EDITOR: | July 7th, 2017 | 10 Comments

InvestorIntel Rare Earths Monthly – June 2017

| July 07, 2017 | 10 Comments
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To those who contacted me with some feedback on my new three-pronged series of articles, thanks for that. Although can I suggest that you use the comment section on the InvestorIntel article rather than my personal email, that way others can share in the conversation. I must admit I am a little non-plussed and un-impressed with the response of the ASX listed gold companies. So much so that I will proceed full steam ahead with bringing forward the next series on ASX listed technology-resource companies (ie lithium, graphite, cobalt). So watch this space! Again, keep those comments coming, so I can provide you with what you require.

June? What did it bring? Well, in summary, more questions than answers. The Peak Resources Ltd. (ASX: PEK)/Pala/ERP collaboration on the Mountain Pass auction did not pass muster, and the question regarding Chinese involvement in US strategic minerals is raised. The question of why am I not writing tomes on Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) / MRT / partnerships has been raised and I will address later. I will also start my coal and rare earths co-development watch with an interesting thought on development models.

As always, let’s look at the news on rare earth prices.

At last, rare earth prices are approaching, are at or have passed the 2 year high point. And the news out of China is for further increases. This is very positive territory indeed. That is except for dysprosium and yttrium. My contacts are saying that dysprosium is still in good demand and prices will improve. But yttrium will need close scrutiny. Last month I asked for feedback as to why you feel that those factors that are present to give rare earths in general a positive trend are not being reflected in dysprosium and yttrium. I repeat the question.

Below is the list of published information pieces (with hyper-links where possible) from:

  • Companies in the rare earths space
  • China
  • Other Countries
  • Rare Earths related market research and commentary

And where it represents a shift in an REO-business fundamental or a significant development for the company I will provide commentary. Note that certain references will require registration or purchase (*). Selecting the company name of any members of the InvestorIntel Rare Earths family will take you their InvestorIntel Member information page. Selecting the company name of Non-InvestorIntel members will direct you to their website (where available).

Alkane Resources Ltd. (ASX: ALK | OTCQX: ANLKY)

Date Source Title
1 Jun Marketwired The Gold Report examines Rare Earths and Gold Projects advancing in Australia
13 Jun InvestorIntel Ian Chalmers addresses #CTMS2017 audience on hafnium

InvestorIntel advertorial member

Arafura Resources Limited (ASX: ARU)

Date Source Title
2-Jun InvestorIntel Rare Earths at the right time, right place and right price?
7-Jun InvestorIntel Detailed Resource Assessment Completed

InvestorIntel advertorial member

Hastings Technology Metals Ltd. (ASX: HAS)

Date Source Title
7-Jun InvestorIntel First Drilling results indicate potential for significant expansion of Bald Hills resources and pit at Yangibana
19-Jun InvestorIntel Updated Investor Presentation – June 2017
21-Jun InvestorIntel Exceptional results from Yangibana North resource expansion drilling to extend mine life

InvestorIntel advertorial member

Lynas Corporation (ASX: LYC | OTC: LYSDY)

Date Source Title
7 Jun InvestorIntel Lynas targets multiple Rare Earth supply chains

InvestorIntel advertorial member

Matamec Explorations Inc. (TSXV: MAT)

Date Source Title
13 Jun InvestorIntel Need Diversity & Security? Think Matamec
23 Jun InvestorIntel Matamec CEO on developing one of North America’s most advanced rare earths projects

InvestorIntel advertorial member

Northern Minerals Limited (ASX: NTU)

Date Source Title
2 Jun InvestorIntel All Bulls on Northern Minerals’ Dysprosium outlook
7 Jun Business News Mining Contractor hits the ground running at rare earths mine
14 Jun InvestorIntel George Bauk addresses #CTMS2017 audience on “Revving up the Heavy Rare Earths Engine”

InvestorIntel advertorial member

Peak Resources Ltd. (ASX: PEK)

Date Source Title
15 Jun InvestorIntel Peak Resources announces outcome of Mountain Pass Rare Earths Mine auction

InvestorIntel advertorial member

Search Minerals Inc. (TSXV: SMY)

Date Source Title
28 Jun InvestorIntel Search Minerals CEO at #CTMS2017 on becoming the next North American Rare Earth Supplier

InvestorIntel advertorial member

Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF)

Date Source Title
7 Jun Resource Clips Commerce Resources and Ucore Rare Metals to co-operate on rare earths supply chain
8 Jun Stockhouse Commerce Resources and Ucore Rare Metals: The Beginning of a Beautiful Friendship
9 Jun Creamer Media’s Mining Weekly Commerce, Ucore ink MoU for rare earth development partnership
10 Jun Mining Technology Canada’s Commerce Resources signs MoU with Ucore for development
12 Jun InvestorIntel Ucore Consortium wins US DOE bid for Rare Earths from Coal Industry
12 Jun InvestorIntel US Congress frees up US$20M to support Ucore’s Bokan project, expands technological reach
12 Jun InvestorIntel American Industrial Policy regains its Mojo
14 Jun InvestorIntel Ucore wins Department of Energy award for Molecular Recognition Technology process
15 Jun World Coal Ucore Consortium wins US DOE bid for rare earths from coal industry
19 Jun InvestorIntel Ucore welcomes University of Kentucky to US Rare Earths Consortium

InvestorIntel advertorial member

Commerce Resources Corp. (TSXV: CCE)

Date Source Title
5 Jun Resource Clips Commerce Resources and Ucore Rare Metals to co-operate on rare earths supply chain
7 Jun Stockhouse Commerce Resources and Ucore Rare Metals: The Beginning of a Beautiful Frienship?
9 Jun Creamer Media’s Mining Weekly Commerce, Ucore ink MoU for rare earth development partnership
10 Jun Mining Technology Canada’s Commerce Resources signs MoU with Ucore for development

Non-InvestorIntel advertorial member

Medallion Resources Ltd. (TSXV: MDL | OTCQX: MLLOF)

Date Source Title
1 Jun Stockhouse Medallion and Rare Earth Slats agree to produce rare earth products

Non-InvestorIntel advertorial member

Mkango Resources Ltd (TSXV: MKA)

Date Source Title
26 Jun Reuters Canada’s Mkango aims for rare earths production from 2020

Non-InvestorIntel advertorial member

Mountain Pass (former Molycorp property)

Date Source Title
12 Jun Financial Times* Would-be miner of rare earths bets on electric cars
12 Jun Investing News Network* Who will buy the only US Rare Earths Mine?
13 Jun Wyoming Business Report Only functional US rare earths mine to sell tomorrow
15 Jun MINING.com Only producing US rare earths mine goes on the block tomorrow
15 Jun InvestorIntel Peak Resources Limited: Outcome of Mountain Pass Rare Earths Mine auction
17 Jun Industrial Minerals* Chinese bidder snaps up only commercial rare earths mine in US
17 Jun MINING.com Mountain Pass sells for $20.5 million
18 Jun Fox News Insider Trump Energy Dept seeks to mine elements monopolized by China
23 Jun Bloomberg America’s only rare earth mine is stuck in a distressed debt dispute
23 Jun Law360 $20.5M Ch. 11 bid approved for Molycorp Rare Earth Mine
24 Jun Creamer Media’s Mining Weekly America’s only rare earth mine mired in distressed debt dispute
26 Jun The Hill Rare earth rancor: Feds must stop Chinese purchase of US mine

Non-InvestorIntel advertorial member

Namibia Rare Earths Inc. (TSXV: NRE)

Date Source Title
22 Jun MarketWatch Namibia Rare Earths Inc. announces transition of listing to the TSX Venture Exchange

Non-InvestorIntel advertorial member

Quest Rare Minerals Ltd. (TSX: QRM)

Date Source Title
29 Jun GlobeNewswire Quest obtains International Patent for its selective Thermal Sulphation Process

Non-InvestorIntel advertorial member

Rainbow Rare Earths (LON: RRE)

Date Source Title
6 Jun Proactive Investors UK Rainbow Rare Earths making solid progress towards first production
17 Jun Mining Review Rainbow Rare Earths’ Gakara project is big in Burundi

Non-InvestorIntel advertorial member

Rare Earth Salts

Date Source Title
1 Jun Stockhouse Medallion and Rare Earth Salts agree to produce rare earth products

Non-InvestorIntel advertorial member

Texas Mineral Resources Corp. (OTCQX: TMRC)

Date Source Title
12 Jun InvestorIntel American Industrial Policy regains its Mojo
27 Jun Penn State News DOE grant continues research into rare earth elements extraction from coal

Non-InvestorIntel advertorial member

China

Date Source Title
11 Jun MDPI China’s Rare Earths production forecasting and sustainable development policy implication
20 Jun Industrial Minerals* Chinese producers announce rare earth price increases
27 Jun Marketplace.org Why the US buys all its rare earth metals from China

Other Countries

Date Source Title
3 Jun Industrial Minerals* Russian Government plans to boost rare earths output
5 Jun Saskatoon StarPhoenix Canada New project aims to extract rare earth elements from uranium tailings
7 Jun Deutsche Welle Japan rare earths metals discovery
10 Jun Energy.go USA DOE announces $6.9 million for Research on Rare Earth Elements from coal and coal byproducts
12 Jun InvestorIntel The Russian and Canadian Economic Power Pact Re-engaged
13 Jun Washington Examiner USA Coal industry could be in store for a ‘rare earth’ reboot
14 Jun Agri-Pulse* Research focuses on extracting rare earth elements from coal
16 Jun Quartz The US Coal Industry’s future could be to mine rare earth metals for wind turbines
19 Jun News Item Rare Earth Elements: 21st century co-gens?
20 Jun The Exponent Telegram Rare Earth element research could boost coal industry
23 Jun Nikkei Asian Review Japan Shin-Etsu to lift output of rare earth magnets in Vietnam
25 Jun Bluefield Daily Telegraph Local engineering firm receives grant to study rare earth elements in coal

Market Research and Commentary

Date Source Title
1 Jun Green Mountain Outlook* Rare Earths Market overview along with competitive landscape, Company profiles with product details and competitors and forecast 2022
9 Jun InvestorIntel InvestorIntel Rare Earths Monthly – May 2017
9 Jun RealClearEnergy Cost of Elon Musk’s Dream much higher than He and Others imagine
16 Jun E-Scrap News EPA recognizes advance in rare earth element separation
24 Jun EurekAlert Making ferromagnets stronger by adding n0n-magnetic elements
25 Jun Satellite PR News* Global Rare Earth Metals market growth with 13.67% CAGR by 2021 – Report includes (Five Forces Analysis, Manufacturers, Growth, Drivers, Opportunities, Challenges)
30 Jun MilTech* Rare Earths Market development trends, key manufacturers and competitive analysis 2017-2021

Let’s look at the big news and what are the implications?

The auction for Mountain Pass has been won by MP Mine Operations LLC – a Chinese-led consortium including rare earths miner Shenghe Resources. The mine, which was the only functioning rare earths mine in the US before it went bankrupt in 2015, went up for auction after declaring Chapter 11 bankruptcy protection.

MP Mine Operations (MPMO) put in a winning bid of $20.5 million, half a million above the competing consortium made up of ERP Strategic Minerals LLP, Swiss private equity firm Pala Investments and Peak Resources Ltd. (ASX: PEK), an Australian rare earths company. The losing consortium also includes two creditor groups from the bankruptcy of Molycorp, the mine’s former owner.

The deal still faces scrutiny from regulators, who may take issue with foreign ownership of a strategic asset. Rumblings about foreign ownership of strategic assets have already started. As this is purely an issue for the USA I will make no comment but I will note that Shanghe Resources appear to be the main name of Chinese interest in non-Chinese rare earth opportunities across the globe.

Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) and MRT. Let me be up front about technology development – I love it! When new science advances to produce new technology that takes on past paradigms, that’s what makes processing so interesting. So why I am I not writing tomes about MRT? I am waiting for the data. The concept of improved selectivity at reduced CAPEX and OPEX is mouth-watering, but I want to see the data. I have been thinking about how to present this new technology to you in a way that you can understand. The only way I can think of is by a like for like comparison between conventional solvent extraction, conventional ion exchange, and the claimed potential game changer, MRT. This requires data on all three technologies on the same feed material, and that data has to be across the whole operation, and that data is to be of a standard acceptable to a bankable feasibility study. I eagerly await the data. Whilst on the subject of technology, I also await similar data on the US government sponsored research into separation technology. I believe the RapidSX work by Gareth Hatch and his team at Technology Metals Research is nearing completion. What an article that would make if all four technologies could be critically compared! I wish!

Rare Earths extraction from coal. Interesting. Is it possible? Well, if it’s there and I presume it is, well I presume it’s extractable. But is it economic? Well, in a previous life, I extracted rare earths from sea bird droppings! But that is another story. To be serious though, the coal or coal waste extraction story has piqued my interest from another view point. That is – Government support. As a past project developer, I have experienced first-hand the difficulty in getting financial backing, be that private or public, and I know all junior REO explorers have been in the same boat. But look at the REO and coal story. Government financial backing; local governments claiming that REO processing could be the saviour of their State’s coal mining industry; REO processing is an environmental benefit; what is the lesson? If you can get Government on side, if the local community is supportive, if you are actually seen as doing your society a service, your development may be a lot easier. You may wish to reconsider your social licence approach. I will watch the technology development of REO extraction from coal with interest and will keep you posted.

A repeat (though reframed) question. Given the Shenghe Resources involvement in the Mountain Pass auction, is it a pre-requisite for success to have Chinese, Japanese or other Asian backing? Can a North American exclusive model succeed? Again, your thoughts please!

See you next month.


Steve Mackowski

Editor:

Mr Mackowski is a qualified engineer in mineral processing with over 30 years technical and operational experience in rare earths, uranium, industrial minerals, nickel, kaolin ... <Read more about Steve Mackowski>


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Comments

  • Christopher Ecclestone

    Great review.. Thanks… Not sure there is a “North American” model for REE development.. what there has been (i.e. Molycorp) is more a model to avoid… we need a company that can invent a model that works. I am pretty sure the Asian model is NOT applicable. I subscribe to the small is beautiful model and no-one has dared apply that yet.

    July 7, 2017 - 6:16 AM

    • Jack Lifton

      Christopher, You are, as usual, correct about the small is beautiful model, and for your information and Steve’s it is about to be applied. The DoE project is NOT ABOUT COAL ASH(!), it is about extracting, separating, and refining individual rare earths from the clay overburden “waste” from certain coal strip mining operations. Penn State University has determined that certain of these clay wastes contain adsorbed ionic rare earth species-including scandium. Further Penn State has determined that these ions can be removed from the clay by washing it with aqueous ammonium sulphate solution and or saline solution. Three groups were selected by the DoE to prepare plans to produce profitable rare earth forms from these clays each with a different separation technology. It is assumed that the extraction will be done by heap leaching. One group in which Texas Mineral Resources is involved will use continuous ion chromatography, which is not your father’s ion exchange, for separation; another group that involves Ucore will use MRT; and a third group based on a chemical engineering firm called Equinox will use some form of solvent extraction. In 18 months DoE will choose a “winning” design and that group will get 24 million dollars towards a 30 million dollar operational plant build. I have extensive experience with the groups that developed both MRT and CIC; I have also reviewed accelerated solvent extraction technologies in the USA and Europe. I think that all three technologies work, but I think that MRT and CIC have the inside track on cost efficiency. If the DoE project results in an operational plant producing rare earths profitably and if the extent of the American ionic clays is what the Penn State researchers believe then the USA may well become the world’s principal producer of heavy rare earths and scandium. There are extensive ionic adsorption clays containing rare earths in Chile, Uganda, Malaysia, and Indonesia. I believe that MRT or CIC or Rapid SX if proven by the DoE project will become the technology of choice for all of these “clays” and hard rock heavy rare earths projects will vanish. I also think that there are much better sources of hard rock light rare earths outside of China than the Mountain Pass deposit, so I suspect that the world’s non Chinese light rare earths will be produced in Africa, Brazil, and Australia not the USA.

      July 7, 2017 - 9:35 PM

  • Tim Ainsworth

    Jack, where is the market for HRE produced in the US, or anywhere else outside China?

    July 8, 2017 - 10:10 AM

    • Jack Lifton

      Tim,

      The market is in China, but I am suggesting that an domestic American producer can compete both ethically and price-competitively with legal Chinese producers.

      Jack

      July 9, 2017 - 8:16 AM

  • Tracy Weslosky

    I love this month-in-review written by Steve Mackowski. It’s a good ‘where are we today’. BTW, nice movement this last week in stock price for several companies including LYNAS. Of interest is this Matamec presentation from our Technology Metals Summit, which has now officially broken all of our records for views. Could this mean a renewed interest in heavy rare earths in the market? For ease, here is Andre’s presentation link on the InvestorIntel YouTube channel: https://youtu.be/k4NxPTmoDI8

    July 9, 2017 - 9:09 AM

  • Tim Ainsworth

    Jack, I fail to see the net benefit of potential American producers attempting to compete in the relatively tiny, over supplied, Chinese domestic mkt, maybe all of 1500tpa. Should they manage to be competitive won’t they just collapse HRE prices further?
    Surely the effort would be better spent rejuvenating the US middle supply chain, creating domestic demand, rather than trying to match China’s strength.
    A US RE industry will be initiated from innovative research, not out of the ground.

    July 9, 2017 - 10:25 AM

  • NdPrTbDy

    “As this is purely an issue for the USA I will make no comment but I will note that Shanghe Resources appear to be the main name of Chinese interest in non-Chinese rare earth opportunities across the globe.” Curious that you would make this comment but neglect to mention that Shenghe has also acquired a significant interest in Greenland Minerals and Energy’s Kvanefjeld project. Surely that transaction was worth a mention if only to re-inforce your point about Shenghe appearing the be the main vehicle for Chinese RE activities outside of China.

    July 10, 2017 - 4:14 AM

  • Michael Sadler

    kdnc

    July 13, 2017 - 4:14 AM

  • Alan Levy

    Dudes and dudettes, regarding Mountain Pass:
    It’s over. Done and dusted. The deal has closed! The bankruptcy court is through with this puppy.
    A CFIUS review, as far as I can see, was not triggered. According to QVT, “Shenghe has certain minority shareholder rights, including the right to a non-voting board observer, none of which confer any degree of control over the purchaser.”
    First order of business for the new owners – pack the chlor-alkali plant with C-4 and send it to its just resting place.

    July 15, 2017 - 8:35 PM

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