EDITOR: | June 8th, 2017 | 5 Comments

InvestorIntel Rare Earths Monthly – May 2017

| June 08, 2017 | 5 Comments
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Thanks again for the feedback on my new three-pronged series of articles. Together with this Rare Earths Monthly, the articles on ASX listed gold companies have started and should you provide positive feedback, I am thinking about including the next series being on ASX listed technology-resource companies (ie lithium, graphite, cobalt). The first article in the third string to my bow, that of the Search for Excellence, has just gone to press, so again I await your comments. And please, keep those comments coming, so I can provide you with what you require.

Well, in summary, May has been somewhat of a hold your breath month. You will realise why when I  discuss the implications and prospects of the Peak Resources Ltd. (ASX: PEK)/Pala/ERP collaboration on Mountain Pass later, along with progress on the Northern Minerals Limited (ASX: NTU) large scale pilot plant, the Alkane Resources Ltd. (ASX: ALK | OTCQX: ANLKY) Hafnium story, along with the watch-this-space progress of Canada Rare Earth Corp. (TSXV: LL), developing a rare earths trading business. I will then provide a developing look at what is influencing or achieving project development success, especially as to providing working financing models.

As usual, first things first, it’s back to the news on rare earth prices.


The positive signs are still encouraging on rare earths pricing overall and the news out of China concerning increases in domestic pricing is very welcome. Last month’s comments on dysprosium and yttrium not developing any upward trend to match that of the other rare earths is being maintained and could start to become concerning so we will need to be keeping a close eye on that situation. I would appreciate your feedback here 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.

As an ongoing reminder of the new format, 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. Again, 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
3 May InvestorIntel Alkane Resources to present at InvestorIntel’s 6th Annual Cleantech &Technology Metals Summit
12 May InvestorIntel Presentation to Texas conference on semiconductor materials
16 May InvestorIntel Presentation to Cleantech & Technology Metals Summit
26 May MilTech Rare Earths and Gold Projects advancing in Australia
30 May InvestorIntel Alkane Resources tells the Hafnium tale
31 May Geology for Investors The Gold Report examines Rare Earths and Gold Projects advancing in Australia

InvestorIntel advertorial member

Arafura Resources Limited (ASX: ARU)

Date Source Title
4 May InvestorIntel Arafura Resources Limited: Mines & Money New York – Presentation
30 May InvestorIntel Arafura’s Rare Earths Resource Intrinsically Competitive

InvestorIntel advertorial member

Hastings Technology Metals Ltd. (ASX: HAS)

Date Source Title
8 May InvestorIntel Hastings’ Yangibana Rare Earths Project gains “Lead Agency Project Status”
12 May InvestorIntel Project Director appointed for Yangibana rare earths project
16 May InvestorIntel Final DFS drilling programme commences at Yangibana
22 May InvestorIntel Successful Hydromet Piloting completed – All processing flowsheets tested

InvestorIntel advertorial member

Lynas Corporation (ASX: LYC / OTC: LYSDY)

Date Source Title
15 May InvestorIntel Appointment of new Non-Executive Director

InvestorIntel advertorial member

Northern Minerals Limited (ASX: NTU)

Date Source Title
1 May InvestorIntel MACA Limited awarded A$6m mining contract for Browns Range
2 May Business News Automotive sector drives attraction to rare earths
2 May InvestorIntel Investor Presentation
2 May InvestorIntel Northern Minerals revs heavy Rare Earths engine
3 May Investing News Network* First Dysprosium mine outside China could be coming to Australia
8 May InvestorIntel Analyst says Northern Minerals best positioned to ride the wave of revived rare earth interest
10 May InvestorIntel Browns Range grade control drilling underway
12 May InvestorIntel Northern Minerals presentation Asian Metals Rare Earths Summit, Shanghai
16 May InvestorIntel Northern Minerals Limited presentation Cleantech Summit, Toronto
16 May Business News WA Wall Street investment bank sets big price target for Northern Minerals
29 May InvestorIntel Northern Minerals Signs, Seals, Delivers Future

InvestorIntel advertorial member

Peak Resources Ltd. (ASX: PEK)

Date Source Title
12 May InvestorIntel What brings Peak Resources, Pala Investments and ERP Strategic Minerals together?
31 May Financial Times* Battle heats up for control of sole US rare earth mine

InvestorIntel advertorial member

Search Minerals Inc. (TSXV: SMY)

Date Source Title
12 May InvestorIntel Search heading for the Rare Earth Podium

InvestorIntel advertorial member

Canada Rare Earth Corp. (TSXV: LL)

Date Source Title
3 May Yahoo Finance Canada Rare Earth completes hedged purchase and sales agreements and enters in to additional agreements
17 May Marketwired Canada Rare Earth completes the purchase and sale of 90 metric tons of concentrate and is on schedule for completion of an additional 380 metric tons in June 2017

Non-InvestorIntel advertorial member

Mountain Pass (former Molycorp property)

Date Source Title
2 May MINING.com ERP Strategic Minerals makes bid to re-open Mountain Pass
9 May Fox News The critical National security battle the media isn’t telling you about
12 May InvestorIntel What brings Peak Resources, Pala Investments and ERP Strategic Minerals together?
31 May Financial Times* Battle heats up for control of sole US rare earth mine

Non-InvestorIntel advertorial member

Quest Rare Minerals Ltd. (TSX: QRM)

Date Source Title
23 May Market Wired Mineral Processing Breakthrough could produce larger concentrations of Dysprosium, Praeseodymium, Terbium and Neodymium at Quest’s mine site

Non-InvestorIntel advertorial member

Strategic Minerals PLC (AIM: SML)

Date Source Title
6 May DIGITALLOOK Strategic Minerals to acquire outstanding shares in Central Australia Rare Earths Pty Ltd

Non-InvestorIntel advertorial member

China

Date Source Title
6 May Industrial Minerals* China testing stockpiled rare earths, announces new projects
16 May Market Watch* China expected to continue its dominance in the Global Rare Earth Metals Market during the forecast period
19 May Industrial Minerals* China Southern lifts middle, heavy rare earths prices again
19 May Industrial Minerals* China’s illegal rare earth mining crackdown bearing fruit, ministry says
20 May Xinhua 3 detained for illegal rare earth mining

 Other Countries

Date Source Title
1 May The Hitavada JNARDDC gears up to extract rare earth elements
6 May Fox News South Korea talks sunshine and rare earths as North Korea warclouds gather
10 May InvestorIntel USA: The REAL impact of the Metals Act on materials critical to National defense
14 May Business Mirror Philippines: “Game Changer” in mining sector
15 May Eurekalert* Rare Earth element mineral potential in the south eastern US coastal plain
16 May The Courier Mail Australia: Diamantina minerals province next mining boom

Market Research and Commentary

Date Source Title
5 May Assets Stock* Global Rare Earth Metals Market 2017 by key players: Xiamen Tungsten, Baotou Xinye New Materials, Chenguang Rare Earths New Material
7 May InvestorIntel InvestorIntel Rare Earths Monthly – April 2017
9 May MilTech* Global Rare Elements 2017 Industry Trends, Sales, Supply, Demand, Analysis & Forecast to 2022
10 May Bloomberg BMA Coal boosters look to Rare Earth extraction as lifeline
11 May QWTJ LIVE One Stop* Global Rare Earth Polishing Powder Market 2016 Historical Market, Growth Analysis, Opportunities and Forecast to 2022
11 May Satellite PR News* Europe, the Middle East and Africa Rare Earths Market Outlook – Latest Development and Market Trends 2017-21
19 May DailyHover* Global Rare Earths Phosphors Market Size 2017 – Shanghai Yuelong New Materials, Quzhou Aoshi Te Lighting, Phosphor Technology, OSAM
15 May PR Newswire* Rare earth magnet market witnessed growth of 8% CAGR during 2009 to 2016
22 May MilTech* Heavy Rare Earth Metals Market Analysis and Growth Forecast by Applications, Sales, Size, Types and Competitors by 2016-2020
22 May Satellite PR News* Light Rare Earths Metals Market: Segmented by Application and Geography Trends, Growth and Forecasts 2020
25 May openPR* Glass Powder Additives Market 2017 – Lynas Corporation Limited, Namibia Rare earths Inc, Metall Rare Earth Limited, Nanobase Technology
26 May Assets Stock* Global Rare Earth Elements REE Market 2017 – China Minmetals Corporation, Ganzhou Rare Earth Group, Great Western Minerals Group
30 May SwiftNary* Global Rare Earth Phosphors Market 2016 – China Minmetals Rare Earth, Keheng, Molycorp, Grirem Advanced Materials

Now, let’s look at the big news and what are the implications?

In the April Rare Earths monthly I declared that the Peak Resources Ltd. (ASX: PEK)/Pala/ERP collaboration on Mountain Pass was a very significant development and that the question of “WHY” needed to be answered or at least considered. In response to your feedback, rather than wait until this month’s report as promised, I prepared a separate article (What brings Peak Resources, Pala Investments and ERP Strategic Minerals together) delivering my thoughts. The veracity of my thoughts is now hanging in the balance. As are the future implications of the situation. There is another competitor in the auction for the rights to Mountain Pass. The auction is held next week. And the outcome will be very interesting as it will be the most significant recent development in the non-Chinese rare earths space. As I said earlier, we are at a hold-your-breath moment. I will provide commentary when the auction result is available.

It is good to see George Bauk and his team progressing on the Northern Minerals Limited (ASX: NTU) large scale on-site pilot plant. This important development is now well in train and we should watch for successful progress. I am thinking we will probably see this progress in the NTU quarterly reports and the occasional highlight. So, I’ll probably list all announcements and limit further comments to quarterly.

The Alkane Resources Ltd. (ASX: ALK / OTCQX: ANLKY) Hafnium story presented above is going to be an interesting by-product opportunity that has the potential to be more of a co-product as the hafnium use profile develops and the market expands (as might the price). A big tick to Ian Chalmers and his team.

I have been watching a bit of a dark horse develop with the watch-this-space progress of Canada Rare Earth Corp. (TSXV: LL), developing a rare earths trading business. This is an interesting model for North America to perhaps emulate. To me it looks like get the trading part running first, then potentially expand down the supply side into mine production, and/or, potentially expand up the demand side into further value adding. I’ll watch and comment with interest.

So looking at the ASX listed rare earths companies above, we can see the possible development stories for Peak Resources Ltd. (ASX: PEK), for Northern Minerals Limited (ASX: NTU), and for Alkane Resources Ltd. (ASX: ALK / OTCQX: ANLKY). But it may be also significant to see another point of difference between the Australian companies and let’s say their North American counterparts. And that is ownership. In previous writings I have stressed my view that to fit into the world of rare earths that is dominated by the behemoth China, you have to work out what your  “raison d’être” model is. The following tabulation of Chinese or other Asian shareholdings for some ASX listed rare earth companies is interesting to ponder.

ASX Listed REO company Shareholder to note Ownership Percentage
Arafura Resources Limited (ASX: ARU) East China Exploration 24.86
Greenland Minerals & Energy Ltd. (ASX: GGG) Shenghe Resources 12.5
Hastings Technology Metals Ltd. (ASX: HAS) Charles Lew (Singapore) 17.77
Northern Minerals Limited (ASX: NTU)

Conglin Yue

Jien Mining

40.8
5.5

Question. Is it a pre-requisite for success to have Chinese, Japanese or other Asian backing? Can a North American exclusive model succeed? 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

  • Paul Bokserman

    If you spent all of May under a rock, this should be the first stop for your Rare Earths fix. As usual, Mr. Mackowski has written a brilliant technical and analytical piece on the month.

    June 8, 2017 - 3:46 PM

  • Pennie

    Steve, only China sells at China FOB prices (not even all Chinese do). Viability should be determined on China domestic prices

    June 8, 2017 - 11:36 PM

    • Steve Mackowski

      Thanks Pennie. You are right of course. I chose the China FOB price simply as an example. I am trying just to show trending. People who want proper pricing need to obtain from organisations that provide this revive.

      June 9, 2017 - 2:54 AM

  • Don Ranta

    I see no mention of Rare Element Resources, which controls a rare earths deposit in Wyoming? I had heard it would be potentially a serious competitor with Molycorp’s Mountain Pass when it was fully developed. What is happening with Rare Element?

    June 12, 2017 - 8:17 AM

    • Steve Mackowski

      Don, my search engine looks worldwide for rare earths news. If a company doesn’t post then I don’t see anything. I chased the RER website. Looks like they haven’t posted any thing since 2016. So I cannot update any more than what’s on their website. You may wish to contact them directly. They may respond.
      Thanks for the comment.

      June 14, 2017 - 1:39 AM

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