Search Heading for the Rare Earth Podium
Search Minerals Inc. (TSXV: SMY) (“Search”) have received considerable coverage of late. It’s no secret that the rare-earths market is a risky place to bed down, yet Search have managed to live-on through some seriously tough times; their share price has shown a strong positive trend over the last twenty-four months, and with a healthy market cap of $15.5m, no less. Let’s take a minute to delve a little further into their operation and see what makes them so much more robust than the myriad of rare-earth element (REE) explorers that have floundered in their wake.
These days, a REE developer simply cannot rely on their geology alone; gone are the days when you could stick a flag in a pile of rock and get paid, after all, the world is a big place, and any market with significant hype is going to motivate hordes of wannabe-Lara-Croft-types to start digging for buried treasure. The committed explorer, however, will ensure that they are protected from collapse when the hype bubble eventually bursts by having a serious and well-thought-out technique that is designed to add value to their discovery once it’s been sprung from its tomb.
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Not only do Search possess some of the bigger and better resources that the industry currently has to offer, but their proprietary Direct Extraction Metallurgical process has advanced through its testing stages with massive promise. Normally, producing an REE-mix to the standard expected by a refinery is costly, and by eliminating several stages of the standard process, Search have produced a 98.99% pure rare-earth mix while significantly reducing both CapEx and OpEx. The technique is patent-pending, and even allows for the tailings to be deposited straight back into the open pit once processing is complete.
Such an ingenious application of simplicity brings benefits that are attractive enough to make sourcing offtake vastly easier than going for high prices, and with a resource like FOXTROT, the company represents a great investment for believers in the REE story. An issue frequently encountered with exploration companies is ore-stocks that won’t last long enough for decent growth to be observed. The FOXTROT site, however, has a projected mine-life of fourteen years, plenty of time to see refineries snap-up the opportunity to take material from an environmentally friendly mine in the perfectly stable jurisdictions of Newfoundland & Labrador.
Furthermore, two additional discoveries at the aforementioned project have generated yet more attention and investment that will be utilised to advance the resources through drilling and permitting towards full production. Nearby, a site termed Deep Fox has revealed very similar geology and mineralization to its namesake, as has a further region now known as Fox Meadow. While these areas have yet to be drilled, they should contribute significantly to Search’s stockpiles and cause a surge in value once proven.
Production from FOXTROT is projected to total 36,700 t of Total Rare Earth Oxides (TREO) contained in a mixed rare earth precipitate. Revenue projections for FOXTROT are dominated by Neodymium (39%), Dysprosium (29%), Praseodymium (14%), and Terbium (8%); all elements that are projected to remain in supply deficit as the world continues to seek to manufacture advanced permanent-magnet-based motor systems for electric vehicles, generators, and even drones.
In late March, Search announced a non-brokered private placement resulting in proceeds of $3,060,000 that will be used to complete drilling works at FOXTROT and fund environmental assessment applications. Trust and confidence remains high in the management team, and time is running out to participate in the rarest of success stories that is rare-earth element extraction. Great resources, combined with the humility to favour simplicity over grandiosity will ultimately be what puts Search on the podium.
Lara has been an analyst for over ten years, starting her career as an equity analyst at Foord Asset Management and more recently as the ... <Read more about Lara Smith>