Is American Rare Earths sitting on the largest rare earth deposit in the USA?

Commodities these days can be a bit of a fickle investment. They are definitely in demand for numerous reasons, including the world’s move towards a lower carbon future. Putin’s attack of Ukraine has placed further emphasis on security of supply, overall supply chains and the politics of commodities. However, we can’t seem to align all the interested parties into coming up with a cohesive game plan to maximize the production of critical commodities, while optimizing their environmental and social impact.

What do I mean by this? In late February the White House ordered action across the US Federal Government to secure reliable and sustainable supplies of critical minerals and materials just before the first anniversary of Executive Order (EO) 14017, America’s Supply Chains. However, a year after detailed reports of vulnerabilities in the critical mineral and material supply chains were produced by US federal agencies, detailing the over-reliance of the U.S. on foreign sources and adversarial nations for critical minerals and materials, posing national and economic security threats, the U.S. government isn’t exactly walking the walk. In the last year, we’ve seen Rio Tinto’s (NYSE: RIO) Resolution copper project in Arizona and Antofagasta’s (LSE: ANTO) Twin Metals project (copper/nickel) in Minnesota both get the red light from the Biden Administration. It has also taken steps to slow down development of a lithium mine in Nevada from ioneer Ltd. (ASX: INR) to help preserve a rare flower. You could also include Northern Dynasty Minerals Ltd.’s (TSX: NDM | NYSE American: NAK) Pebble mine in Alaska in this list because there is a lot of copper as part of the resource, but to me, it’s more of a gold mine so not necessarily critical.

I’m not saying that these actions to delay or cancel projects aren’t justified for environmental and social reasons. I’m simply pointing out that it’s easier said than done. Investors can’t simply pick all the companies pursuing critical minerals in the U.S. and think it’s going to be a slam dunk. Certainly, there is a renewed focus on addressing the critical minerals and materials supply chain, but it likely won’t come at the expense of the neighbors of these projects. That’s why one has to look a little deeper at any potential investments to ensure the project has a chance to see the light of day. You can’t just have a viable, economic resource, you need to tick a lot more boxes.

That’s my long-winded intro to an Australian listed company with assets in the growing rare earths sector of the United States, looking to help the U.S. diversify away from China’s market dominance of the global rare earth market. American Rare Earths Limited’s (ASX: ARR | OTCQB: ARRNF) mission is to supply critical materials for renewable energy, green tech, EVs, National Security, and a Carbon-Reduced Future. The Company owns 100% of the world-class La Paz Rare-Earth Project, located 200 km northwest of Phoenix, Arizona and the Halleck Creek rare earth project in Wyoming, USA. La Paz is a large tonnage, bulk deposit, that is potentially the largest rare earth deposit in the USA and benefits from containing exceptionally low penalty elements such as radioactive thorium and uranium. The Company is currently drilling in the new Southwest Zone of the project where an exploration target of approximately 742 – 928 million tonnes could be added to the 170.6 million tonne JORC compliant (Australian equivalent of NI 43-101) resource.

The size and the grades at La Paz are impressive, as well as close to surface, but remember it’s not just about an economic resource. The reason I think American Rare Earths should be on an investor’s watchlist, if you have any interest in the rare earths space, is their attention to politics. On March 4th the Company announced it had welcomed a delegation of elected officials from all levels of government to its flagship La Paz project. Key members of the group of 25 federal, state and county officials and staff delivered enthusiastic and encouraging speeches about American Rare Earths and its work underway to help secure the United States’ domestic critical minerals supply chain. Additionally, Company executive Marty Weems will speak to several dozen State Legislators about La Paz at an event held in collaboration with the Arizona Mining Association. That’s the type of proactive effort required to get your project to the finish line in the world of today.

From a macro perspective, there are significant tailwinds for domestic rare earths production from both a market pull and a government push. Additionally, there are several near-term catalysts for American Rare Earths with an on-going drill program at both properties and applications have been filed for 36 additional drill sites at La Paz. The Company is well funded, finishing 2021 with over A$8 million plus having raised another A$1.4 million in the first two months of 2022. With a market cap of roughly A$161 million (US$ 117 million) it’s not your typical junior mining stock, but then again, your typical junior mining stock isn’t sitting on potentially the largest rare earth deposit in the USA.

Marty Weems on how American Rare Earths is focused on becoming a NA Rare Earths Producer

In a recent InvestorIntel interview, Chris Thompson spoke with American Rare Earths Limited’s (ASX: ARR | OTCQB: ARRNF) President – North America, Marty Weems, about the positive field assay results from the La Paz Project in Arizona. Marty highlights how American Rare Earths’ La Paz Project is on track to become a North American rare earths producer.

In this interview, which may also be viewed on the InvestorIntel YouTube channel (click here to subscribe), Marty comments on the United States government’s push to develop a rare earths supply chain outside of China. With rising demand for electric vehicles, wind turbines and defense applications, Marty highlights how the American Rare Earths’ La Paz Project already has a 170.6 million ton JORC compliant resource and provides an update on the new Southwest Zone.

To watch the full interview, click here

About American Rare Earths Limited

American Rare Earths Limited is an Australian company listed on the ASX with assets in the growing rare earth metals sector of the United States of America, itself emerging as an alternative international supply chain to China’s market dominance of a global rare earth market expected to expand to US$20 billion by the mid-2020s. The Company’s mission is to supply Critical Materials for Renewable Energy, Green Tech, Electric Vehicles, National Security, and a Carbon-Reduced Future. Western Rare Earths (WRE) is the wholly owned US subsidiary of the Company. ARR owns 100% of the world-class La Paz rare-earth Project, located 170km northwest of Phoenix, Arizona. As a large tonnage, bulk deposit, La Paz is potentially the largest, rare-earth deposit in the USA and benefits from containing exceptionally low penalty elements such as radioactive thorium and uranium. ARR plans to deliver its first Preliminary Economic Assessment for La Paz by 2022 and is working with leading USA research institutions. La Paz’s mineral profile is incorporated into emerging US advanced rare earth processing technologies. In early February 2022, the Company commenced further drilling at the La Paz project to explore lateral and vertical extent in the new southwest area. Approximately 742 – 928 million tonnes of Rare Earths mineralized rocks are identified as an exploration target in the La Paz Rare Earths project’s Southwest area with an average TREO Grade of 350 – 400ppm and Scandium Oxide grade of 20 – 24.5ppm. The new exploration Target is additive to the La Paz Rare Earth project recently upgraded 170MT Resource. in the first half of 2021, In June 2021, ARR acquired the USA REE asset, the Halleck Creek Project in Wyoming. With permits in hand, the maiden exploration drilling program commenced in March 2022 and will provide initial mineralization, lithology and fresh rock core material for metallurgical and process testing. Approximately 308 to 385 million tonnes of rare earths mineralized rocks were identified as an exploration target for the Halleck Creek project area with an average Total Rare Earth Oxide (TREO) grade of 2,330 – 2,912 ppm. Initial surface sampling of the Overton Mountain area conducted in 2018 revealed average TREO values of 3,297 ppm, average Heavy Rare Earth Oxide (HREO) values of 244 ppm, and average Magnetic Rare Earth Oxide (MREO) values of 816 ppm.

To know more about American Rare Earths Limited, click here

Disclaimer: American Rare Earths Limited is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

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Spotlight on American Rare Earths as new Bill forces defense contractors to stop buying rare earth enabled products from China

On January 15, 2022 it was reported by Reuters that a new bill was introduced in the US Senate that would force defense contractors to stop buying rare earth enabled products from China by 2026 and use the Pentagon’s Defense Logistics Agency, DLA, to create a permanent stockpile of rare earth minerals. The U.S has only one producing rare earths mine at Mountain Pass, California, run by MP Materials, and currently has no capability to process rare earth minerals downstream of the mine. If passed, the new bill would help support the U.S goal of developing a more local and secure supply of rare earths, in the USA.

Today’s company has not one, not two, but three USA located rare earth projects. Its flagship Arizona rare earths project contains light rare earths. Light rare earths include the valuable magnet metals praseodymium and neodymium, as well as scandium.

American Rare Earths Limited 3 USA rare earths projects – location map

Source: Company presentation

American Rare Earths Limited (ASX: ARR | OTCQB: ARRNF) is focused on developing its 100% owned La Paz Scandium and Rare Earths Project in Arizona, USA. The Project was acquired in August 2019 with an existing NI 43-101 Resource. The Project lies about 170km northwest of Phoenix.

The Company states: “La Paz is a large tonnage, bulk deposit comprising high value, light rare earth (LREE) assemblage with the potential to be the largest rare earth project in North America…..contains very low penalty elements such as radioactive thorium and uranium.” They further comment: “The results show an increase in grades of certain high-value Rare Earth elements, including magnetic and heavy Rare Earths used in numerous technologies such as Electric Vehicles (EVs), wind turbines, air conditioners/refrigeration, phones, and critical national defense industry tech.”

The La Paz Scandium and Rare Earths Project

La Paz covers over 890 hectares with mining claims on federally controlled land and a prospecting permit over one section of Arizona State Trust land (259 hectares). The claims are unencumbered and 100% controlled by La Paz Rare Earth LLC (100% owned subsidiary of American Rare Earths Limited). The Project benefits from excellent local infrastructure including electricity, water,and gas; and is in a mining friendly jurisdiction.

The JORC 2012 classified Resource Estimate as announced in August 2021 at La Paz is 170.6 million tons of Total Rare Earth Elements (TREE) at an average grade of 391ppm. The Indicated Resource Estimate is 35.2 million tonnes. The Resource estimation report demonstrates approximately 66.6 million kilograms TREE, approximately 80.0 million kilograms TREO, plus 4.4 million kilograms of Scandium Oxide (Sc2O3).

The Resource displays relatively uniform distribution of total rare earth elements (TRRE) across and along strike, covering a resource area of 2.5km by 1.5km (La Paz Resource only). The entire deposit is exposed at surface, or lightly concealed by alluvial cover.

The Company recently stated (re La Paz): “What is also exciting are the higher grades intersected in the La Paz resource area of up to four times the depth of the previous maiden resource, with mineralization remaining open at depth and along the strike, indicating the potential for a much larger deposit.

The Company also reported a new potential resource in the Southwest area of the La Paz Project where one diamond core hole terminated in mineralization material below 75 metres. New claims are being staked in the area.

La Paz Project highlights and showing the La Paz Resource area and the new discovery Southwest Resource area <4km away

Source: Company presentation

Other projects

American Rare Earths Limited has also recently acquired two other USA rare earth projects – The Searchlight Rare Earths Project in Nevada and the Halleck Creek Project in Wyoming. The Company also has exposure to cobalt via its strategic investment in Cobalt Blue Holdings (ASX: COB), which owns the Broken Hill Cobalt Project in Australia.

Catalysts in 2022

  • La Paz drilling contractor appointed and to commence work in January 2022.
  • Field exploration work continues at Halleck Creek with the Maiden Drill program planned for
    Q1 2022.
  • Results from working with USA research institutions with La Paz’s mineral profile incorporated into emerging US advanced rare earth processing technologies.
  • Preliminary Economic Assessment (PEA) for La Paz by the end of 2022.

American Rare Earths Managing Director and Chief Executive Officer, Chris Gibbs, stated in December 2021: Timing could not be better with the recent Capital raising efforts and obtaining the permits to commence drilling at our key projects. The opportunity to bring Fidelity onto the register means we can accelerate the planned scope of works and unlock value sooner.”

American Rare Earths Limited highlights

Source: Company presentation

Closing remarks

American Rare Earths Limited offers investors exposure to three USA rare earths projects, including the flagship La Paz Scandium and Rare Earths Project in Arizona.

With rare earths demand set to surge this decade as we switch to green energy and transportation, it is worthwhile looking at what companies can be the next suppliers of rare earths, especially in the USA.

American Rare Earths Limited has recently raised A$5.7 million after fees with Fidelity International initially taking an equity interest of approximately 9.9%. The current market cap is A$110 million. One to follow in 2022, especially with the current drilling at La Paz and Q1 2022 drilling at Halleck Creek. Stay tuned.