EDITOR: | March 30th, 2015 | 6 Comments

Pele Mountain Executes MOU with Major Chinese Rare Earth Player to Pursue Opportunities of Developing Rare Earth Processing Facilities in Elliot Lake

| March 30, 2015 | 6 Comments

March 30, 2015 (Source: Marketwired) — Pele Mountain Resources Inc. (TSX VENTURE:GEM) (OTCQX:GOLDF) (“Pele” or the “Company“) announced today that it has entered into a Memorandum of Understanding (“MOU“) with Sheng Kang Ning (Shanghai) Mining Investment Co. Ltd., (“SKN“) to jointly pursue the opportunity of developing rare earth processing facilities at Pele’s Eco Ridge property in Elliot Lake, Ontario (the “Eco Ridge Property“).

SKN is a foreign investment platform, and 90-percent owned subsidiary, of Shenghe Resources Holding Co. Ltd., (“Shenghe“) (SH 600392), a global leader in rare earth mining, processing and downstream chain. SKN & Shenghe possess proprietary technologies for environmentally sustainable, low cost, rare earth processing and have the expertise and experience to design, build, and operate rare earth processing facilities.

The MOU sets out the terms under which Pele and SKN (the “Parties“) will work together, subject to the approval from relevant Chinese and Canadian government authorities, on an exclusive basis within Canada, to negotiate a definitive agreement (the “Definitive Agreement“) to establish a joint venture for the sustainable development and operation of a state-of-the-art monazite processing facility and downstream value added rare earth processing facilities, to be located on Pele’s Eco Ridge Property. (Neither party shall be under any restriction with respect to carrying on such business outside Canada.)

Under the MOU, the Parties will negotiate a Definitive Agreement that incorporates the following proposed terms, among others:

  • a stated purpose to maximize financial benefits to both Parties through the sustainable development of continuous, reliable rare earth processing operations;
  • The JV is to be owned 50.1-percent by SKN and 49.9-percent by Pele;
  • SKN will use its processing technologies for the JV to process monazite concentrate (subject to approval of Chinese authorities) and Pele will lease a portion of its lands to the JV for construction of the Project, both on a commercial basis;
  • SKN (or qualified third parties nominated by SKN) shall be retained by the JV to design and construct the processing facilities.
  • The Definitive Agreement will set out the duties of SKN as operator of the processing facilities;

Pele President Al Shefsky stated, “We are delighted to enter into this MOU with SKN. The MOU represents a strong endorsement for Pele’s monazite processing strategy, and is an important first step to bringing the experience and expertise of a proven global leader in rare earth processing to our Project in Elliot Lake, Ontario.”

The MOU remains non-binding other than the provisions relating to confidentiality, exclusivity, jurisdiction and certain other standard clauses, which are intended to be binding. Unless the Parties agree to extend the MOU, it will automatically expire in its entirety, if the Parties do not satisfy and waive their respective due diligence and other conditions and negotiate and execute the Definitive Agreement on or before September 30, 2015.

About Pele

Pele Mountain Resources is focused on the sustainable development of a low cost, early to market, critical rare earth supply by processing high-grade rare earth bearing monazite in Elliot Lake, Ontario, at the same location as its Eco Ridge Mine Rare Earth and Uranium Project. With excellent regional infrastructure and strong local support, Elliot Lake is an ideal location for production of a safe, secure, and reliable supply of critical rare earths and uranium. Pele shares are listed on the TSX Venture Exchange under the symbol “GEM” and on the OTCQX under the symbol “GOLDF”.

About SKN & Shenghe

Sheng Kang Ning (Shanghai) Mining Investment Co., Ltd. (“SKN”) is a mining investment company registered in China (Shanghai) Pilot Free Trade Zone∩╝îfocusing on worldwide mining investment and financing, mining consultancy, geological exploration and mining development. SKN is 90% held by Shenghe Resources Holding Co., Ltd. (“Shenghe”), serving as its investment platform and technical consulting center. Shenghe is a fully integrated rare earth production company, listed on Shanghai Stock Exchange (600392.SH), focusing on rare earth mining, beneficiation, metallurgy, separation, downstream processing and marketing. As a leading rare earth player, Shenghe is actively looking for cooperation opportunities all over the world by means of technical assistance, equity investment, off-take arrangement etc.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe Pele’s future plans, objectives or goals, including words to the effect that Pele or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

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    First Heavy Rare Earth Separation Plant in North America with Chinese technology.

    March 30, 2015 - 2:57 PM

  • hackenzac

    We’ve seen how those MOU’s work out.

    March 30, 2015 - 3:24 PM


    A MOU wouldn’t be in play unless the Govt of Canada approved of the JV. This is my solution to Lifton’s Separation Plant hole to recreate a manufacturing supply chain in North America, the Chinese have the capital and the technology so we make this happen by creating the banking system to finance the infrastructure in Canada. No foreigner can buy Rare Earth in Canada but the can become a partner. The Academic infrastructure to train and develop the industry has been in place for several years.

    March 30, 2015 - 3:36 PM

  • BattlefieldRareEarths

    I learned from someone who had attended Pele’s AGM that they are also talking to a supplier who would be able to provide them approximately 9,000 tonnes of Monazite concentrate annually. With the present cost of monazite concentrate running at around $2,500 / tonne and the seperated rare earths fetching approximately $10,000 / tonne as long as Pele and SKN can keep the costs of processing to less than $2,500 this project looks particularily promising. I would look for additional news in the coming months. – BRE

    April 2, 2015 - 2:00 PM

  • Jack Lifton

    Veritas Bob,

    Right on. Baotou costs are today many times that figure, and it is producing Ce and most of its lanthanum at a loss soda so as to obtain Pr/Nd for magnets.

    Pele has made a good move in responding to Shenghe, but it is dealing with a subsidiary that is an engineering group that builds SX plants. There is no market for new SX plans in vastly overcapacitized China, so like anyone else who produces goods or services you try and sell them in the markets where there is demand.
    There is not even a smidgen of hard information from which to make statements of the costs associated with building, much less running, an SX plant dedicated to monazite near Lake Huron in Elliot Lake, Ontario.But that doesn’t seem to stop the uninformed list members who cannot control their delusional and illusional belief that they know something about rare earth separation technologies.
    As for an 8000 ton capacity plant being built off the beaten path this is pure nonsense. That would be a very big plant indeed. One as large as ANY in China today. Such plans take years to construct and bring into operation. In case the readers haven’t noticed It was size that killed the Molycorp beast. Bringing a large SX plant into operation and maintaining its quality and output is a monumental job not to be undertaken lightly or with short deadline!


    April 2, 2015 - 11:11 PM

  • BattlefieldRareEarths

    Hi Jack,

    I was wondering if you might be able to shed some light on the “potential” separation costs associated with monazite recycling which would help put this project into perspective. After reviewing Al Shefsky’s comments and digging around the internet I know the TREO content of the monazite concentrate is approx 50 – 60%, although finding out what the content of the individual oxides is a little harder to find accurate sources. Any information you can provide would be greatly appreciated.

    Thanks in Advance.

    April 8, 2015 - 9:23 AM

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