EDITOR: | January 26th, 2015 | 45 Comments

The European Holy Grail for Rare Earths: Tasman Metals

| January 26, 2015 | 45 Comments
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Lifton-PresentsTasman Metals Ltd. (TSXV: TSM | NYSE MKT: TAS) is a Canadian company for jurisdictional and thereby regulatory purposes that just announced their Pre-Feasibility Study for the Norra Karr heavy rare earth element project in Sweden. Its rare earths’ deposit under development is in Sweden and the CAPEX now and OPEX in the future will therefore be payable in Swedish Crowns. The downstream operations of Tasman will be done by European Union companies that must be paid in the common currency of those companies, Euros, and the target European Union customers of Tasman will pay their invoices from Tasman in Euros. The Swedish crown is the currency of a stable prosperous but very small nation; the Euro is the common currency of an assemblage of the world’s 2d or 3rd largest economy (in aggregate) but this  region is in stagnation so its currency is weakening rapidly against the US dollar, which is in recovery. Tasman is traded in NYC, so that Americans can directly buy shares in this company and those shares are a way for small investors to “play” the currency market now and for the foreseeable future.

In the Great Gatsby, F. Scott Fitzgerald famously has a character ask “Why are the rich different from the [rest of] us?” Fitzgerald puts contemporary America’s answer to that question in the response, “Because they have more money.”

“Why is Tasman different from all other rare earth juniors?” frustrated investors ask. “Because it is a European deposit,” is my American answer.

Tasman’s target market is Europe; its hydrometallurgy has been developed by a Norwegian group; its plan for a separation regime is to use an existing French European toll provider and then move if it becomes economical and possible to an in-house process to-be-devised-and-proven-at-scale in an undisclosed to this author European located, owned, and operated laboratory; and in the first instance to sell the clean mixed concentrate provided to it by the French toll contractor to any of several European rare earth metals/alloys makers that will supply any of several  European rare earth permanent magnet alloys makers, the customers of which are European end-use component providers to Europe’s, the world’s oldest, electrical, automotive, lighting, and industrial machinery manufacturers situated variously  in Germany, France, Belgium, Austria, Holland, the UK, Poland, and Romania. Mark my words: European high tech manufacturers must have a profitable Tasman in operation in order to be competitive in products depending on dysprosium, ytterbium, or yttrium. That short list is an extremely deep one. China’s Yuan is strengthening also against the Euro, and this only makes China less competitive in Europe with products made in China.

Pay attention to the Swiss Central Bank; it is protecting its national economy (its only reason for existence is this protection) by purposefully “correcting” the value of the Swiss Franc to the Euro. The spill-over from this action is what you need to understand. A sharp increase in the value of Tasman Metals is just one of those consequences, but it is the consequence of which I am writing today.

Europe has one or more longstanding companies able to provide each of the downstream services in a total rare earth supply chain. Europe even had the world’s first rare earths mine(s) in Sweden in the nineteenth century. Tasman’s deposit would be both the anchor of a European total rare earths supply chain but it would also complete such a chain.

Europe’s main competitor is China just as is America’s. The difference is that European businessmen did not succumb to globalization as whole-heartedly as did American businessmen. Also, and this is key, both European manufacturing and also its  rare earth supply chain companies consider American and Japanese companies to be competitors not allies! The Europeans therefore do not share their hopes, aspirations, or detailed future product and marketing plans with American or Japanese companies. The famed “alliances” of rare earth end-using manufacturing companies in Germany are in reality fact-finding organizations that do more industrial espionage upon each other than intelligence gathering for mutual benefit.

Yet pundits blithely talk about “global supply” and “global demand” as if they are inextricable intertwined, and, as if the numbers gathered by the various data miners were anything other than educated guesses based on very biased sampling.

To repeat for emphasis: Tasman Metals is a company with a deposit in Sweden, incorporated in Canada, the founder and CEO of which is a resident of Melbourne who was born in and remains a citizen of Australia. It can be traded not only on the TSX in Toronto but also on the AMEX in New York City. Citizens of either Canada or the USA can buy shares in Tasman in their own currencies. It is nonetheless as European as a baguette or a Wienerschneitzel, and will be just as nourishing to a European manufacturer’s appetite for a secure supply of crucial raw materials.

Below I have a description of Tasman’s advantages and business model that I hope will be seen as a prescription for the right way to approach the development of a producing rare earth mine. By no means are all separate deposits even in the same mine identical but there is a universal best practices approach to developing such deposits into profitable producing mines. Tasman is a poster for such an approach.

Tasman’s recently published Pre-feasibility study is a:

  • A good study, which incorporates all costs from opening to the closure of the mine.
  • It is a realistic plan to produce REE’s, because it uses…
  • Conservative pricing rather than recent peer studies, and it is
  • One of the major HREE projects
  • One of the highest % of heavy REE’s of any viable project in development, and it has a
  • Long mine life – 20 years used in this study but its unconstrained mine life is 60 years

Tasman will be a:
Major producer of dysprosium oxide – more than 200 tonnes per year for at least 20 years. The leading smaller projects focused on the heavy rare earths have mine lives only half that long.

Tasman will therefore be:
Unique in the European Union (Greenland is not in the EU, but it is in Europe) so it is very well positioned for EU support and for European off-take agreements, and as noted above:

Europe has separation facilities and REE magnet making facilities.  This means the idea of a secure and integrated supply chain is achievable.

Tasman’s metallurgy is:
Based on a now well tested process developed for Tasman to recover REE’s from eudialyte.  This alone gives Tasman potential to make a major contribution to the supply security of heavy REE’s around the world!

In addition:

  • Sweden is a mining friendly country with trusted environmental legislation – great sustainability protection for customers of REE’s.
  • The mine is part of a region designated only for mining development as strategic for Sweden’s future!
  • The leaching of the ore is at room temperature, no roasting or high pressure needed – benign processing
  • The CAPEX is low due to the great infrastructure around the site,
  • The project can use local labor and sulphuric acid. This minimizes both the cost and environmental impact, and it puts maximum benefit in the local region,
  • Swedes are highly skilled – customers already believe that Swedish people can run a complex REE plant, and produce high quality REE products,
  • The mine has a low stripping ratio, so little waste rock needs to be moved and stored – This adds to both financial and environmental efficiency,
  • The mine presents the investor with a high exposure to the most critical REE’s, which have the best exposure to a potential rebound in pricing,
  • Tasman has no requirement in its flow sheet or its economic model for proprietary or commercially untested technologies.
  • As pointed out already, in house separation can be added later to increase margins.
  • The project start up can happen in the lowest risk way – lowest CAPEX and trusted by customers
  • Tasman down the road has lots of opportunities for optimization and addition of revenue.
  • Zr, Hf and Nb are stockpiled in this PFS model, but will be the focus of future research
  • Nora Karr is the least radioactive of all REE projects being explored. It therefore has lowest impact in this regard
  • Nora Karr is in an attractive location with extensive transport/power/water infrastructure in place and is very close to major European REE consumer. Germany, for example, is accessible both by road and rail directly through Denmark, which itself is now physically connected to Sweden by bridge.
  • Finally the Nora Karr project has only 2.6% of its projected revenue from cerium (Ce) and lanthanum (La) which are forecast to remain in long term oversupply.  All the capital to be used goes to the production of commercially valuable metals, and none goes to competing with the materials that are produced as a by-product in China

To understand Tasman’s PFS it is absolutely necessary to place it in the correct contexts. Those contexts are the European market (and European geopolitics) and the future economy of China.

Tasman is Europe’s only way to remain competitive in rare earth enabled high-tech, and for the rest of us it is a very good bet.

Disclaimer: Jack Lifton is a well known rare earth expert, speaker and consultant and Tasman Metals is one of his clients. All of Mr. Lifton’s current Board and Advisory roles, along with his clients are disclosed in his biography on InvestorIntel.


Jack Lifton

Editor:

Jack Lifton is the Sr. Editor for InvestorIntel Corp. and is the CEO for Jack Lifton, LLC. He is also a consultant, author, and lecturer ... <Read more about Jack Lifton>


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Comments

  • Springtrader

    Hi Jack; I always enjoy your analyses, but I sometimes think you could go that one step farther to inform your readers. You say “Europe has one or more longstanding companies able to provide each of the downstream services in a total rare earth supply chain.” Who are they? If you give us some names it will help our due diligence. I think there are four main downstream processes before magnets can be made which are oxide production, individual rare earth separation, metal refinement, and alloy-making. Would you mind listing a few of the companies Europe has for each. Thanks, much appreciated.

    January 26, 2015 - 10:54 AM

  • Fixed

    Yes I would also like to know who the “several European rare earth metals/alloys makers”are. Who are they Jack?

    January 26, 2015 - 11:28 AM

  • Springtrader

    Jack; You say, “The CAPEX is low due to the great infrastructure around the site.” I see the CAPEX is estimated to be about $378 million. It sounds like a lot to a country boy like me. Would you mind providing some other companys’ estimated CAPEXs so we can get an idea how advantageous this low CAPEX is for TAS? Maybe Ucore, Texas Rare Earths, US Rare Earths, and Great Western. Thanks again.

    January 26, 2015 - 11:31 AM

  • SteauaOilers

    VeritasBob, I will continue your line of arguments.

    Great Western Minerals shows great economic analysis results in their FS, citing a price of $415 for Dy oxide. Tasman uses an inflated price of 40% more ($575), and yet its PFS results are nowhere as impressive. What would the PFS look like with $415 as the price of Dy oxide, given Tasman’s tout that their deposit is skewed towards Dy?

    January 26, 2015 - 12:09 PM

  • SteauaOilers

    Actually, it’s not hard at all to see the impact that a price of $415 for Dy oxide will have on the PFS.

    As stated in the NR, Dy oxide sales will account for 42.3% of the revenues of Tasman. By reducing their assumed price of $575 to $415 (which is 30% reduction), the revenues will take a 13% hit.

    January 26, 2015 - 12:46 PM

  • Fixed

    Tasman is Europe’s only way to remain competitive in rare earth enabled high-tech, and for the rest of us it is a very good bet. – No it is not and I will back that up wiith I may tell you if Jack will answer the questions posted thus far and we can pick this up after those earlier posts have been replied to.

    January 26, 2015 - 1:30 PM

  • Robert Mackay

    I suspect that at current REE prices the Tasman deposit is uneconomic. The bigger flaw in Jack’s analysis is they plan to sell concentrate and I would like to know the price they will receive for that concentrate from the only company in Europe that has the capability to separate heavy rare earths. Internal Chinese pricing or export pricing? I think the answer is internal Chinese pricing for concentrate. This makes what they think is ore, waste.
    The second question I have for Jack, Christopher and Tasman’s management is who has ever separated a eudialyte concentrate economically? How do you deal with the double sulphate salt?

    January 26, 2015 - 2:09 PM

  • Stirling

    To the best of my knowledge, though happy to be proven wrong, the NI43-101 requirements for a PFS include a well tested and validated flow sheet. Tasman has in the past published their metallurgical results that include step-by-step recovery and the grade of a precipitated oxalate concentrate. Matamec has also published a well tested flowsheet for eudialyte at FS stage, though with less heavy REE.

    January 26, 2015 - 2:53 PM

  • VCinvest

    RE the cap-ex comparisons: “Maybe Ucore, Texas Rare Earths, US Rare Earths, and Great Western”. Ucore and Texas are at PEA stage, and there doesn’t seem to be any relevance in comparing PEA to PFS any more. US Rare Earths does not have a resource, or a PEA. Great Western under their FS plans to produce less than one third of the the Tasman output and only one eighth the Dy oxide. Tasman peers are Matamec-Avalon-Quest-Northern Minerals where comparison can be valuable.

    January 26, 2015 - 3:05 PM

  • From Sweden

    If Tasman gets here, they will destroy lake vättern, one of the most beautiful lakes in the world and the fresh water supply for a lot of people. It is just not worth it… All you experts, all of you that only calculates money above everything else in the world. Get out in the real and see real things, there are more values than the stock exchange.

    Try to google Vättern for example.

    January 26, 2015 - 3:19 PM

  • Springtrader

    Jack must’ve been called away, so I’ll take this opportunity to suggest a better way for Europe to assure themselves freedom from Chinese interference in all matters rare earth.

    England is home to the one downstream rare earth alloy maker that I am aware of in Europe: Less Common Metals (LCM). At least one of its main customers is European and I’m confident that agreements could be made to the purpose of dedicating the lion’s share of future LCM production to other European customers for an investment of only $250 million, which is only 2/3rds of the $391 million that Tasman requires for its CAPEX investment at Norra Karr.

    This is where it gets interesting. LCM has a mine already nearly completely refurbished in South Africa that reports critical rare earth grades much higher than any other project in the world…and that includes China. Tasman has 0.51% total rees in its deposit at Norra Karr but, get this, LCM’s mine has 16% total rees! Quite a difference. To make my suggestion even more compelling, let me state that LCM’s deposit has higher grades than Tasman’s in all the critical rees that modern manufacturing finds so necessary: Neodymium: LCM 2.51% Tasman 0.017% – Dysprosium: LCM 0.14% Tasman 0.025% – Terbium: LCM 0.03% Tasman 0.004% – Yttrium: LCM 0.018% Tasman 0.016% – and finally Europium: LCM 0.009% Tasman 0.002%.

    Are you beginning to see my point? For a cost of $141 millon less, Europe can get higher payback in all the critical rare earths…and do it much sooner than they could by backing Tasman. You see, LCM’s mine is ready for development. All the studies are completed, all the plans are written, and all the permits are approved. Tasman is only at the PFS stage, which indicates several more years of studies and permitting and planning before they could even consider putting a spade into the ground.

    My suggestion to Europe is to invest in LCM’s mine, use the proceeds to enable LCM to increase production and thereby solve Europe’s immediate rare earth scarcity problems, and stockpile all the rare earth output it can generate beyond that. If Mr. Lifton is aware of other downstream rare earth European companies, I’m sure they could share in the bounty of LCM’s mine also.

    The beauty of this whole scenario is that Europe can use another continents rare earth resources now, while relations are good around the world, but if tensions should flare-up someday in the future they will still have their Tasman mine to fall back on. Additionally, they won’t have the environmental worries that rare earth mines usually bring to their regions.

    It’s just a suggestion. What do you think Jack?

    January 26, 2015 - 3:34 PM

  • Fixed

    Once again Sprintrader awesome commitary that has yet to be refuted by the “experts”… Would think Jack would have a case if he can wonder how his interview is gong with Jim the old CEO of “GREAT” Western Minerals Group” maybe Jim will give some insight to the Hoidas Lake deal with “STAR” .

    January 26, 2015 - 4:33 PM

  • Jack Lifton

    Springtrader,

    Some thoughts:

    Please look at the relative dysprosium grades of the two ore bodies:

    SKK is .998
    Nora Karr is 4.25%

    The last time I looked at the target production levels of both companies GWMG would produce 34 tons of dysprosium per year for 7 years, and Tasman would produce some 200 tons per year for 20 years to 60 years. SKK’s high grade is exceptional, but basket price is very misleading without reference to a total production baseline.

    To match Tasman’s output of dysprosium GWMG’s SKK would have a mine life of less than 2 years. The comparison therefore makes no sense.

    And by the way it is GWMG that owns LCM not the other way around. To describe LCM as if it “owned and would operate the SKK deposit” is disingenuous at best. LCM ‘s stated installed capacity to make alloys is 2000 mt/year; its stated output last year was around 300-400 tons. If you know of LCM’s capacity to make neodymium metal,neodymium/praseodymium mixed metal (AKA didymium metal), and/or ferrodysprosium please tell me what those capacities are. Let me point out that the global market for rare earth permanent magnet alloys is 80-100,000 tons per year, and that LCM is the smallest credible player of which I know outside of China.

    As for pricing: whoever said that the competitive price is Chinese domestic is wrong. The competitive price in Europe is Chinese export. In fact at an EU meeting last Fall Siemens stated that they would pay a domestic European supplier the Chinese export price without question. Any subsidies added to that for security of supply would be an EU Federal issue, and, in fact, has been proposed.

    I will have information on European capabilities and capacities along the REE supply and value chains in a day or two. I am polling them now. In the mean time I would like to ask you, Springtrader, of you can name for me any Slovenian rare earth permanent magnet makers.The REPM industry is well established there as I’m sure you know.

    Jack

    January 26, 2015 - 4:41 PM

  • Investor

    Great project, low Capex and Opex “fantastic” mineralogy and basket mix. Tasman and Northern Minerals are the best emerging rare earth projects out there. However the major milestone for Tasman will be in getting environmental and mining approvals. Swede’s do care about their environment. Do as person above suggests and Google the words “Lake Vattern”. On the other hand Northern Minerals does not have these problems. look at the Lynas and the issues they had because of the soft/social issues! We need to start addressing those questions if we are going to get serious about any project, because this is the reality!

    January 26, 2015 - 7:07 PM

  • Lid

    Jack,
    The goal of a business is making money, if it can not make money, then makes no sense. Many investors keep sharp eyes on the price deck that a BFS is built upon. Rising the price deck can make a marginal project looks great, I believe you, as a expert in this field, noticed it, would you please spare a minutes to explain what Tasman did in the BFS? Thanks ahead. Regarding the relative grade of Nara Karr and SKK, it is meaningless without talking about price deck, if the price deck is lower than the cost to produce Dy or any product, producing more means losing more money. Correct me if I am wrong, Thanks.

    January 26, 2015 - 9:28 PM

  • Lid

    Jack and Bob,
    From what I understand, if price of $64.46/kg brings NPV to $312.6M, and 10% discount (-$6.446/kg) brings NPV to $61.6M, then 35.7% discount should bring NPV to negative $584.55M. please Correct me if I am wrong. Thanks.

    January 26, 2015 - 9:53 PM

  • wwwater

    Mr. lifton, With due respect, your use of the percentage distribution within the respective deposits is correct however when you apply the overall grade of the deposit to the distribution percentage you end up with an insitu grade of 0.204% of Dy within the Norra Karr deposit and a insitu grade of 0.579% within the Steenkampskraal deposit or 2.04 kilograms of insitu Dy for every tonne mined at Norra Karr and 5.79 kilograms of insitu Dy at Steenkampskraal that is mined. Using the current FOB China pricing for Dy of $340 per kg. will have a very substantial effect on NPV of Tasman versus the effect on GWMG as more than 50% of the revenue that will be generated for Tasman is because of Dy. Thus the pricing for Dy oxide placed by Norra Karr at $520.00 per kg in the PEA will have a minimum of a 34.6% reduction in the overall NPV of Norra Karr.

    January 26, 2015 - 11:18 PM

  • wwwater

    Mr. Lifton, one other point I neglected to point out that the demand for the CRITICAL Technological Rare Earths seem to be centered on Dy, however the magnet industry’s requirements of Nd/Pr and other CREEs will be seeking those projects that can supply them. Tasman’s saleable total revenue hinges on Dy providing 38.99% of the total while Nd/Pr will contribute only 26.85% whereas SKK will provide 70.82% to GWMG’s saleable total while Dy will contribute only 14.66%.

    January 26, 2015 - 11:39 PM

  • Chris

    Quote Mr Lifton
    “As for pricing: whoever said that the competitive price is Chinese domestic is wrong. The competitive price in Europe is Chinese export. In fact at an EU meeting last Fall Siemens stated that they would pay a domestic European supplier the Chinese export price without question.”

    Not only A domestic European supplier.

    Lynas Q4 2014 report.
    ” Most significantly, we concluded our first deal where an end use manufacturer specified the use of Lynas materials to its magnet supplier.”

    https://www.lynascorp.com/Quarterly%20Reports/2015/Quarterly%20Activities%20Report%201404329.pdf

    No points for guessing who the end use manufacturer is.

    January 26, 2015 - 11:48 PM

  • Jack Lifton

    Gentlemen,

    A colleague emailed me today that Metal-Pages is showing Dy today at $475/kg. That price is not the point. There is no good price discovery mechanism for dysprosium other than actually making an offer to buy the material, and those that do that for use outside of China are few and far between and their contracts are not at all public. The point is that Tasman is betting that by the time it comes into production the Dy price will be higher than it is today. I think that is a very good bet, since China’s costs of extracting HREEs from its ionic clays have now been forced to add environmental costs both going forward and for remediation. Dysprosium production must be increased or the growth of the use of Nd-Fe-B magnets must stop. There has been as much reduction of Dy content in magnets as is possible and Chinese production cannot keep up. The Chinese rare earth permanent magnet supply chain is substantially augmented already by recycling.
    To put it another way: Chinese new dysprosium production growth is tapped out; all new dysprosium production will have to come from outside of China; ionic adsorption clays exist outside of China but extracting HREEs from them poses the same problems of environmental degradation and remediation everywhere. The key to additional production of much needed dysprosium and other crucial metals such as terbium and yttrium is the mining of hard rock deposits. One of the best ones in development today is that of Tasman.

    Jack

    January 27, 2015 - 12:32 AM

  • Springtrader

    Thanks for the reasoned response Jack. Don’t you think it is a bit disingenuous to use relative grade as an argument to rank one mine’s content above another without including the total rare earth grade of each mine in the equation? For instance, if I said I have a rare earth deposit and 100% of its relative grade is dysprosium, that sounds great, doesn’t it? It would be great if the total rare earth grade were, say 1%. That would mean that of every one hundred pounds of ore mined 1% of it would be dysprosium, which would equate to one pound. Pretty good, huh? Suppose though, instead the total rare earth grade of that mine was 0.0000001%. This would mean that of every one hundred pounds of ore mined one billionth of it would be dysprosium, which would equate to about one billionth of a pound. This doesn’t sound so great, even though both examples have a relative grade of 100% dysprosium.

    The example I just shared makes me argue that, just as you contend ‘basket values’ of rare earth deposits are meaningless statistics, ‘relative grades’ are just as meaningless and useless. I would also argue that both of these statistics were most likely devised by inventive, but deceptive, statisticians trying to make their rare earth deposit appear to be better in relation to others.

    I use the information provided by ‘Technology Metals Research’ for my numbers. I trust you find them accurate and acceptable?

    The only statistic that really gives a true reading of the amount of a specific rare earth in a deposit is how much of a percentage of that rare earth is contained in the ore. This is the ‘grade’ of which I speak. LCM’s mine (they don’t own it but it is their mine) has a dysprosium grade of 0.14%, which happens to be twice as much as any other mine in the world can claim. This is a small number and it goes to show just how rare dysprosium is. Tasman’s dysprosium content is 0.025%, which means LCM’s mine’s ore has 5.6 times the dysprosium content than Tasman’s mine.
    I am well aware that LCM’s mine doesn’t promise to produce much dysprosium. After all, it is found in extremely minute quantities in even those deposits that are richest in it. I am intrigued though by your statement that Tasman projects producing 200 tons of dysprosium each year. Let’s take a mathematical look at the logistics of that projection.

    How many tons of ore does Tasman plan to mine every year to produce 200 tons of dysprosium?
    200 tons = 200 X 2000 lbs = 400,000 lbs. Correct?
    Tasman’s dysprosium grade, per TMR, is 0.025% which = 0.00025 of each specific weight considered, be it pounds, kilograms, tons, or whatever. Correct?

    So we should be able to compute how many times 0.00025 goes into 400,000 to give us the total amount of ore that Tasman says they will be processing every year to achieve their stated dysprosium goal. 400,000 divided by 0.00025 = 1,600,000,000 lbs of ore = 800,000 tons of ore each year.

    You are better qualified than I am to determine whether 800,000 tons of ore per year is realistic for a mining company to project mining, beneficiating, and processing to reach its stated goals. Are there a lot of mines in the world currently mining that kind of tonnage? Do you know how much Molycorp is doing? I would think that even if there are other miners doing that much, it would be more difficult for a rare earth mine to do so, considering the complexities that rare earths bring to a project. In comparison, LCM’s mine expects to mine and process only about 51,000 tons each year to produce its projected targets. This is a result of the higher grade in LCM’s mine that we discussed earlier.

    I will try to address some of your other points tomorrow.

    January 27, 2015 - 1:09 AM

  • Fixed

    Very interesting how Steen would have to process such a small quantity of ore to supply LCM with all the critical REE’s that LCM would then deliver to magnet manufactures that they “are” suppling but now it wuold be a a much greater profit margin. If Tasman every gets off the ground that they would require to process a hugh amount of ore to get 200 tons of Dy. Tasman would hope to sell at a greater price than what is shown to public which according to Jack. I guess whatever prices are available are much lower than what Dy is really selling for? So we will just take Jack at his word. I relise that Dy is very important for use in rare earth magnets to keep temperature from affecting the magnets preformance in extreme conditions but GWMG has the right amount of all the rare earth for what LCM needs. Steen is not to supply the world with Dy it is to supply LCM with a low cost high grade supply to LCM that’s why we consider Steen as LCM’s mine. I do hope Tasman can build the biggest plant ever built to produce 200 tons of Dy each year but to have to process that much ore seems to be “not right sized” maybe to Jack in Tasmans case Bigger is the new better…I do believe that Marc Leveir had mentioned that because of the high grade of the ore the processing plant needed to produce what is required to feed LCM would be like a pilot plant on steriods…lol…Now if that isn’t the perfect right size for GWMG’s mine to magnet ” METALS and ALLOYS then there is no such thing Good luck to Tasman and hope it turns out the way Jack says but sounds kinda risky to process so much tonnage on the hope you can sell it at some high private auction underground price. If dy is that hard to come by then Tas has a chance but better get going they have alot of work to do and need alot of money.

    January 27, 2015 - 8:06 AM

  • Tim Ainsworth

    Jack, perhaps you missed the fact but Metal Pages is actually showing Dy Metal FOB @ $475kg, down from $530kg last July.

    DyO FOB has flat lined at $340kg since August, despite Chinese State purchases for national stockpiles in the interim.

    Quite frankly of far more concern is Lynas’s QR today stating they had to place 60t of NdPr onto the Chinese spot market out of 542t produced. On that basis ROW sure as hell ain’t going to be needing much Dy any time soon.

    ATM RE industry isn’t supporting any producers, in or out of China, irrespective of fancy paper projections.

    January 27, 2015 - 8:29 AM

  • Tim Ainsworth

    Jack, how do you substantiate: “There has been as much reduction of Dy content in magnets as is possible”?

    Certainly not the attitude of Siemens, currently at 0.7% with the D6, about to launch D7 with revised topography, and quite confident of reducing to 0.1% for the D10 behemoth.

    Certainly not the attitude of Hitachi, beyond NEOMAX:

    “HMA has recently developed new technologies to even further reduce dysprosium use, which Okamoto referred to as “one of our top-priority projects.” However, he could not disclose any more technical details about this next-generation magnet.

    “We think that the trends are for reduced-Dy magnets and even for Dy-free magnets,” he said.”

    http://articles.sae.org/11988/

    Interesting point is anyone searching “dysprosium reduction” will find a host of references, all appear as ROW innovation.

    Beyond the high tech, designers seem well aware that relatively simple adjustments to magnet geometry & integrated cooling systems in new model design reduce the need for an input prone to high price/supply insecurity.

    Difficult to see how NdPr justifies touted CAGR’s ATM, let alone Dy.

    January 27, 2015 - 9:06 AM

  • Jack Lifton

    Tim,

    You and I apparently differ in our contacts. With regard to rare earth permanent magnets the REPM industry is experiencing a plateau in the reduction of the use of dy in Ne-Fe-B magnets for OEM automotive use, the largest single industry use. In my youth we said that Macy’s doesn’t talk to Gimbels, which meant that competitive advantage requires discretion and a bit of deception. I doubt that Siemens would say that they can only produce more expensive REPMs than Phillips or that Hitachi would say the same with regard to Shin-Etsu.
    I have very good access to REPM industry analysts and I am actively involved in the REPM manufacturing industry in the USA, and I believe what I wrote and recently said publicly in a lecture about the future of dysprosium in REPMs and of its supply.

    Jack

    January 27, 2015 - 9:21 AM

  • wwwater

    Springtrader, here is a more simpler method of calculating the amount of ore Tasman would have to process to market 200 tonnes of Dy annually.
    Based on the recovery of Dy per tonne of ore of 2.04 kilograms by Tasman and 5.79 kilograms by SKK, Tasman has to process 2.83 times as much ore as SKK.
    In the SKK FS it is stated that 461 tonnes of saleable Dy will be produced from the 799,400 tonnes of Proven and Probable deposit. Therefore 35.46 tonnes of saleable Dy on processing of 61,492 tonnes of ore annually 799,400/13 (13 year LoM). To produce 200 tonnes of saleable Dy SKK would have to process 5.64 times as much ore or 346,814 tonnes however Tasman only produces 2.04 kilograms per tonne of Dy versus Skk’s 5.79 therefore Tasman would have to process 2.83 times as much ore or 981,483 tonnes to recover 200 tonnes annually.

    January 27, 2015 - 10:38 AM

  • Tim Ainsworth

    Jack, when you say OEM automotive use I presume you are restricting yourself to drive trains, largely hybrid/EV? From what I can find reductions there seem to be about 40/50% so will be interesting to see what further progress can be made.
    Of course cabin & externals are a whole different ball game and to leverage weight/power advantage NdFeB to be cost efficient re ferrite, just one potential growth area sans Dy in our ever more automated world.
    I guess the other way of looking at it is if Dy ROW (which really does appear to be a very small market) pricing remained in a range $340/440kg for the foreseeable future can you envisage any of the primary Dy projects being economic?

    January 27, 2015 - 10:44 AM

  • Springtrader

    Jack; Looking over your post to me it looks like I responded to most of what you hoped for me to respond to. I don’t mean to diss Tasman in making my point that Europe would be well served in backing the Great Western project. There is no rule against Europe backing two horses in the same race, especially since both of them have operations in their own backyard.

    The fact that Great Western plans a smaller operation was once considered a plus by pundits, but now the idea gets disparaged against the grandiose plans of others. Still though, Great Western has a strong mix of critical rees, and with the current tight supply of them in the western world, I should think that the promise of an steady and reliable supply of those rees, delivered sooner than anybody else can do it, should not be overlooked by the planners and financiers in Europe.

    You mention that LCM is the smallest alloy maker outside of China, with the implication that they are not relevant because of that. Please remember that the premise of your article is that Europe wants to ensure in-house production and downstream processing of rare earths to protect itself from world-wide disruptions of supply and prices. Is it fair then to compare LCM’s size with far eastern alloy makers? The only relevant question, per your article’s premise, is: How do LCM’s production totals compare with all the other European alloy making companies? Are there any other European rare earth alloy makers? LCM’s alloy and pure metal production may seem rather small today, due to production and expansion restrictions caused by over-priced and scarce oxides, but, if Europe is willing to step up to the plate to finance the Steenkampskraal project, plans are in place to greatly expand LCM’s production capabilities to an amount that you might not be so prepared to sneeze at, all from its own profits. LCM might be only a fledging, but it is Europe’s fledgling, and one wonders why they hesitate to invest in its future.

    As for whether I can name any Slovenian REPM manufactures, the answer is no, but should there be any, I wonder if they would appreciate a steady and consistently priced supply for their needed alloys. You should have them call LCM.

    I say again that all it will take is a $250 million investment by Europe to obtain a safe and fairly priced, steady supply of the critical rare earths that its industries desperately need. I’m sure they could even negotiate a sizable equity postition in Great Western Minerals to enable them to profit in two ways from the transaction: A healthy and growing rare earth industry on their continent, and a share in the profits made by Great Western and LCM once they are in production.

    Thanks again for your willingness to share what you know.

    January 27, 2015 - 11:07 AM

  • Springtrader

    Thanks wwwater. I still think my calculations are easier to follow. To each his own. 🙂

    The question of the hour though, is: Is my 800,000 tons or your 981,000 tons of annual tonnage reasonable for Tasman to project? Do you know of any other mines thatt large?

    January 27, 2015 - 11:15 AM

  • Fixed

    In my youth we said that Macy’s doesn’t talk to Gimbels, which meant that competitive advantage requires discretion and a bit of deception. I doubt that Siemens would say that they can only produce more expensive REPMs than Phillips or that Hitachi would say the same with regard to Shin-Etsu.
    I take it that… that should also hold true to those competing jr ree companies who would hope to be first to market and what bit of harmless deception one might put out to slow or stop those who are actually far more advanced than others regardless what the truth be…. be it told. Yet we have yet to hear from the Tortoise or old gray mare…you choose …who quietly is plodding along blinders on with one goal to reach the finish. We shall see said the blind man….Yes we shall see

    January 27, 2015 - 11:40 AM

  • Fixed

    If I wrote this I would be able to answer. If someone ask to name who it was several names should be able to be given but why haven’t you even named one yet several? Maybe it’s a secert who knows…but why put it out there in the first place….Please don’t suggest slovenians is a sufficient enough answer as one could say that is deception at it’s best…………….. several European rare earth metals/alloys makers that will supply any of several European rare earth permanent magnet alloys makers, the customers of which are European end-use component providers to Europe’s – See more at: http://investorintel.wpengine.com/rare-earth-intel/european-holy-grail-rare-earths-tasman-metals/#sthash.BPwpsVgH.dpuf

    January 27, 2015 - 12:08 PM

  • Springtrader

    In trying to determine if Tasman’s projection of 800,000 tons or so projection of annual ore throughput is reasonable, I went to Molycorp’s webpage and scanned its 3rd quarter report to see how much ore they processed over those three months. They didn’t give the exact number, so I have to do some sleuthing to try to figure it out. This is an excerpt from Molycorp’s 3rd quarter earnings report: “Production volume for the quarter was 691mt a 58% decrease over second quarter production of 1639mt”. If we take the 1639 tonne figure and use Molycorp’s 6.57% grade of total rees (per TMR), we should be able to figure an approximate amount of tons of ore they needed to process in order to produce 1639 tonnes of finished product. Does that sound reasonable? Here is how I do it:

    6.57% goes into 100% 15 times, so if we multiply the 1639 tonnes by 15 it should give us an idea how much ore Molycorp processed during the 2nd quarter:

    1639 x 15 = 24,585 tonnes of ore processed in the 2nd quarter.

    Now if we multiply that 24,585 tonnes of ore by 4 it should give us a general idea of Molycorp’s annual ore throughput:

    24,585 x 4 = 98,340 estimated annual tonnage of ore

    I’m not saying this is accurate, but it is probably somewhere in the ballpark. I faintly remember a respected analyst saying something like, ” Molycorp the core asset of which is a hugely expensive mining operation (for what it is and what it can produce) and a vastly oversized processing plant…” If 93,340 tons of ore a year is hugely expensive and vastly oversized, how should 800,000 tons per year be characterized? One would think it would be the same, times 8, no matter what skew of rare earths it is producing.

    I repeat again: There are higher graded, more advanced, and more reasonably priced options for European financiers to consider than the behemoth mining operation proposed in this article.

    January 27, 2015 - 12:27 PM

  • Fixed

    No response from the ree pundint who wrote this… typical…If you avoid it …it will go away and nobody will know…or care what the truth is…

    January 27, 2015 - 3:58 PM

  • Fixed

    Name ” The Companies” by name so I can see for myself…please …or maybe there is no companies? If there us name them it’s that simple Jack…. The downstream operations of Tasman will be done by European Union companies t – See more at: http://investorintel.wpengine.com/rare-earth-intel/european-holy-grail-rare-earths-tasman-metals/#comment-401055

    January 27, 2015 - 4:05 PM

  • Lid

    Jack,
    I believe you and most of people understand the importance of the price, if future price is not predictable, isn’t it better use more realistic current price rather than betting on higher future price? further, is there any plan B from Tasman if the price doesn’t go the way that Tasman is hoping for?

    Bob,
    Thanks for correcting me, I thought the 10% you were talking about is the discount rate. and still the negative $285M NPV looks not great at all.

    January 27, 2015 - 4:45 PM

  • Fixed

    Is LCM a european union downstream ree company that Tasman will have “do” their downstream operations or not. If not who will again quote from Jack I did not write this qoute Jack Lifton did and should name those, right as Tracy says back it up. ” The downstream operations of Tasman will be done by European Union companies” Again who will they be. Jack you make it sound as if these “European Union companies” have some sort of binding contract or agreement with Tasman who has not produced anything. Is LCM a European Downsteam company that could take Tasmans future processed tolled ore and do something with it. If not LCM then who? Who are these several European REE metal alloy making companies? Simple questions deserve simple answers and no answer is even more intriguing. If there are several companies ready to process Tasmans product and LCM is not a consideration than who is and how long will it be that these several European companies will have to wait till Tasman ships it’s first shipment? Cmon Jack you know the answer just answer.

    January 27, 2015 - 4:54 PM

  • Mr.Jimmy

    Keep pumping all those dog companies of yours Jack.

    There is only one REE project that matters and that’s GMA out of Quebec. A company that couldn’t give a hoot about Jack and his bias opinions. Pump up those dogs Jack !!

    January 27, 2015 - 5:21 PM

  • Daniel

    Time and Demand are not a constant. World wide demand for end user is a misleading indicator. Consumer products made for the 1% has a potential for another 49% increase as 3 billion more people increase their income and consumption. 100,000 tons current demand is actually multiply by 50. The constraint is financing, laws and taxes.
    India goal of 160 billion dollars in solar upgrade 5X the US and 3 smart city, defense manufacturing for drones requires technology and jobs transferred from the US. The financing issue I can easily solve as well as a supply of rare earth from the only credible player outside of China.
    Greece just sided with Putin. Spain and Portugal is about to join implying the end of the EU so where does that leave TAS? The Swiss Franc currency jumping 30% and payment avoiding the risk from monetary easing/devaluation in the Euro. 34 tons of Dy would make GWG a billion dollar company on NdFeB:Dy and Siemens technology to coat the outer layer would increase the valuation multiple fold to maximize the use of Dy. A multi-billion dollar company just on NdFeB:Dy.

    January 27, 2015 - 6:19 PM

  • springer

    To Fixed:
    Non-China and European REE oxide&metals companies:
    – Rhodia in France
    – Silmet in Estonia
    – Ulba in Kazakhstan
    – LCM in UK

    January 28, 2015 - 7:51 AM

  • Springtrader
    January 28, 2015 - 8:11 AM

  • springer

    To Springtrader:
    Ulba can process anything from Uranium to HREE’s (like during the soviet times). Yet, the focus at that times was on more “politically important” uranium compounds.
    http://www.kazatomprom.kz/en/#!/industry/products/products
    http://kazcham.com/kazakhstan-to-produce-1500-tons-of-rare-earth-metals-in-2012-official/
    http://www.reuters.com/article/2011/10/21/us-russa-rare-earths-idUSTRE79K1OO20111021 “…Lovozersky ships the concentrate to the Solikamsk Magnesium Plant in the Urals, which exported 1,466 tonnes of oxides last year to U.S. Molycorp’s plant in Silmet, Estonia and Kazakhstan’s Ulba Metallurgical Plant for processing….

    January 28, 2015 - 12:04 PM

  • Fixed

    Thank you and I bet Jack now knows also. So next question is out of those which company is currently suppling the Rare Earth Magnet Manufacturers with material and which is suppling the good stuff you know the preferred strip cast.

    January 28, 2015 - 12:29 PM

  • jakeslicks

    I do appreciate the entertainment of the authors articles. But I would encourage any Investor to read the “disclaimer” immediately at the bottom of the authors article and then click the link InvestorIntel link to see who he represents. Keep pumping Jack, I know we all have to make a living, but if it were me I would feel to “greasy” to do what you do. That’s just me.

    January 28, 2015 - 1:02 PM

  • Jeff Thompson

    I’m interested to revisit this very detailed piece on Tasman, and to hear the community’s viewpoints on whether the recent onset euro currency devaluation will have any bearing on Tasman’s prospects and/or timelines, positively or negatively, or perhaps even neutrally? Certainly it will cause the U.S. dollar to strengthen versus the euro (especially if the U.S. Federal Reserve does actually begin slowly raising interest rates), but since Sweden wisely maintained an independent currency, does that bolster Tasman’s ability to come to production, or place a crimp in their ability to sell to downstream European customers?
    I can see the argument that euro devaluation may have already been “priced in”, as commentators like to say, having been telegraphed for months ahead of time, but sometimes the actual beginning of something has a much different effect than conventional wisdom had anticipated.
    Happy Easter all.
    Jeff Thompson

    April 5, 2015 - 4:51 PM

  • InvestorIntelReport: A market turnaround? | InvestorIntel

    […] and technology metals news, Tasman Metals Ltd.’s $TSM.V was up +8.89% and $TAS +8.33% on no news. The European Holy Grail for Rare Earths by Jack Lifton or Taking the High Road according to Christopher Ecclestone, if you do not […]

    October 5, 2015 - 1:57 PM

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