New AI methods attract capital to mining sector

Here is an unavoidable truth. Resource extraction is hard physical work. Even in today’s tech-happy world, there’s no app for that. And perhaps this is the very reason modern investors have wandered away from mining—whether or not it’s to their benefit. New AI methods may change that.

Just like society, many investors today are overlooking the connection between the products we use and the source of the materials to make them. And yet it’s still true that “if you cannot grow it, you have to mine it.” Comically, we see generous valuations for end products but outright hostility toward the companies providing the basic materials to create the products. New flashy sectors like digital currencies, online commerce and cannabis are grabbing the spotlight while the basic source of materials for many everyday needs falls into the shadows.

Yes, some of this shunning may be deserved. The mining industry for the most part is still trying to use a classical economics appeal to attract investors. They trot out supply and demand fundamentals, and costs of production, hoping the market will make rational investment choices based on the facts. But as much as investors claim to be rational, there is a significant chunk of sentiment associated with attracting capital to any sector.

It will take more than just facts to win back investors. Some may hold a negative impression or position on the sector, one that has been reinforced with poor performance in recent years. And so funding for mining exploration is declining and, not surprisingly, so are discoveries.

But here is another unavoidable truth. Demand for resource materials increases alongside the development of society.

The next generation of ideas

The industry needs to attract capital with new ideas to streamline the process of value creation. To illustrate, let’s look at GoldSpot Discoveries Corp. (TSXV: SPOT). GoldSpot is a technology company striving to be a disruptor in the industry of mining exploration and investment. Its proprietary technology uses AI and machine learning to interpret underused data and to spot sites with the potential to host a mineral deposit.

Mining a mountain of data

The simple idea behind the big-data idea is to exploit the abundance of data collected in the world’s mining camps. In the past, there was not enough time, talent and skill to evaluate it all, even as still more data was being created. GoldSpot uses AI and machine learning and other tools to organize and analyze the data. The geologist spends less time collecting the data and more time interpreting the results—potentially making new discoveries.

GoldSpot is confident in its abilities to use machine learning to identify good exploration projects and the company wants to participate in their development and success through investments, royalties and consulting work. Their list of clients already includes significant names from the industry: Hochschild Mining, McEwen Mining, Sprott Mining and Yamana Gold.

Recently GoldSpot announced that Gran Colombia Gold Corp. used their methods at their Segovia project. The preliminary targets were confirmed through drill results at near mine and regional targets. This truly is a new idea: a client company that gives confirmation and relates success to the service provider. In the mining sector, new technology often faces challenges in development, promotion and acceptance. The sector does not change its methods quickly.

Fast on the heels of this success came the announcement of a $15 million strategic investment by Eric Sprott and plans for a 70,000 m drilling program on the Segovia project to further test these targets. This too validates GoldSpot’s AI and machine learning methods for doing exploration differently.

Now GoldSpot is working on another significant opportunity to showcase their method and further develop their tools. Through a deal with Metal Earth project and Laurentian University, GoldSpot will sort through this significant and large dataset to identify the characteristics of metal endowment in Canada’s mining camps.

The AI effect on the market

Impressively, quantitative analysis of the markets is driving up to 65% of returns during the past 20 years. And more investment funds are using this method for stock selection. On the other hand, these methods are also partially responsible for the drop in investment in the mining sector, particularly in exploration. And yet GoldSpot is using these same methods to analyze exploration results and market data to identify the best targets for investing in this opportunity gap.

For the tech-minded investor or mining company, AI and machine learning methods are revealing opportunities that can change minds and grow investments for exploration.




MI3 Market Alert: Advancing the next Palladium mine

Mario Drolet President of MI3 Communications Financières Inc. (MI3) released a technical note at market open today on Platinum Group Metals Ltd. (TSX: PTM | NYSE American: PLG) for exclusive distribution on InvestorIntel. In this note, MI3 highlighted the following points on Platinum Group Metals Ltd.

  • Platinum Group Metals Ltd. is the operator of the Waterberg Project, a bulk underground palladium and platinum deposit located in South Africa (large scale palladium dominant mine).
  • Proven and probable reserves of 19.5M ounces of 4E (Palladium, Platinum, Gold and Rhodium)
  • Total all in cost 767US$
  • The Waterberg Project is supported by a group of strategic investors: IMPLATS (15% interest in the Waterberg project), JOGMEC (12.95% interest in the Waterberg project) and HOSKEN CONSOLIDATED INVESTMENTS (owns 30.2% of Platinum Group Metals)
  • PTM stock traded over 1.6 Million shares between $1.36 & $2.71
  • Support: S2; $1,60    S1; $1.85   Resistance:   R1; $ 2.12   R2; $2.50

About Platinum Group Metals Ltd.

Platinum Group Metals Ltd. is the operator of the Waterberg Project, a bulk underground palladium and platinum deposit located in South Africa. Waterberg was discovered by Platinum Group and is being jointly developed with Implats, Mnombo, JOGMEC and Hanwa. Waterberg has the potential to be a large-scale, low-cost producer of palladium, platinum, rhodium and gold. The Company recently founded Lion Battery Technologies in partnership with Anglo American Platinum to support the use of palladium and platinum in lithium battery applications.

PLEASE DO YOUR DUE DILIGENCE

Disclaimer: This MI3 Technical Note produced by MI³ Communications Financières is neither an offer to sell, nor the solicitation of an offer to buy any of the securities discussed therein. The information contained is prepared by MI3, emanating from sources deemed to be reliable. MI3 Communications Financières makes no representations or warranties with respect to the accuracy, correctness or completeness of such information. MI³ Communications Financières accepts no liability whatsoever for any loss arising from the use of the information contained therein. Please take note that for compliance purposes, all directors, consultants or employees of MI3 Communications Financières are prohibited from trading the securities of the company and MI3 Communications Financières is a shareholder and do not intend to sell any shares during the distribution of this note.

 




Jack Lifton with Gareth Hatch on Rare Earths in the Rest of the World

Note from the Publisher: Rest of the World (ROW) is often utilized in rare earths discussion to the market, not including China.

“Innovation Metals (IMC) is a private Canadian company. We have been working for some time now on the development of a proprietary separation and purification process that we call RapidSX™. We started working with rare earth elements and some other technology metals with that. It is an accelerated form of solvent extraction (SX) which is the primary process used in the industry for rare earth separation and combines the benefits of the chemistry of SX with a new way of making the process happen at a much faster rate, reduce footprints and various benefits. In the spring of this year, I encountered the folks at Hexagon. They are an Australian firm listed on the ASX and primarily involved in graphite at that point. They have a couple of projects. One is Australia, one in the US in Alabama and they are getting into the downstream looking at processing, looking at the end uses. They are trying to expand into energy materials side of things… they looked at the RapidSX™ work that we have been doing. A couple of weeks ago we announced the formation of a joint venture company with them and they have an option to invest $2 million into the JV which will allow us to build a demonstration-scale separation facility to put the RapidSX™ approach throughs its paces at a much larger scale.” States Gareth Hatch, Chairman and CEO of Innovation Metals Corp., in an interview with InvestorIntel’s Jack Lifton.

Gareth went on to provide an update on the Rare Earth Industry Association (REIA) in which he is the Advisory Board Chair. REIA is a global association for rare-earth industry stakeholders which provides a platform to mitigate business risks in the rare earth value chain. In the interview, Jack and Gareth also discussed the new ISO standards for rare earths. Gareth said that the standard includes terms and definitions, traceability, packaging, testing, analysis, etc to bring consistency and uniformity and to create a framework so that companies can get certified.

To access the complete interview, click here




The “Godfather of Rare Earths” Jack Lifton to host a new InvestorIntel critical materials’ market series

Expert Jack Lifton to explore how the American recent policy shift has inspired a rare earths revival and a rebirth of a domestic rare earth permanent magnet supply chain

Toronto, November 4, 2019 — InvestorIntel, a leading online source of trusted investor information, is pleased to announce Jack Lifton as the new host for leading coverage of all related rare earths, critical materials and technology metal interviews in this geopolitically charged sector.

Adding significant depth of knowledge and expertise to the bench strength of the existing InvestorIntel Corp. team, CEO Tracy Weslosky comments: “Rare earths are attracting half of our viewer interest on InvestorIntel.com, providing strong indicators that the sector is attracting investor and capital market industry. Jack was there first calling the rare earths market in 2008, just before the market exploded in 2009-2010, so of course I speed-dialed the ‘Godfather of rare earths’ to ask him how fast he could bring us all up to speed on what is ‘real’ in the market coverage. Instead of just interviewing him, we felt we would all thrive if we had him interview the industry. We were exceptionally delighted when the expert who coined the term ‘technology metals’ agreed to lead the charge for market updates. Jack’s interviews will unquestionably be the most informative interviews in the industry, published on InvestorIntel.com, YouTube, and redistributed through iTunes, Spotify and Amazon Google podcast channels.”

Recently publishing How the American recent policy shift has inspired a rare earths revival Jack writes that the American Federal Government’s recent policy shift to require national self-sufficiency in critical metals for technology for the Defense Department, the interest is now on whether total domestic supply chains can be constructed or revived, he adds that: “the Chinese costs are rapidly rising to first world levels, and that this fact as much as any other is driving the rebirth of a domestic total North American rare earth permanent magnet supply chain.”

Jack Lifton is the CEO for Jack Lifton, LLC, a consultancy he began in 1999 upon his retirement as the CEO of an OEM automotive supply company specializing in process chemistry and metals trading. A consultant, author, and lecturer on the market fundamentals of technology metals. Technology metals is a term that he coined to describe strategic metals whose electronic properties make our technological society possible. These include the rare earths, the platinum group metals, lithium, graphite and most of the rare metals and materials.

A member of the Minor Metals Trade Association, Jack is an advisor to the Malaysian Academy of Science in Kuala Lumpur, and he is a member of that Academy’s Rare Earth Task Force. He is also a member of numerous professional societies and is a frequent speaker at both professional and industry events on both the markets for technology metals and materials and on the use of new and newly applied technologies to the extraction, refining and fabrication of rare metals and materials.

About InvestorIntel Corp.

InvestorIntel.com is a leading online source of investor information that provides public market coverage for both investors and industry alike. Offering coverage of emerging markets and investment opportunities to discerning investors, InvestorIntel is considered an online influencer in market coverage, analysis, videos and podcast reports and is based in Toronto, Canada.




Hochschild chases rare earths in Chile – Is it worth the risk?

On October 2, 2019, Hochschild Mining PLC (LSE: HOC) announced it had bought the BioLantanidos Ionic Rare Earth Clay Project in Chile for an additional $56.3 million to achieve 100% ownership (previously $2.5 million for a 6.2% project share). The question and challenge for Hochschild Mining is have they bitten off more than they can chew?

Hochschild Mining is a leading British-based silver and gold mining business operating in North, Central and South America. Hochschild is headquartered in Lima Peru with a corporate office in London. The main shareholder is Peruvian businessman Eduardo Hochschild.

The positives of the deal

On the positive side, Hochschild has only spent what for them is a small percentage of their GBP 1 billion market cap, and they have mining experience in South America. The world is crying out for non-China sourced rare earths. Furthermore, the Ionic Rare Earth Clay Project has a high concentration of key magnet rare earths such as neodymium (Nd) and praseodymium (Pr), as well as the important heavy rare earth elements terbium (Tb) and dysprosium (Dy). The mineralization occurs from the surface to about 20-30 meter deep, so it will be easy to mine. The concession has three main districts covering a total of 72,000 hectares.

BioLantanidos has constructed an on-site pilot plant that has demonstrated both technical and commercial viability, also has a Feasibility Study (FS) prepared.

Hochschild stated that “the process is environmentally friendly and as it does not require potentially harmful chemicals, whilst capital and operational expenditure is projected to be low with the result that the project is expected to be one of the lowest cost rare earth producers.” Hochschild plans a staged modular approach which is sensible and spreads out the CapEx, and increases the chance to make it to at least Stage 1 production.

Acquisition highlights according to Hochschild Mining

BioLantanidos ionic rare earth clay pilot plant in Chile

Source

The negatives of the deal

  • Rare earths are extremely difficult to process. Extracting from clay can be difficult and expensive. Current rare earth miners have billion dollar initial CapEx costs when including the rare earth processing. This suggests we may see cost blowouts for this project.
  • Rare earths mining is a dirty and polluting industry, often leading to environmental concerns by the host country as Lynas Corporation has experienced in Malaysia.
  • Hochschild Mining has no experience or expertise in rare earths mining, or more importantly rare earths processing. Biolantanidos has an agreement with Rare Earth Salts (RES), but RES has not yet proved it can do the separation at scale.
  • Chile is currently under siege with millions of protestors wanting equality. Two large lithium miners SQM (SQM) and Albemarle (ALB) have had recent issues with the Chilean Government (CORFO) and have been hit with very high tiered royalty payments. Protestors have recently blocked their Atacama mine site. All of this emphasizes geopolitical risk is high in Chile.

Based on current information Hochschild has invested 2.5 million initially for 6.2% in 2018, and another $56.3 million to own 100%. Next, they plan to invest another $10 million to de-risk the mine with an updated FS, then a further $40-50 million for the first stage with an 18 month construction period. All up that is over $100 million, which a sizeable investment on an unproven process at scale, in a relatively high geo-political risk country, and to achieve Stage 1 production only.

Only time will tell if Hochschild Mining’s rare earths Chile bet will pay off, or would they have been better off partnering with other safer country projects in Australia, USA, or Canada. Some examples are Alkane Resources Ltd. (ASX: ALK | OTCQX: ANLKY), Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF) or Search Minerals Inc. (TSXV: SMY). All are in safe jurisdictions.

The jury is out on this one. I would have chosen a safer location like Australia, USA, or Canada and used a low interest rate Government loan as Lynas did with Japan, or gone with an Australian rare earth project where the Australian Government is considering to support.

What do you think?




On the threshold of a significant disruption to the domestic rare earths supply chain

In 1992, then Chinese Premier Deng Xiaoping pointed at Beijing’s objectives saying: ‘The Middle East has its oil; China has its rare earths.’ This warning bell has been a wake up call in the midst of the current US-China trade war, especially given China now supplies 81% of the world’s rare earths.

The US is now on a rapid search to find a secure source of rare earths outside of China, ideally in the USA.

Central to this rare earths supply problem is Heavy Rare Earth Elements (HREE), indispensable to a host of American industries including defence systems and artificial intelligence.

Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) is a well-funded development-phase mining company focused on establishing rare metal resources with near term production potential of heavy rare earths from their project in Alaska, USA.

Ucore’s three key projects include:

  • Bokan-Dotson Ridge Rare Earth Project in Alaska (Heavy Rare Earths – Dysprosium (Dy), Terbium (Tb) & Yttrium (Y)).
  • Ray Mountains Project in Alaska (REE, Sn, W, Zr ± Nb, Ta heavy minerals).
  • The SuperLig®-One pilot plant (an environmentally friendly, cost efficient separation technology for each individual rare earth element).

Bokan-Dotson Ridge Rare Earth Project

Ucore’s primary focus is the 100% owned Bokan-Dotson Ridge REE property in Alaska. The Project is located 60 km southwest of Ketchikan, Alaska.

Approximately 40% (by weight) of the rare earth elements contained on the Dotson Ridge property are heavy rare earth elements, including the critical elements Dysprosium, Terbium and Yttrium.

The Bokan-Dotson Ridge REE Project has the following benefits:

  • The highest grade heavy rare earth deposit in The U.S. (NI-43-101 compliant).
  • Excellent logistics: Only REE deposit worldwide with immediate deep water access. Accessible labour and prospective power.
  • Anomalous skew towards Dy, Tb, Y which are among the most critical high demand HREE’s.
  • Located in Alaska, one of the world’s leading mine friendly jurisdictions.
  • Advanced metallurgy and separation regimes already established.
  • Excellent local, state and federal support. In 2014 Ucore received unanimous support from the Alaska State Legislature authorizing the Alaska Industrial Development and Export Authority (AIDEA) to issue up to US$145 million in bonds for the infrastructure and construction costs of the Bokan-Dotson Ridge Rare Earth Project.

Ucore’s M3 Plan of Action

Ucore’s M3 Plan to satisfy the needs of an independent American REE supply chain comprises three primary initiatives and commencing immediately:

  • Mine– Advancing the HREE mine at the Bokan-Dotson Ridge Rare Earth Project to “shovel-ready” status.
  • Metal– Developing the associated engineering for the individual REE and co-products processing and separation plant, the Alaska Strategic Metals Complex. Planned to be the first physical component of the mine, the Alaska SMC will be designed to process REE concentrate not just from the Bokan HREE Mine, but from other U.S. and U.S. allied-nation sources, into individual REE oxides for the burgeoning North American REE market.
  • Market– North American market development and cultivation of the customer base for non-Chinese REE products in the Western World.

Jim McKenzie, President & CEO of Ucore, stated: “Current international events suggest that the U.S. is now on the threshold of a significant disruption to the domestic REE supply chain.”

The longer term vision for Ucore is also to become a leading advanced technology company that provides mineral separation products and services to the mining and mineral extraction industry.

The US needs to establish a safe rare earths supply source

Rare earths, and heavy rare earths in particular, are now among the most valued, sought after, and hard to obtain metals at a world level, especially outside of the China supply chain. No other naturally occurring materials are of greater strategic importance to the U.S. in terms of competing today at an international level with China. Industries that span all manner of high-tech applications, from national defense to AI, supercomputing, energy provision, transportation, and many more are heavily reliant on rare earth materials to enable the US industry to maintain leadership and a competitive edge with the rest of the globe.

Ucore’s Latest news

Just in mid October Ucore announced: “The Company has finalized a project-specific advisory team for the purpose of designing its heavy rare earth element solvent extraction plant and processing capabilities in Southeast Alaska (the “SX Plant”), and with respect to its forthcoming anticipated proposal for near term U.S. Government funding……The Defense Production Act (DPA) Title III office this year released a request for information on potential HREE separation in the U.S., which Ucore responded to in July 2019.”

All of this means that Ucore is now firmly on the US Government’s radar and increases their chance to attract further project funding. Ucore is already well advanced and has a strong chance to progress to becoming a US rare earths supply source.