atacama Copper Project in Antofagasta, Chile.

At the Sal de la Puna Project Ganfeng Lithium has acquired a 35% project share. Ganfeng also owns a 19.9% equity stake in Arena. Lithium Americas also bought $10 million of shares in Arena recently.

Arena Minerals trades on a market cap of C$206 million. Great partners but Arena has sold some Project share at Sal de la Puna. Possible takeover target. Copper in Chile is a bonus.

Argosy Minerals Limited

Argosy Minerals (Argosy) owns a 77.5% interest (with a right to move to 90%) in their flagship Rincon Lithium Project on the Salar del Rincon in Argentina. Argosy also owns the Tonopah Lithium Project in Nevada, USA.

Argosy’s Resource is still quite small but should potentially be easily expanded when needed. Lithium grade is a bit below average at 324-369mg/L and the Mg:Li ratio is a bit high. All this means is slightly higher operating costs which is not an issue these days with surging lithium demand and very good lithium prices. Argosy is fully-funded and 45% construction completed towards their plan to expand to 2,000tpa lithium carbonate production with first product by mid-2022. Thereafter the plan is to expand by 10,000tpa lithium carbonate production to have 12,000tpa production.

The big deal about Argosy is that they are already producing at pilot plant stage with large evaporation ponds already built. This makes them one of the most advanced lithium juniors globally.

Argosy Minerals trades on a market cap of A$353 million. One of the very best and most advanced juniors.

Argosy Minerals Rincon Project is already producing battery grade lithium carbonate and working towards 2,000tpa then 12,00tpa LCE

Source: Argosy Minerals website

Galan Lithium Ltd.

Galan Lithium (Galan) is developing their flagship Hombre Muerto West (“HMW”) Project located on the west side edge of the world class Hombre Muerto Salar. Galan also has the nearby Candelas Lithium Project also at southern edge of the Hombre Muerto Salar. Galan also owns 80% of the exploration stage Greenbushes South Lithium Project which is only 3km south of the world-class Greenbushes mine.

At Hombre Muerto West, Galan has 2.3 million tonnes contained LCE at 946mg/L (very high grade) and a very low Mg/Li ratio of <2.0. When including Candelas, in total Galan has 3.0m tonnes contained LCE @858mg/L. Galan completed a very positive PEA in 2020 with a post-tax NPV8% of US$684 million.

Galan is doing further drilling in Q4, 2021 with a FS planned for 2022.

Galan Lithium trades on a market cap of A$472 million. Top class resource and looking like a future star performer.

Hombre Muerto Salar – Galan tenements (blue outline), Livent (red), Galaxy now Orecobre (yellow), POSCO (white)

Source: Galan Lithium investor presentation

Lithium South Development Corporation

Lithium South Development Corp. (Lithium South) has 3,287 hectares of tenements under purchase option at their Hombre Muerto North (HMN) Project, on the northern edge of the Hombre Muerto salar. The Project lies just north of the POSCO and Orecobre projects, and near Livent’s very successful lithium mine.

Lithium South has a M&I Resource of 571,000t contained LCE, with a high lithium grade of 756mg/L and a very low Mg/Li ratio of 2.6:1. The Project has potential exploration upside. Lithium South is trialing DLE technology in parallel with proven evaporation technology. Their environmental baseline study is also underway with Phase 1 recently completed. The Hombre Muerto North Project PEA (based only on some of the claims) resulted in a post-tax NPV8% of US$217 million and 28% IRR, based only on 5,000tpa lithium carbonate production over a 30 year mine life. Initial CapEx was estimated at US$93.3 million and OpEx at US$3,112/t lithium carbonate. These are excellent numbers, albeit for an initial smaller size production project. Lithium South is working to further expand the resource following some good TEM study results.

Lithium South trades on a market cap of C$67 million. Looks very attractive on such a low market cap.

Closing remarks

The above top 5 lithium juniors all have lithium brine projects located in Argentina. All still have reasonably low market caps and all have great potential in the years ahead. The usual risks apply to lithium juniors such as country risk, exploration risk, funding risk, permitting risk, production risk etc. In the case of these juniors, many have run up in price recently so buying in stages can add safety in case there is a price pullback.

If looking to diversify away from Argentina then some other good juniors such as Critical Elements Lithium Corporation (TSXV: CRE | OTCQX: CRECF) (Canada lithium spodumene project), Global Lithium Resources (ASX: GL1) (Australian spodumene project), and Lithium Power International Ltd. (ASX: LPI) (Chile JV lithium brine high grade project) are worth considering.

Best to take a 5 year time frame and remember to diversify. The EV boom has only just begun so lithium still has a great decade ahead.

Disclosure: The author is long all of the stocks mentioned in the article (except Livent and POSCO).




One of the world’s richest rare earth deposits continues towards resolution of issues with Burundi partner

Rainbow Rare Earths’ production in Africa to be expanded through extraction from South African mine tailings.

When it comes to rare earths it is important to identify the most valuable ones. Rare Earth permanent magnet production accounted for 91% of the total monetary value of rare earth consumption in 2019, and neodymium and praseodymium (NdPr) are the two key rare earth elements used in permanent magnets, particularly neodymium. This explains why most rare earth miners target NdPr. They are simply the most in demand and are highly valuable.

Rainbow Rare Earths Limited (LON: RBW) (“Rainbow”) is a rare earths miner targeting NdPr production at their two African rare earth projects. Rainbow’s strategy is to become a globally significant producer of magnet rare earths. Rainbow has two African-sited projects, each of which has a special attribute leading to potentially lower cost mining. Rainbow also has exclusive rights, across the SADC region of Africa, to privately owned American specialty chemical engineering company’s (KTech) rare earths continuous ion chromatography separation technology. The K-Tech process targets individual separation of rare earth from natural mixtures in fewer stages with more flexibility than traditionally used solvent extraction thereby saving on upfront CapEx and ongoing OpEx and potentially producing a higher end-value separated oxide rather than a carbonate. Testing is ongoing.

Rainbow’s two rare earths projects are:

The Phalaborwa Project (70% earn-in agreement)

The Phalaborwa Project comprises an Inferred Mineral Resource estimate of 38.3Mt at 0.43% Total Rare Earth Oxides (TREO) contained within gypsum ‘tailings’ stacked in unconsolidated dumps derived from historic phosphate fertilizer hard rock mining. Being a tailings resource eliminates the need for hard rock mining, which is expected to lead to lower operational costs. The Resource has a high-value NdPr content representing 29.1% of the total contained rare earths, measured as oxides, with economic dysprosium and terbium, key rare earths for high temperature operation of permanent magnets, as valuable by-product credits. The Project has 5-10 times higher grade NdPr than a typical ionic clay style rare earth deposit (see table below). It also has low levels of radioactive elements which means easier processing and lower costs.

Being on the site of a past mining operation, the Phalaborwa Project has excellent infrastructure and transport logistics. The Project is largely permitted and positioned in an established mining region.

Rainbow Rare Earths’ two projects have good grade NdPr, especially Gakara

Source: Rainbow Rare Earths company presentation

The Gakara Project (90% interest)

Rainbow states that “the Gakara Rare Earth Project is one of the world’s richest rare earth deposits.” Rainbow has a 90% interest in the Gakara Project with a non-dilutable 10% owned by the Burundi State. The mining permit covers a large area of over 39km2 and has a 25-year mining license that began in March 2015.

Gakara was placed on care and maintenance in June 2021 at the request of the Government of Burundi. Primary concerns of the Burundi Government are understood to relate to the pricing of the mineral concentrate currently sold under a long-term offtake agreement with a German company’s (ThyssenKrupp), trading arm. Rainbow states: “Rainbow continues to engage constructively with stakeholders to resolve the issue and allow trial mining to recommence as soon as possible.”

Highlights of the Gakara Rare Earth Project

Source: Rainbow Rare Earths website

Closing remarks

Rainbow has two exciting African rare earth projects.

The Phalaborwa Project has several advantages including:

  1. An ore tailings source, so no need for hard rock mining, crushing, or milling and hence lower production costs.
  2. High-value Nd and Pr oxide content representing 29.1% of the total contained rare earth oxides, with low levels of radioactive elements, and 
  3. An existing mining site with great infrastructure and logistics available.

The Gakara Project has outstanding NdPr grades in visible “veins” and is amenable to simple physical separation of minerals from waste rock to produce a high value rare earth concentrate. This makes for a low OpEx project. The Project is currently on care and maintenance pending the expected resolution of certain legal issues with the government of Burundi.

Risks are typical of those for junior rare earths miners including funding risk and in this case, sovereign risk in Africa.

Rainbow Rare Earths Limited trades on a market cap of £ 78 million (~US$105 million). One to follow with great interest.




COP26 focuses investor interest on the critical materials required for a cleantech global vision

COP26 is now completed and the changes will impact the cleantech sector in the years ahead. Some came away disappointed at the lack of commitment from the 197 participating countries at COP26; however, there were many positive steps as outlined below.

The major outcomes from COP26

  • The “Glasgow Climate Pact” was introduced. It aims to limit global warming to 1.5 °C. It calls for a more ambitious climate response on cutting emissions, climate management finance, and pledging to double adaptation finance, and funding for loss and damage already being caused by warming. Countries were asked to “revisit and strengthen” their climate pledges by the end of 2022.
  • New transparency rules to ensure countries report sufficient information to determine whether or not they are meeting their pledges.
  • The first ever COP decision to explicitly target action against fossil fuels, calling for a “phase-down” of unabated coal and “phase-out” of “inefficient” fossil-fuel subsidies.
  • COP26 finalised rules for global carbon trading; however under the rules, the fossil fuel industry will be allowed to “offset” its carbon emissions and carry on polluting.
  • Record-breaking pledges of US$365 million to the Adaptation Fund. This was a tripling of the amount raised last year, with first time contributions from the USA and Canada.

Note: The Adaption Fund is set up to help developing countries build resilience and ‘adapt’ to climate change.

Sectors and companies to benefit from the COP26 changes

The renewable energy sector will continue to be a beneficiary. In particular, solar, wind, hydro, and geothermal energy. So too will nuclear energy benefit. The push for a global warming increase limited to 1.5 °C, and the focus for countries to revisit and strengthen their climate pledges by the end of 2022, should also be a positive catalyst going forward for renewables and nuclear energy.

Carbon capture and storage (“CC&S”) should also continue to benefit. The “phase-down” (not “phase-out”) of coal means CC&S can continue to play a role to reduce carbon emissions.

Zero-emission vehicles such as electric vehicles (“EVs”) indirectly got a boost with the COP26 decision to phase down “inefficient” fossil-fuel subsidies. If implemented fossil fuels would become relatively more expensive making EVs relatively more attractive.

Those companies working in the cleantech sector will benefit from the renewed COP26 push to reduce emissions.

Many InvestorIntel member companies set to benefit

When you look over the list of InvestorIntel member companies the standout feature is that many are involved, either directly or indirectly, in the cleantech and green related sectors. For example, Carbon Streaming Corporation (NEO: NETZ) invests into carbon credits, Cielo Waste Solutions Corp. (TSXV: CMC | OTCQB: CWSFF) turns polluting waste into renewable fuel, dynaCERT Inc. (TSX: DYA | OTCQX: DYFSF) reduces emissions from vehicles, H2O Innovation Inc. (TSXV: HEO | OTCQX: HEOFF) uses technologies to create clean water and treat wastewater, Ideanomics, Inc. (NASDAQ: IDEX) is investing in and supporting the EV industry, Nano One Materials Corp. (TSX: NANO) works to develop and commercialize better and cheaper cathodes for lithium ion batteries, and NEO Battery Materials Ltd. (TSXV: NBM) is developing silicon anodes for lithium ion batteries..

The mining companies that produce or are working to produce the raw materials that go into solar and wind energy, as well as electric vehicles, batteries, and other energy storage products, stand to benefit. This includes the rare earths (Appia Rare Earths & Uranium Corp. (CSE: API | OTCQB: APAAF), Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF), USA Rare Earth, LLC, Vital Metals Limited (ASX: VML); lithium (Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF), Critical Elements Lithium Corporation (TSXV: CRE), Neo Lithium Corp. (TSXV: NLC); cobalt (CBLT Inc. (TSXV: CBLT), Global Energy Metals Corporation (TSXV: GEMC); graphite; nickel (Nickel 28 Capital Corp. (TSXV: NKL); manganese; copper (Kodiak Copper Corp. (TSXV: KDK), Murchison Minerals Ltd. (TSXV: MUR); vanadium and scandium (Imperial Mining Group Ltd. (TSXV: IPG), Scandium International Mining Corp. (TSX: SCY). Another is the rare earths’ magnet materials maker Neo Performance Materials Inc. (TSX: NEO).

Finally, a phase-down of coal is a positive for the smart nuclear sector and hence the uranium miners and explorers such as Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR), Ur-Energy Inc. (NYSE American: URG | TSX: URE), Western Uranium & Vanadium Corp. (CSE: WUC | OTCQX: WSTRF), Fission 3.0 Corp. (TSXV: FUU | OTCQB: FISOF), Appia Rare Earths & Uranium Corp. (CSE: API | OTCQB: APAAF), and Azincourt Energy Corp. (TSXV: AAZ).

Closing remarks

COP26 was perhaps more successful than what some are reporting. The phase-down of coal is a good achievement, with India joining this for the first time. The new transparency rules are underappreciated, given currently that there are no penalties for not following the climate change targets (only naming and shaming). New rules for global carbon credits trading are also a positive step forward. Also, the tripling of pledges to the Adaptation Fund to help developing companies is welcome.

Investors could look through the list of InvestorIntel members and select the companies that they think best align with the COP26 changes and the massive trend towards reducing emissions and producing green energy and technology this decade.

See you next time for COP27 in November 2022, this time in Egypt.




Copper, Lithium, and a Presidential Election in Chile, why does it matter?

Now that COP26 has concluded perhaps some other items will begin to show up in the news cycle. However, unless you dig deep you may not be aware that on November 21st Chileans go to the polls to elect a new president. You may be wondering why I picked an election in Chile as something to pay attention to given all the things going on in the world today. I have to admit that I’m a little concerned about the build-up of Russian troops on the Ukrainian border in response to complaints of increasing NATO activity in the region. And you just never know what’s going to happen when the Chinese and U.S. get together to discuss economic and military tensions. Yet despite all that I think the Chilean election could have greater global ramifications depending on the outcome…or it could be a non-event.

The reason for having a look under the hood at Chile’s election is two-fold. One is that the leading candidates in the polls are currently from the far left and the far right, neither are from Chile’s mainstream political parties. The second is Chile’s contribution to two very top-of-mind commodities at present: copper and lithium. Has this information started to pique your curiosity? If it hasn’t then it should and here’s why.

In today’s economic reality, as we move towards a cleaner, greener world with less carbon emissions, we are going to need a lot of copper to build out all the electrical infrastructure and of course lithium has been termed as the gasoline of the future. We’ve covered the macro necessity of both these commodities enough at InvestorIntel, so I won’t get into the weeds on everything regarding copper and lithium. However, I will say that Chile is the world’s largest miner of copper by a long shot. Mine production in Chile is approximately 28% of all copper mined in the world and the country  is estimated to contain 23% of global copper reserves. Those are the kind of numbers copper investors need to pay attention to.

As for lithium, it’s almost as impressive with Chile being part of the renowned Lithium Triangle. The Lithium Triangle is a lithium-rich region in the Andean southwest corner of South America, spanning the borders of Argentina, Bolivia, and Chile. Roughly 58% of the world’s lithium resources are found in these three countries, according to the 2021 USGS Mineral Commodity Summary. Although Chile only accounts for an estimated 11% of global lithium resources, they are currently the world’s second-largest producer with approximately 22% of the world’s lithium production. Again, this is enough material so that any sort of disruption to order or rule of law could have serious ramifications that ripple around the world.

As much as I like to brag about Canada being rich in commodities, Chile is knocking it out of the park when it comes to copper and lithium. Hence the reason I’m paying attention to this election given the importance to a nation’s commerce of an orderly transfer of power.

Now let’s take a closer look at the background heading into this election. This is the first election since widespread protests over inequality rocked Chile in 2019. Some of those protests turned violent, with riots, arson attacks, looting and violent clashes with police, all sparked after the government increased public transportation fares. Things were bubbling below the surface for a while and this was the ignition point. Needless to say Covid impacts to the economy and its people further exacerbated these issues. This led to Chileans voting in a referendum in October, 2020 to rewrite Chile’s constitution which appeared to be the writing on the wall for the center-right coalition government that is currently in power. Then in May of this year, Chileans voted again in an election for delegates who would rewrite the constitution. The ruling coalition failed to pick up the one-third of seats necessary to block radical changes to the constitution. Meanwhile, the center-left, which has dominated politics since the end of Augusto Pinochet’s 1973-1990 military dictatorship, garnered less support than leftists who have been pushing for wholesale change to the ‘Chilean model’ that has been credited with fomenting growth, but also with deep inequality.

That’s the macro reasoning but layered on top of that are a couple of micro issues that investors should also be aware of. The country is debating a controversial mining royalty bill which could sharply hike tariffs on the sector. The royalty bill, under discussion in Congress, could shut down the country’s private miners by slapping a 3% royalty on sales of copper with a sharp escalator as copper prices rise. As well, there is a new glacier protection law, which could impact some key mines.

The people of Chile want change and it looks like they will get it with the polls being led by far left hopeful Gabriel Boric and ultra conservative front-runner, Jose Antonio Kast. Thus far both candidates have kept their powder dry on mining during the campaign. Left-wing candidate Boric has discussed royalties while Kast has proposed vague changes to mining property law to rev up the sector, including opening up state miner Codelco to more private investment. At this point, it’s difficult to understand what either candidate could mean to Chile’s future as a mining powerhouse. Nevertheless, investors should be putting this election on their radar as there is potential for a lot more downside than upside, in my opinion. With that said, my hope is that this election is a non-event and results in an orderly transfer of power from one democratically elected party to another.

It should be noted that if no candidate gets a simple majority this coming Sunday, the top two will compete in a head-to-head ballot on Dec. 19. The polls suggest this is likely the next date you’ll have to mark in your calendar if you feel, as I do, that  it could be important to know who is the next President of Chile.




The Post-COP26 World Looks To Australia For Future Non-Chinese Rare Earths Production

To achieve U.N. climate change management goals the world needs to shift rapidly to clean energy, and that means we need to build or secure, reliable sources of rare earths. While the USA and Canada have made some progress in this direction, Australia will also be needed to play a key role.

When looking at a chart of rare earths reserves by country, China shows the largest reserves followed by Vietnam, Brazil, Russia, India, and Australia, in that order. The USA is ranked 8th and Canada is outside of the top ten. Given Australia’s stellar track record as a reliable supplier of raw materials, it should not be surprising to know that the West is looking towards Australia to step up production of rare earths, especially those needed to support the surging cleantech sectors of electric vehicles, wind energy, and solar energy.

ClearWorld.us says it well, stating:

“Renewable energy development relies upon sufficient quantities of rare earth minerals, specifically neodymium, terbium, indium, dysprosium, and praseodymium. These are used in the production of solar panels and wind turbines. If the world is to meet the greenhouse gas emissions targets sought in the Paris Climate Agreement the availability of these minerals must increase by 12 times by 2050.”

(Emphasis by the author.)

Rare earths are key elements in the cleantech revolution

Australian listed rare earths companies:

Producers

Lynas Rare Earths Limited (ASX: LYC) (“Lynas”)

Lynas is the second largest neodymium and praseodymium (“NdPr”) producer in the world. Lynas owns the Mt Weld rare earth mine, which is one of the world’s highest grade rare earths’ mines, and the Mt Weld ORE Concentration Plant, both located in Western Australia. Lynas also owns the Lynas Advanced Materials Plant (LAMP), which is an integrated manufacturing facility, separating and processing rare earths’ materials in Malaysia. The Lynas 2025 growth strategy encompasses plans to build the Kalgoorlie Rare Earths Processing Facility (cracking and leaching) in Australia and an LRE/HRE separation and specialty materials facility in the USA. Lynas trades on a market cap of A$7.3 billion.

Iluka Resources Ltd. (ASX: ILU) (“Iluka”)

Iluka is a relatively new (April 2020) producer of rare earths at their Eneabba Project in Western Australia. Iluka intends to ramp to selling 50,000 tpa of a 20% monazite-zircon ore concentrate for further processing offshore. Iluka has an offtake agreement for 50,000 tpa. Iluka is working on developing a Phase 2 of the Eneabba Project which involves investigating techniques to beneficiate and purify the monazite to an 80% concentrate for sale further down the value chain. Iluka is mostly known for being an Australian heavy mineral sands, zirconium and titanium, producer. Iluka trades on a market cap of A$3.5 billion.

Vital Metals Limited (ASX: VML) (“Vital”)

Vital recently began mining ore at its Nechalacho’ Mine in Canada’s Northwest Territories (NWT), with commencement of ore processing at Vital’s, under construction, Saskatoon cracking and leaching facility expected to begin in 2022. The Nechalacho Mine is a high grade, light rare earth (bastnaesite) project with a world-class resource of 94.7Mt at 1.46% REO (measured, indicated and inferred). Nechalacho’s North T Zone, which is being mined by Vital, hosts a high-grade resource of 101,000 tonnes at 9.01% LREO (2.2% NdPr). Vital has a non-binding MOU with Ucore Rare Metals Inc. for the supply to it of a mixed rare rare earth carbonate, beginning H1 2024. Vital Metals trades on a market cap of A$250 million.

Explorer/Developers (in alphabetical order):

Arafura Resources Limited (ASX: ARU) (“Arafura”)

Arafura 100% own the Nolan’s Bore rare earth project 135kms from Alice Springs in the Northern Territory, Australia. Arafura states: “The Project is underpinned by low-risk Mineral Resources that have the potential to supply a significant proportion of the world’s NdPr demand. It is a globally significant and strategic NdPr project which, once developed, will become a major supplier of these critical minerals to the high-performance NdFeB permanent magnet market.”

The deposit contains a JORC 2012-compliant Mineral Resources of 56 million tonnes at an average grade of 2.6% total rare earth oxides (TREO). 26.4% of the total rare earths contained are  NdPr. The Project is supported by Export Finance Australia (EFA), and the Northern Australia Infrastructure Facility (NAIF), via non-binding letters of support for a proposed senior debt facility of up to A$200 million and A$100 million respectively. Arafura is looking to raise further funds to get the project started. Arafura recently stated: “The momentum with offtake discussion has enabled engagement to expand to include the options for strategic investment as part of the Nolan’s project funding.” Market cap is A$379 million.

Australian Rare Earths Limited (ASX: AR3) (“AREL”)

AREL is progressing in the exploration of a significant deposit of valuable ‘clay-hosted’ rare earth elements, located at their Koppamurra Project spread over ~4,000km²  of tenements in South Australia and Victoria. Past exploration of the Koppamurra region has shown it contains mineralization containing the rare earth elements neodymium, praseodymium, dysprosium and terbium. The Koppamurra Project is an ‘ionic clay’ rare earth opportunity with a 2021 JORC Inferred Mineral Resource of 39.9Mt @ 725ppm TREO. AREL trades on a market cap of A$98 million.

Australian Strategic Materials Ltd. (ASX: ASM) (“ASM”)

ASM owns the Dubbo Rare Earths Project in NSW, Australia. The Dubbo Project is a 100% owned ‘construction ready’ poly-metallic and rare earths project with potential to become a key global supplier of specialty metals and rare earths. ASM’s goal is a “mine to metal” strategy to extract, refine and manufacture high-purity metals and alloys, supplying directly to global technology manufacturers. Market cap is A$1.92 billion.

Northern Minerals Limited (ASX: NTU)

Northern Minerals own the Browns Range heavy rare earth minerals project in Western Australia. Northern Minerals has built a pilot plant to test a number of deposits and prospects that contain high-value dysprosium and other Heavy Rare Earths (HREs) such as yttrium, hosted in xenotime mineralization.

The Company states: “Northern Minerals is positioned to become the world’s first significant producer of dysprosium outside of China. Accounting for 60% of the Browns Range Project’s (the Project) revenue, dysprosium is the key value driver of the Project and is at the core of Northern Minerals’ marketing strategy. With a high value, high purity, dysprosium rich product, the Company is set to become a long term and reliable supplier of dysprosium and other critical heavy rare earths to world markets.” Market cap is A$339 million.

Peak Resources Limited (ASX: PEK)

Peak Resources 75% owns the Ngualla Tanzania rare earth project, which the Company states is one of the world’s, largest and highest grade, undeveloped rare earth projects. The Ngualla Project has ore reserves of 18.5 million tonnes at 4.8% REO; 22% of the total mineral resource is NdPr, with an expected 26 year life of mine. The Project is currently at the funding stage having completed a BFS in 2017. The BFS summary details are here. About 90% of the Project’s revenues will be coming from NdPr. Peak Resources state: “Operating cost of US$ 34.20/kg NdPr* Oxide, demonstrating potential to be the world’s lowest-cost fully integrated rare earth development project.” Market cap is A$135 million.

Closing remarks

With rare earths demand set to grow strongly this decade as the world moves towards cleaner energy and technology, investors would be wise to take a second look at the rare earths sector.

Australian critical minerals projects were recently in the news after the Government announced that they would receive an A$2 billion boost (via a loan facility), to support the sector. This bodes well for the Australian rare earths junior miners to join Lynas as producers. Stay tuned as this sector looks set to shine this decade.