EDITOR: | September 8th, 2014 | 13 Comments

Jack Lifton One-on-One with Ian Chalmers of Alkane Resources

| September 08, 2014 | 13 Comments
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one-on-oneSeptember 8, 2014 — In a new InvestorIntel weekly special, Jack Lifton interviews Ian Chalmers of Alkane Resources in episode 1 of One-on-One. The following is minute one of their conversation transcribed for your review. To access the complete interview, click here.

Jack Lifton: I’m always amazed by when I hear about things. People ask me why I don’t include Alkane on any of my lists because I just assume you’re a genuine polymetallic producer and since you’re not dependent on rare earths, I don’t want to include you on a list of rare earths. That’s the point, but…I looked at your website and I’d like to ask you a couple of questions. I’m a little confused by a statement that you say you’ll produce 1,200 tons of heavy rare earth mixed concentrate in your total, and that would be 5% of what?

Ian Chalmers:It’s meant to be about 5% of current world consumption of heavy rare earths…that’s what we mean by that. I know these numbers are all very vague and rubbery — that’s roughly what that number means.

Jack Lifton: And, tell me, I think I recall the number 1,200 pounds of yttrium. Is that correct?

Ian Chalmers: The total is about 1,300 tons of what we call, heavy rare earths….of which 900 is yttrium.

Jack Lifton: Okay. That is a very significant amount of yttrium. What I read on your website is that you expect to start producing next year.

Ian Chalmers: You mean 2016.

Jack Lifton: Here’s the point, that would be around more than 10% of the world’s production of yttrium at the moment and it would be, as far as I know, the first commercial yttrium produced outside of China in this century.

Ian Chalmers: That’s correct – that’s our understanding also.

Jack Lifton: Is that committed to existing customers at least under some kind of intent letter?

Ian Chalmers:It is certainly intent and interest. I mean, it’s the one mine to export that Shin-Etsu is not interested in as you’d expect being a magnet company they have no real interest. What we found though is once that Shin-Etsu deal started to crystallize we had a lot of approach from phosphor manufacturers and ceramics. The answer is, look, I think we can sell double that if we produced more. I think the option there is to sell a lot of yttrium.

Jack Lifton: What I mean is, are you open to any new interested customers for this?

Ian Chalmers: The answer is yes. Always happy to talk to people, absolutely.

Jack Lifton: Because I think here, in the U.S., there’s a couple of interested parties that I do not believe are aware of how far along you are. Now I understand your production of materials would begin in 2016. When would you actually have some yttrium in — I am assuming your form will be yttrium oxide?

Ian Chalmers:Yes it will. Yes, basically…I mean, look, with ramp up I think you’d start talking commercial quantities of yttrium sometime early 2017.

Jack Lifton: Okay, Okay. Well, I think you would be, as far as I know, and I’m quite familiar with what’s going on, I can’t see anybody coming out sooner than that outside of China, unless somebody with a bunch of xenotime should get into business right away.

Ian Chalmers:Yeah, sure, yeah.

Jack Lifton: But, that doesn’t seem to be in the cards, sort to speak, in the near…

Ian Chalmers: I don’t usually comment on other projects and where they are in their timetable, but you’re right, xenotime does provide an opportunity to get into production fairly quickly, yeah, yeah.

Jack Lifton: Well, the interesting thing — tell me, what other heavy rare earths would you be producing? Which ones?

Ian Chalmers: We’ll certainly produce substantial dysprosium, terbium, gadolinium and all of the other, what I call, exotics, right through the whole spectrum. We’ll produce, I’ll call it loosely, commercial quantities of all of those other rare earths as well. The reason we, kind of, stopped quoting the actual tonnages, the outputs of those, is really because of our ongoing relationship with Shin-Etsu. They’ve asked us not to actually publish individual volumes at this stage because of obviously their relationship with China’s producers at this stage. Yes, we can produce the whole spectrum; small amount of europium, but otherwise the full spectrum.

To access the rest of this interview, click here.

Disclaimer: Alkane Resources is an advertorial member of InvestorIntel.


Jack Lifton

Editor:

Jack Lifton is the CEO for Jack Lifton, LLC and is a consultant, author, and lecturer on the market fundamentals of technology metals. Technology metals ... <Read more about Jack Lifton>


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Comments

  • Metallurgist

    Complex mineralogy, no beneficiation, high CAPEX translates into 2-3 years from production at any point in time.

    September 8, 2014 - 8:24 PM

  • freethinking

    I like Alkane and Ian Chalmers is very capable and highly regarded, and there is no doubt they have a promising project.

    The fact is however their production timelines (for what ever reason) have been repeatedly pushed back – a review of past presentations reveals this fact.

    September 8, 2014 - 10:12 PM

  • Metallurgist

    Freethinking, start thinking free. The key to rare earth projects is mineralogy. Complex mineralogy translates into complex process. Alkane is a perfect example. Eudialyte they have is secondary and highly weathered.

    September 8, 2014 - 10:22 PM

  • JACK LIFTON

    Gentlemen,

    As you all know I am the first to point to highlight missed deadlines as a no-no for those who wish to be or to remain suppliers in good standing with Global1000 corporations.
    In the case of Alkane my enthusiasm is underpinned by the committment of Shin-Etsu to the rare earth part of the project. Although less well known here in North America than Hitachi there is no question in the rare earth permanent magnet world that Shin-Etsu isd a top tier player. The fact that Shin-Etsu analyzed the market and decided to support Alkane indicates to me that Shin-Etsu has taken into account the (common among juniorts) failure to perform to deadlines of Alkane and still has chosen it as a vendor. This means that Shin-Etsu has set aside precious SX separation capacity for Alkane’s materials. This means to me that Shin-Etsu has judged that Alkane’s current deadlines for production will be met. Alkane has the unique benefit of its rare earths being processed downstream by an end-user. it, Alkane, will not therefore have to go through the years of submitting samples of separated high purity prodcuts and blends to this customer and then the further wait for PPAP, test quantiites, test orders, and so forth. The only problem I foresee for Alkane is that it fails to deliver on time and creates the opportunity for another mixed concentrate supplier takes its place. Alkane cannot afford to miss this deadline, I hope also that Alkane negotiated a good price or price mechnaism with Shin-Etsu.

    Jack

    September 8, 2014 - 10:32 PM

  • Aat Oskam

    What Ian Chalmers s not mentioning aloud (not to irritate governmental institutions) is the fact that the proces of granting a mining permission for DZP by the state of NSW is (to say it gently) not very fast. If the permission arrives, the financing of the project will be finalized soon thereafter. Than the biggest hurdle will be taken and will allow Alkane to meet their timetable.

    September 9, 2014 - 1:23 PM

  • Metallurgist

    The basis of the conclusion is that one billion dollar is just a formality for such a straight forward multi-metallic project!

    September 9, 2014 - 9:30 PM

  • Aat Oskam

    VB, take a look at the interviews with Ian Chalmers on video, read the positive articles, listen to the audio interviews,. (e.g. http://www.theajmonline.com.au/ajm-jf-p24-25alkane-looks-to-export.pdf) and trust mr. Chalmers, a very credible and honest man, and his team. Shin Etsu has done an in-depth due dilligence and has chosen Alkane Resources, what more proof do you want? Moreover, mr. Chalmers could not mention a similar multi commodity junior / company like Alkene will be in 2016/2017, and he should know! Why the negative attitude?

    September 10, 2014 - 4:45 PM

  • Investor

    The fact that Shin Etsu did a due diligence and chosen Alkane does not mean much. They just want to be part of it if the Alkane story takes off. If not, they will be first to change ship and deal with any other supplier out there. With the actual start-up date being a moving target think twice if they will be reserving their capacity and waiting on the Alkane.

    September 10, 2014 - 9:58 PM

  • Aat Oskam

    Investor, to which (operational) supplier will they turn to? There’s not much choice imo.

    September 11, 2014 - 3:54 AM

  • Aat Oskam

    Besides the Chinese that is.

    September 11, 2014 - 3:55 AM

  • Ian Chalmers

    As I’ve said in the past, I don’t comment on blogs unless I see a factual error. In this case Metallurgist said “Eudialyte they have is secondary and highly weathered” and this is not correct. The Toongi deposit mineralogy is a eudialyte/armstrongite like hydrous zirconium silicate (+Hf, Y, HREE); natroniobite (Nb, Na, Ta oxide) and bastnasite (LREE phosphate). The deposit outcrops as hill, there is minimal oxidation (certainly not highly weathered) and the minerals are primary at the surface. The minerals are readily soluble in sulfuric acid and that forms the basis of the commercial flowsheet we have developed over many years. This flowhsheet has been proved by the operation of the demonstration pilot plant since 2008
    Yes, the project has taken some time to come together but this enabled us to largely derisk it and produce a suite of value added products to ensure a substantial revenue stream not based on one metal output.
    I certainly agree that A$1B is a substantial requirement but we are working with a very good project finance bank (SMBC) to put it all together.

    September 11, 2014 - 9:01 PM

    • Tracy Weslosky

      Thank you graciously Ian for commenting on InvestorIntel, it is a privilege to have your knowledgeable input. In fact, this is exactly what our forum is for when used properly — an information exchange so that we may be debating, clarifying and educating each other on what is undeniably a complex topic. I applaud those that are trying to understand this better, and again — would like to say thank you for your input Ian. I found the fact that these minerals are primary at the surface is unquestionably a real positive to the overall economics of the project.

      September 13, 2014 - 3:51 PM

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