EDITOR: | September 4th, 2013 | 20 Comments

Ian Chalmers discusses the rare earth market turnaround and Alkane’s projected $40M gold revenue in 2014

| September 04, 2013 | 20 Comments
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Weslosky-ChalmersSeptember 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?”

“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.


Tracy Weslosky

Editor:

Tracy Weslosky is the Founder and CEO of InvestorIntel Corp., a company that publishes InvestorIntel.com. A leading e-news source for investors, entrepreneurs and industry leaders ... <Read more about Tracy Weslosky>


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Comments

  • Aat Oskam

    Thanks Tracy for this fine interview, in which you gave Ian an opportunity to set things straight for Alkane!

    September 4, 2013 - 3:13 PM

    • Tracy Weslosky

      Good to hear from you Aat – the great news…is that we have a 2nd interview that we will be publishing in the next day or two….where Ian gives us some feedback on the overall market sector…stay tuned.

      September 4, 2013 - 3:37 PM

  • black jack

    thanks tracy
    i have invested in alkane and unfortunately lost as the sp tanks
    alkane will be a great company but only in a few years time

    using lynas as a parallel there will be delays and missed targets
    so i wouldnt expect much from them for a few years yet

    September 5, 2013 - 3:26 AM

  • Jessica

    Tracy Weslosky, what happened to v.MAT and v.HRE? Both stocks are down. Please advise.

    September 5, 2013 - 11:53 AM

  • Tim Ainsworth

    Tracy, appreciate the interview with Ian, it’s certainly an interesting complex project. However I don’t believe we learnt anything further re the final separation of the HREE component representing 20% (or more depending on zirconium prices) of the project value.
    From the Sept 12 QR: “Key outcomes are the potential for
    increased revenue from improved REE recovery, particularly for the important HREE”
    From the June 12 QR: “In parallel with recovery improvement work at the DPP, AZL’s MoU partner Shin-Etsu Chemical is currently focused on improving recoveries of individual rare earth elements from the heavy rare earth concentrate supplied from the DPP. The MoU has been extended to 31 December 2013.”
    As I understand it the ANSTO lab never developed a satisfactory separation of the HREE and this issue was passed off to Shin-Etsu to resolve. While ALK have successfully developed the concentrate its value will be determined by the final recoveries. To my knowledge there has been nothing forthcoming from Shin-Etsu, other than the extension thru to year end as above.
    Until there is some news re successful final separation by Shin-Etsu the value of the HREE concentrate remains questionable IMO.

    September 5, 2013 - 2:58 PM

    • Ty Dinwoodie

      The Managing Director of Alkane stated here – on the record – that the company has successfully (and consistently) achieved and produces a 95% HREE concentrate. 99% for the light rare earth oxide concentrate and 95% for the heavies, right? Chalmers seemed quite convincing to me… what was incomplete?

      September 5, 2013 - 6:26 PM

      • Tim Ainsworth

        Ty, you need to make up your mind whether this is a lecture forum or an information forum.
        If the former you may as well just shut the response section down and continue on your merry way, but it will be a good deal more lonely.

        September 11, 2013 - 10:36 AM

    • anonymous coward

      I can not work out who is the biggest tool. You or Bill. How wrong can you both be. And not even an apology after the record was set straight by the MD.

      September 11, 2013 - 5:48 AM

  • tek

    Perhaps there is some misunderstanding (maybe mine) here.
    LREE and HREE concentrates are just that, concentrates.
    Taking those concentrates and separating/refining them into various oxides and other purified forms of rare earths is another matter altogether. .
    I could be incorrect about this.

    September 5, 2013 - 10:28 PM

  • Ian Chalmers

    I don’t normally reply to comments in public forums but it seems that perhaps we are not conveying information very clearly. The two rare earth concentrates produced from the demonstration pilot plant are RE chlorides, and both are of similar composition to those produced in China and can be successfully processed through Shin-Etsu’s existing separation plant(s). The plant has been operating for many years.

    As we stated in the feasibility study results released in April this year Shin-Etsu are working with us to improve the overall recovery of the rare earths to the concentrates, not recovery from the concentrates. Neither Alkane nor Shin-Etsu believe there will be any difficulties producing the full suite of high purity separated rare earths from those concentrates.

    Alkane chose to go down the toll treatment – offtake arrangement with Shin-Etsu to minimise the timing to production, and the technical and financial risk of building our own RE separation plant, not that we had concerns that ANSTO would not be able to develop a RE separation flow sheet for the DZP.

    Ian Chalmers, Alkane Resources Ltd.

    September 6, 2013 - 3:26 AM

    • Tracy Weslosky

      It is a great honor to have you comment here Ian — thank you. I remember when Constantine Karayannopoulos used to join our debates and I think I will send him your comment. The bottom-line is that information cannot evolve or be clarified unless the experts leading the industry like yourself assist the public in moderating the debates. I am looking forward to the publishing of your second interview early next week when you share with us your insights on the overall industry. Thanks again!

      September 6, 2013 - 1:11 PM

    • tek

      Ian,

      Thanks for the clarification. Alkane’s choice to go down the tolling road will probably set the model for most miner/producers when other refineries are established around the world.

      September 7, 2013 - 10:55 AM

    • Tim Ainsworth

      Cheers Ian,
      Look forward to the updates & best of luck.

      September 11, 2013 - 10:52 AM

  • aurelius

    Hi Tracy:

    Sorry to catch you here. You have referred to an upcoming interview with Mar Levier several weeks ago, which was scheduled during the second end of August. Can you give me an update on that? Thanks.

    September 6, 2013 - 11:11 AM

    • Tracy Weslosky

      Aurelius – Marc is supposed to be scheduled in over the next couple of weeks…Sue?

      September 6, 2013 - 1:08 PM

  • Sue Glover

    Thanks for asking about an update from Marc. We are working on firming up a date now as Marc was on the road …. will definitely happen in the next 2 weeks 🙂 I will keep you posted Aurelius!

    September 6, 2013 - 2:02 PM

  • Sue Glover

    Aurelius I have an update! Marc is on the road again until the end of September. We will be reaching out to confirm an interview when he returns. The timing will be great as quarterly numbers will be coming out at the same time! Thanks for the request and more importantly thanks for contributing!

    September 6, 2013 - 2:33 PM

    • Jake

      is he avoiding you? Or does he just have nothing to say at the moment?

      September 6, 2013 - 3:22 PM

  • Sue Glover

    No Jake he is not avoiding me or without anything to say about his projects I am sure ….. he is simply on the road and out of the country so we will do the interview upon his return! Glad everyone is anticipating the interview!

    September 11, 2013 - 9:37 AM

  • Rare Earths & Critical Minerals Month-in-Review: A sector back on its feet; major announcements affect stocks (very) positively; Texas Rare Earth (+68.52%), Quest Rare Minerals (+52.73%), Critical Elements Corporation (+52.67%)… |

    […] | OTCQX: ANLKY) gained +16.51% and +14.29% in the US and Canada respectively. A few weeks ago, I interviewed the great Ian Chalmers, Managing Director of Alkane for an update on the company’s Dubbo Zirconia Project, the Tomingley Gold Project (going online […]

    October 3, 2013 - 10:16 AM

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