The Private-Public Partnership of Rare Earths
Search-Minerals Inc (TSXV: SMY) is showing the industry how to enrol governments to help shoulder technological risks as it announced that it will receive research and development (“R&D“) funding totaling C$1,250,000 from the Research & Development Corporation Newfoundland and Labrador (“RDC“) and from the Atlantic Canada Opportunities Agency (“ACOA“) to assist in the construction and operation of a pilot plant for the testing of its metallurgical process. The total Project cost is approximately C$ 1,900,000: therefore the funding ratio is 65.8%, which is lower than the regulated 70% percent Canadian maximum.
In the hallways of academia this this is called a private-public partnership. These schemes are sometimes referred to as PPPs.
PPPs are necessary for speeding up the emergence of the rare earths industry, especially now as capital is tight.
In the rare earths industry there is a gap the size of the Grand Canyon between an exciting bench top flow sheet and a commercially feasible flow-sheet. This is a well-known problem to our readers who often comments on the inherent risks of new bench scale technologies. But to project promoters, the bench top flow sheet is a critical step to the cave of wonders. Alas, most often technology developers struggle with financial failure between bench scale and commercial ramp up.
Arguably the best approach to mitigate the risks associated with this often-fatal excursion across the Death Valley is to seek help from governments. But the announcement from Search Minerals implies a great deal of skills. I tip my hat to the management of Search Minerals for striking a partnership with both the federal and the provincial governments.
In innovation-favourable jurisdictions, governments establish non entitlement programs set up to help company support pushing their Technology Readiness Level from the bench scale to pre-commercial. Technology Readiness Levels (TRL) is an assessment scale of Critical Technology Elements (CTE) of development programs. TRL are based on a scale from 1 to 9 with 9 being the most mature technology. The use of TRLs enables consistent, uniform, discussions of technical maturity across different types of technology.
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All things being equal, in bull markets investors tend to favour investments in companies and/or technologies with high TRL, though people rarely say “Hey, what’s your TRL?” Instead of using academic lingo investors, our readers, know when a technology is proven and demand to see proof that it withstands scrutiny.
So why should anyone worry about TRLs?
Because that’s government speak. And the only way to ever secure government funding is to speak governmenteese, which obviously Search Minerals can do.
Search Minerals is a TSX Venture Exchange listed company focused on creating value through finding and developing “critical rare earth element (“CREE“)” mineral assets in Labrador. CREEs (Nd, Eu, Tb, Dy, Y) have growing demand, constrained or restricted supply and are commonly used in innovative technologies.
Search Minerals is the discoverer of the Port Hope Simpson CREE District, a highly prospective CREE belt located in southeast Labrador, where the Company controls a belt 70 km long and up to 8 km wide. It owns 100% of the advanced CREE resource called the Foxtrot Project (“Foxtrot“), and a recently announced Foxtrot-like prospect called “Deepwater Fox”. The primary focus of Search is to continue to advance the Foxtrot resource, while evaluating other Foxtrot-like prospects. Several of the Foxtrot-like prospects require exploration drilling programs and may provide additional resources to a central processing facility that would be situated within the District.
Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>