Ian Chalmers discusses the rare earth market turnaround and Alkane’s projected $40M gold revenue in 2014
September 4, 2013 – Tracy Weslosky, Publisher of InvestorIntel, interviews Ian Chalmers, Managing Director of Alkane Resources Ltd. (ASX: ALK | OTCQX: ANLKY) and discusses Alkane’s +40% July increase in its share price as well the company’s agreement with Treibacher for production of ferro-niobium, future benchmarks and sets the record straight with regards to REE processing. You don’t want to miss this…
Discussing the catalyst that helped launch the movement in Alkane’s stock price, Chalmers starts: “The market itself is starting to change and starting to evolve. It’s gone over the trough of the depression that we’ve all been through and we’re starting to come out of that. We’ve added a couple of new senior staff appointments to the company, namely Chief Operations Officer, Nicholas Earner. Mr. Earner has had a lot of experience running the kind of plant that we’re going to be building for the Dubbo Zirconia Project, so that was important. Also very important was the announcement of the joint-venture structure we put in place with Treibacher (Austria’s Treibacher Industrie AG).
Tracy asks, “with regards to the latest announcements with management, does this mean Alkane is a step closer to production, Ian?”
“We are stepping closer, Tracy. It’s a slow process, as you well know, with these types of projects,” Chalmers explains. “We are getting to the point where, over the next 8 to 9 months, we’ll put on more people as we get closer to making that decision. The decision to go will be early next year. And then we start that very critical phase of getting all the approvals finished and starting the construction phase of the project.”
“For those who are not familiar with your Treibacher deal, which was announced in mid July, can you provide InvestorIntel viewers with an overview and a better understanding of this deal?”
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“Treibacher is a private European company based in Austria,” explains Chalmers. “It’s a very substantial international company (Treibacher specializes in the production of advanced materials through its chemical and metallurgical expertise and distributes metals, alloys, ferro-alloys, oxides and non-oxide performance materials to consumers globally), with turnover of about €500 million a year. They’ve been involved in the ferro vanadium business for quite some time and they really have an interest in getting involved in ferro-niobium. What Treibacher did was come to us and say, ‘look we’re very interested in your niobium output, and we’d like to help you with the technology of producing high-quality ferro-niobium.’ So they’ll come in and help us do that. In return, Treibacher will have the option to take as much ferro-niobium as they wish. Treibacher will be both a user and a marketer of that material.”
Editor: Click on the following link for the July 17, 2013 Alkane news release: “Alkane signs agreement with Austria’s Treibacher Industrie AG for DZP production of ferro-niobium.”
“For those of our audience members who are not familiar with Ian Chalmers and Alkane Resources, you have one of the most exciting multi-commodity plays. You are a leading pick for Jack Lifton, you are a pick for Dudley Kingsnorth and for every other leader in the industry. Alkane has light rare earth (LREEs), heavy rare earths (HREEs), yttrium, niobium and zirconium. Can you please give an overview of what Alkane Resources is today?”
“There are two aspects to what we are,” according to Chalmers. “First of all, Alkane is a multi-commodity company, so yes, we have big involvement in the rare metals and rare earths industry, through the Dubbo Project, but we’re also a gold company. We’re about to go back into production with gold and we’ll be producing gold early in the new year. That’s two aspects. But the Dubbo Zirconia Project is still the key project in the company. Gold is fine, gold will generate about AUD$40 million a year cash flow for us, but the Dubbo Project is a substantial asset and a substantial project. It’s a project that’s quite different compared to most others, in the sense that it will produce zirconium, niobium, a light rare-earth concentrate, a heavy rare-earth concentrate and it’s very advanced. That probably differentiates Alkane Resources somewhat.”
When discussing benchmarks for the remainder of 2013, Chalmers commented: “We’re looking forward to a number of benchmarks, namely getting our Environmental Impact Statement (EIS) for Dubbo which will be a very big step for us. We’ll have other benchmarks with our gold project; the construction is well-advanced and nearing completion. But with Dubbo, particularly next year, will be about getting the EIS approved – somewhere around May or June 2014, and putting all the funding in place around the same time. Then we’ll be pushing the button, ready to go, sometime in the second half of the year. A lot of big things happening.”
Tracy addresses the discussion (incorrect commentary) on InvestorIntel regarding Alkane’s proposed processing facility and processing capability. “As a leader in this industry, Ian, I’d like you to set the record straight.”
“Thank you, Tracy, and thank you for the opportunity. I do follow what Jack Lifton and Dudley Kingsnorth have said and I’ve read the commentary and there were some comments like: ‘Alkane has done its process testing on a laboratory scale, but hasn’t proved it’ or that we’ve struggled with the demonstration plant or the pilot plant… and I really do need to set the record straight. That pilot plant has been running now for five years. We have no issues in producing a high-quality zirconium product or a high-quality niobium product. We produce a 99% light rare-earth oxide concentrate and we produce a 95% heavy rare-earth concentrate. The two rare earths have a deal in place with Shin-Etsu that will take those two concentrates and do all the separations on them. If we had a problem with processing, I must admit I’m lost to say where that problem is because we’ve been doing it now (successfully) for a number of years.”
Editor: Shin-Etsu Chemical Co. Ltd. is the largest chemical company in Japan and is ranked No. 9 in Forbes Global 2000 for the chemical sector. Shin-Etsu will see 100% of the Dubbo Zirconia Project’s rare earth outputs being shipped to Japan for processing into high-purity individual rare earth oxides before being sold to the global market.
An accomplished entrepreneur and corporate finance professional, Tracy Weslosky is the CEO for InvestorIntel Corp. and the VP of Business Development for Bellotti Capital Partners ... <Read more about Tracy Weslosky>