EDITOR: | October 11th, 2015 | 11 Comments

Texas Rare Earth Chairman on the recent contract with the U.S. Defense Logistics Agency

| October 11, 2015 | 11 Comments

October 11, 2015 — Tracy Weslosky, Editor-in-Chief and Publisher of InvestorIntel speaks to Anthony Marchese, Chairman of Texas Rare Earth Resources Corp. (OTCQX: TRER) about the recent announcement for the strategic materials research contract with the U.S. Defense Logistics Agency (DLA). Understanding the significance that “this is the first time the United States has ever given anybody a contract to produce anything”, Anthony goes onto to price point benefits of producing certain rare earths at ultra-high purity. Anthony will be on The impact of China’s economic turmoil & challenges in today’s technology metals supply chain panel at the upcoming Global Technology Metals Market summit on Wednesday, October 14th in Toronto, Canada.

Tracy Weslosky: I’m so delighted to be discussing your most recent news release — a substantial announcement for the overall industry. Are you not the first rare earth company to have a deal with the U.S. Defense Logistics or is this not the Department of Defense?

Anthony Marchese: As the press release pointed out, the deal is part of the Department of Defense. They are responsible for this particular division, which gave us the contract and is responsible for the stockpiling of rare earths. To the best of my knowledge this is the first time the United States has ever given anybody a contract to produce anything. I know in the past they’ve given small contracts for research into study of the market, but in terms of production, this is I believe the first of its kind.

Tracy Weslosky: Well, can you give us the ten-story vantage point on this deal? Because I know Jack was trying to explain how much bigger this is, but I’d like to hear it from you…

Anthony Marchese: Obviously the terms of the agreement are exactly what’s in the press release. I have to be careful about what I say due to confidentiality, but as the press release stated the DLA is interested in bench scale quantities of certain rare earths. They’ve mentioned two, yttrium at an ultra-high purity level five nines or better and yttrium which they’re looking for a standard four nines. They’re also interested in a third, which at their request we’re not disclosing and that’s also an ultra-high purity. I don’t think people quite take into account or appreciate the ultra-high purity nature of two of those three. Ultra-high purity products sell anywhere from three to five times the market price. So for example, yttrium today if you could produce it at a five or six nines would trade at roughly three to four times the market price. For us there’s an opportunity not just to show the DLA, obviously the Defense Department by extension that we could do this — but secondly it adds a new dimension to our economics because we could go out and sell a certain portion of our output at a significantly higher price than that quoted in metalpages or the Chinese internal market. It’s significant on two levels.

Tracy Weslosky: Anthony according to my conversation with Jack what he was really stressing about this new release was kind of like an acknowledgement from the government for your extraction technology. Can you talk to us just a little bit more and give the InvestorIntel audience an overview about the K-Technologies and Texas Rare Earth extraction technology process because Jack seems to be a very strong enthusiast and  supporter of this…to access the complete interview, click here

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  • Jeff Thompson

    This is a very positive development, both for Texas Rare Earths, and also in a broader sense, to see the U.S. government take a more active role in the establishment of domestic supply chain, as well as exercising the emerging improved techniques for high purity separation and refinement. In particular, TRER has a strong distribution of some of the smaller-market heavy rare earth elements holmium, erbium, thulium, ytterbium, and lutetium, in addition to healthy deposits in the more established markets for dysprosium, terbium, and small amounts of neodymium and praseodymium. Factoring in non-REE assets such as the recent uranium offtake agreement, and potential to further quantify the scandium, beryllium, and lithium components of the deposit highlight that TRER’s market cap (currently about $9 million) has been running at several multiples below its HREE peers, who have typically been in the $15-40 million range recently.
    In my view, this contract paints a bright picture for ROW, ex-China supply across the spectrum of REEs, with Lynas in actual, strong production of LREEs and several good prospects for future production of HREEs (Tasman, Northern Minerals, Ucore, Alkane, Texas Rare Earths) to round-out the rest of the suite of REEs, as well as other important elements.
    Please keep up the hard work, TRER.
    Jeff Thompson

    October 11, 2015 - 11:23 PM

  • John

    Ucore has been in a multi-stage agreement with the DLA since 2012.
    They are soon completing their pilot testing of the MRT separation process that is already proven to separate the full lanthanide suite at +99% recovery with +99% purity. I find statements in this article somewhat misleading.


    October 15, 2015 - 12:26 PM

  • alvarita

    I find your statements somewhat misleading. What was or is the result of the “multi-stage” agreement between Ucore and the DLA? It’s three years since the agreement. Secondly, how could you know that pilot plant testing of the MRT process is soon being completed when the pilot plant isn’t finished being built, according to its builder? It would appear that TRER has been contracted to actually produce something, which is setting a much higher bar than previously reported contracts. It would be nice to see someone produce anything that is confirmed and certified by independent entities.

    October 16, 2015 - 1:35 PM

  • John

    Dear Alvarita,
    I find your statement about my statement misleading.
    “It would be nice to see someone produce anything that is confirmed and certified by independent entities.”
    Here you go:

    October 18, 2015 - 8:20 AM

  • alvarita

    Dear John,
    Who or what are the independent entities of which you speak? “Independent” generally means not associated with or not connected to.

    October 18, 2015 - 10:55 AM

  • John

    Dear Alvarado.

    If you are implying that the separation announcement made by Ucore should be dismissed because it was not reviewed by an “independent” entity then it is clear that I am wasting my time engaging you in any discussion on this topic.


    October 18, 2015 - 11:20 AM

  • hackenzac

    Your troll detection unit works well John.

    October 18, 2015 - 11:48 AM

  • Tracy Weslosky

    Alright gentlemen – This is an interview on Texas Rare Earth Resources. Can we move the UCORE debate over to the most recent UCORE interview? Let’s give TRER a serious bow of respect for securing this deal and drawing our attention to the interest in “ultra high purity REOs”:

    And yes, do not worry — I am speed dialling Jim on Monday to coordinate an update interview. What I would like is for Christopher Ecclestone to do this one! I just love his work! Tracy

    October 18, 2015 - 12:10 PM

  • Jeff Thompson

    It will be interesting to see if Texas Rare Earths and other companies in future PEA/PFS/economic reports will also consider including rare earth metals at high-purity that some of them are increasingly capable of producing, to supplement the economics of their baseline rare earth oxide production targets. Will the price premiums the rare earth metals can command offset the additional processing costs sufficiently to make it worthwhile including in the overall product mix?

    October 18, 2015 - 5:02 PM

  • alvarita

    TRER’s K-Technology looks promising, especially for producing high purity metals. They could take the lead in the rare earth sector if the technology pans out.

    October 19, 2015 - 1:14 PM

  • JOE O

    Would love some feedback from tech metals conference last week
    UCORE has taken a dump since
    Wonder if anything of substance was said.

    October 19, 2015 - 1:46 PM

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