Welcome to the latest Technology Metals Report (TMR), where we highlight the Top 10 news stories that members of the Critical Minerals Institute (CMI) have forwarded to us over the last 2 weeks.

In early 2024, the rare earths sector is witnessing significant strategic movements amidst a backdrop of declining prices and geopolitical tensions. Lynas Rare Earths Ltd. and MP Materials Corp., key players outside China, are rumored to be considering a mega-merger in response to falling rare earth prices and to mitigate the impact of Chinese trade restrictions. This potential consolidation aims to strengthen their production capabilities and align with the Australian and US governments’ efforts to reduce reliance on Chinese supplies, particularly for defense applications.

CMI’s Jack Lifton comments, “In the swirling rumors of a mega-merger between MP Materials and Lynas Rare Earths, it’s clear that the OEM industry’s disdain for single sourcing of critical materials is being overlooked. Litinski is eager to deploy his capital before it devalues, while Lacaze eyes a boost in share price ahead of her retirement. This scenario is akin to two veterans of the trade, unadorned and stark, facing the harsh daylight. Both MP and Lynas are in a precarious position, each with a singular customer and seemingly devoid of new strategies to navigate the market’s tumultuous waters.”

Concurrently, the industry is adjusting to market corrections, as highlighted by the Critical Minerals Institute’s observations on the electric vehicle (EV) materials market, indicating a shift towards efficiency and cost management. Meanwhile, initiatives like Controlled Thermal Resources Holdings Inc.’s funding quest for its lithium brine project and Appia Rare Earths & Uranium Corp.‘s (CSE: API | OTCQX: APAAF) exploration successes underscore the ongoing diversification and expansion within the critical minerals domain. These developments reflect a broader industry trend towards securing resilient supply chains for critical minerals amidst fluctuating market dynamics and geopolitical pressures.

Also breaking news today, Tesla Inc.: The EV maker is recalling 2.2 million vehicles, or nearly all of its electric vehicles in the United States, due to incorrect font size on warning lights, which increases the risk of a crash, the National Highway Traffic Safety Administration (NHTSA) said. This is more than the 2.03 million vehicles it recalled in the United States two months back, its biggest-ever such move at the time, to install new safeguards in its Autopilot advanced driver-assistance system. The latest recall includes vehicles across Tesla’s various models, including the Model S, Model X, 2017-2023 Model 3, Model Y, and 2024 Cybertruck vehicles, the NHTSA said. Separately, U.S. safety regulators said they have upgraded their probe into Tesla vehicles over power steering loss to an engineering analysis – a required step before they could potentially demand a recall.

Lynas linked to rare earths mega-merger as price falls bite (February 2, 2024, Source) —  Amid a sharp decline in rare earths prices and concerns over Chinese trade restrictions, there are speculations that Lynas Rare Earths Ltd. (ASX: LYC) may be considering a merger with its New York-listed rival, MP Materials Corp. (NYSE: MP). Industry insiders suggest that the two companies, both leading non-China producers of essential rare earth materials used in defense and various industries, could be in talks to create a mega-merger. The exact details of the deal are unclear, given the current slump in rare earth prices and Western concerns about China’s dominant position in the supply chain. However, a potential merger between Lynas, based in Western Australia and Malaysia, and MP, operating in California’s Mountain Pass, aligns with efforts by the Australian and US governments to strengthen collaboration between their resource companies for critical minerals extraction and processing, reducing dependency on China. Both Lynas and MP have suffered significant stock price declines, and a merger could help them bolster production capabilities and meet growing demands, particularly from the US Department of Defense, which aims to reduce reliance on Chinese supplies. Referral, CMI Co-Chairman Jack Lifton

Critical Minerals “rightsizing” in reaction to governments’ efforts to regulate market (February 1, 2024, Source) — The critical minerals industry is undergoing significant changes in the electric vehicle (EV) materials market. Jack Lifton, Co-Chairman of the Critical Minerals Institute (CMI), views recent price declines in key EV component materials as a natural market correction rather than a disaster, emphasizing minimal regulatory intervention. Declining profits for industry leaders, including China Northern Rare Earth, result from overestimated EV demand, economic factors, and falling sales, especially in California. Lifton advises investors to focus on efficient, low-cost producers, particularly in neodymium. The January 2024 CMI Report notes the U.S. government’s plan to ban Pentagon battery purchases from major Chinese companies and hints at potential recovery in lithium prices. Lynas Rare Earths’ revenue drop reflects market trends but also strategic capacity expansion. In summary, the industry faces short-term challenges but underscores the importance of efficiency, cost management, and adaptability for long-term success. Source, Investor.News

GM, Stellantis-Backed Lithium Startup Seeks More Than $1 Billion for Brine Project (February 1, 2024, Source) — Controlled Thermal Resources Holdings Inc., (CTR) a US lithium startup backed by Stellantis N.V. (NYSE: STLA) and General Motors (NYSE: GM), seeks over $1 billion in funding for its California lithium brine project. This initiative defies the industry’s 80% drop in lithium prices since late 2022. CTR’s unconventional approach focuses on geothermal brine deposits, seen as a potential future lithium supply source once technology challenges are overcome. This aligns with US government efforts to establish a domestic EV commodity supply chain. The funding plan includes equity and debt financing, with Goldman Sachs as the lead bank. Stellantis and GM have previously invested significantly in CTR to secure lithium for EV production. Referral, CMI Co-Chairman Jack Lifton

Attention set on rare earths in Canada and Brazil, Appia hits 2024 running (January 31, 2024, Source) —  Appia Rare Earths & Uranium Corp. (CSE: API | OTCQX: APAAF) is focusing on its rare earths projects in Canada and Brazil: the Alces Lake Project and the PCH Ionic Clay Project. The Alces Lake Project in Canada is recognized for its high-grade rare earths and gallium in monazite ore. Recent drill results have shown up to 1.57 wt.% Total Rare Earth Oxides (TREO) with mineralization extending to a depth of < 85 meters. In Brazil, the PCH Project offers a simplified extraction process for rare earths essential for electric motor magnets in most EVs. Hole RC-063 reported a total weighted average of 3.87% TREO. Appia’s expansion of mining claims and plans for a Maiden Resource in Q1, 2024, signal their commitment to these projects, with a market cap of C$27 million suggesting a potentially significant year ahead in 2024. Source, Investor.News

China EVs: lithium producers Ganfeng, Tianqi issue profit warnings, blame price plunge for battery material as stocks sink (January 31, 2024, Source) —  Chinese lithium producers Ganfeng Lithium and Tianqi Lithium have issued profit warnings, attributing their declining profits to a significant drop in lithium prices. Ganfeng expects its 2023 net profit to plummet by 70-80% to between 4.2 billion yuan and 6.2 billion yuan. After accounting for non-recurring items, net profit will range from 2.3 billion yuan to 3.4 billion yuan, down 83-88.5% from 2022 levels. Tianqi anticipates a net profit decline of 62.9-72.6% to 6.62 billion yuan – 8.95 billion yuan. Both companies attribute their struggles to the cyclical nature of the lithium industry and declining lithium prices. The average price of China-produced lithium hydroxide exported to South Korea fell by 45% last month. While electric vehicle sales are still growing, the rate has slowed, impacting lithium demand. However, global lithium demand is expected to rise by 27% this year, with a surplus expected before a deficit in 2026. Referral, CMI Co-Chairman Jack Lifton

Mining analyst-turned-Vital Metals CEO eyes much larger Nechalacho reboot (January 29, 2024, Source) —  Geordie Mark, CEO of Vital Metals Limited (ASX: VML), aims to revamp the Nechalacho rare earths project in the Northwest Territories, leveraging 15 years of experience as a mining analyst. Recognizing the growing demand for rare earth elements in the technology and electric vehicle (EV) markets, Mark plans to shift Vital’s strategy towards a bulk tonnage operation targeting lighter rare earths like praseodymium and neodymium. This comes after the failure of the company’s processing division and a Chinese investment lifeline in 2023. A comprehensive scoping study is crucial for long-term viability, and Mark expects demand for praseodymium and neodymium to rise significantly in the next decade, particularly in China and Europe. Shenghe Resources’ investment provides vital capital for Nechalacho’s development, positioning it to compete with North America’s only rare earths mine, MP Materials Corp.’s (NYSE: MP) Mountain Pass operation. Referral, CMI Co-Chairman Jack Lifton

The Critical Minerals Institute Report (01.25.2024): U.S. government bans Pentagon battery purchases from major Chinese companies starting October 2027 (January 25, 2024, Source) —  The January 2024 Critical Minerals Institute (CMI) report highlighted key economic and geopolitical developments. U.S. inflation in December 2023 impacted interest rate reduction plans, while the S&P 500 rose by 2.04% year-to-date. China’s economy slowed, with falling home prices, and global tensions persisted. In the global electric vehicle (EV) market, December 2023 set a record for plugin electric car sales, led by China. However, the EV sector’s growth rate slowed compared to previous years. The U.S. reported a surge in EV sales and enacted Zero Emission Vehicle mandates to boost adoption. In the EV battery sector, the U.S. government announced a ban on Pentagon battery purchases from major Chinese companies, starting October 2027. Challenges in the critical minerals sector included depressed prices due to oversupply and slowing EV market growth. Recovery in lithium prices was anticipated in late Q1 or early Q2 2024. The report emphasized a negative supply response from producers and expected a potential recovery in the second half of 2024, assuming reasonable EV sales growth. Source, Investor.News

Tesla Projects Slower Growth in 2024 as EV Demand Softens (January 24, 2024, Source) — Tesla Inc. (NASDAQ: TSLA) anticipates slower growth in 2024 amid a challenging landscape for the electric vehicle (EV) industry. CEO Elon Musk desires greater control, aiming for a 25% ownership stake to deter activist shareholders. This follows Musk’s ultimatum to shift focus to AI and robotics if control isn’t achieved. Tesla faces declining demand, shrinking profit margins, heightened competition, and recent price cuts. Despite doubling fourth-quarter net income to $7.9 billion, costs for projects like the Cybertruck and AI research impact profitability. Tesla’s valuation, historically tied to sales and Musk’s vision, faces uncertainty. Challenges include Hertz selling EVs and Chinese automakers overtaking Tesla. EV enthusiasm wanes due to pricing, charging concerns, and range limitations. Tesla plans cost reduction for future vehicles but encounters short-term cost pressures. Despite this, strong Cybertruck demand is expected, with production scaling up gradually. Referral, CMI Director, Alastair Neill

Rare-earths miner Lynas’ Q2 revenue halves on falling prices, lower China demand (January 24, 2024, Source) —  Australia’s Lynas Rare Earths reported a significant drop in its second-quarter revenue, falling by 51.7% to A$112.5 million due to plummeting rare earth prices and reduced demand in China, particularly in the appliance sector amid a construction slowdown. This decline in revenue, which missed analysts’ forecasts, led to a 30-month low in its share prices. Despite this downturn, Lynas has continued to expand its operations, including the near-completion of its Kalgoorlie processing plant in Australia, upgrades to its Malaysian facilities, and ongoing work at the Mt Weld mine. The company, a major supplier outside China, has also been working on a new facility in Texas to serve the U.S. Department of Defense. Despite these efforts, Lynas’ challenges are compounded by the lower average selling price of its products, which has more than halved compared to last year. Referral, CMI Director, Russell Fryer

Investors turn to copper, gold and uranium amid battery metals rout (January 24, 2024, Source) — In 2024, investors are shifting their focus away from battery metals, such as nickel and lithium, due to significant price declines. Instead, they are turning to commodities like copper, gold, and uranium. Copper prices have rebounded following supply shortages and disruptions in production by key global producers. Gold is experiencing renewed interest, driven by geopolitical crises and a weakening US dollar, with forecasts predicting it to trade above $2,000 per ounce in the coming year. Uranium has gained substantial momentum, reaching decade-high prices, driven by limited supply and increased demand for nuclear energy in Western countries. Investors are diversifying their portfolios, seeking better prospects in these alternative commodities. Referral, CMI Director, Russell Fryer

China, in comic strip, warns of ‘overseas’ threats to its rare earths (January 22, 2024, Source) —  China’s State Security Ministry released a comic strip on social media, depicting foreign threats to its rare earth resources. The narrative shows security officers uncovering covert operations by foreign-looking characters, suggesting overseas interest in China’s strategic minerals. China, the leading producer of rare earths essential for high-tech industries, has imposed export restrictions on these elements and related technologies, citing national security. The move has heightened tensions, particularly with the United States, amidst accusations of economic coercion. The comic underscores the importance of safeguarding these resources against international competition and espionage. The state-controlled Global Times highlighted the story, reflecting on the global race for rare earths, vital in military, consumer electronics, and renewable energy sectors, as a national security issue. Referral, CMI Director, Alastair Neill

Tanzanian, Canadian firms to search for rare metal (January 22, 2024, Source) — Tanzanian firm Memnon Project Management Services Company Limited and Canadian company Anibesa Energy Metals Corp. are set to collaborate in prospecting for niobium in Mbozi District, Songwe Region, with an anticipated investment of up to $50 million. They have obtained regulatory approvals and are finalizing the acquisition of three licenses for niobium minerals, while three more geologists are expected to join the exploration team. Memnon Project Management Services is involved in various projects, including the Kongwa Lithium Project and solar energy initiatives. Niobium, a rare metal, enhances the strength of alloys and is used in various industries, including aerospace and construction. As of 2022, Brazil held the largest niobium reserves globally. The partnership aligns with Tanzania’s goal of attracting international companies to boost the mining industry by focusing on valuable critical metals projects. Referral, CMI Director, Alastair Neill

Investor.News Critical Minerals Media Coverage:

• February 01, 2024 – Critical Minerals “rightsizing” in reaction to governments’ efforts to regulate market https://bit.ly/49f78zC
• January 31, 2024 – Attention set on rare earths in Canada and Brazil, Appia hits 2024 running https://bit.ly/3ueaxjg
• January 25, 2024 – The Critical Minerals Institute Report (01.25.2024): U.S. government bans Pentagon battery purchases from major Chinese companies starting October 2027 https://bit.ly/4961zU0
• January 22, 2024 – Unveiling Insights from Ecclestone on the Future of Mining and Investment from Riyadh’s Future Minerals Forum Event https://bit.ly/491pVOS

Critical Minerals IN8.Pro Member News Releases:

• February 2, 2024 – Appia Announces Plans for Drilling at the Loranger Uranium-Bearing Property, Saskatchewan, Canada https://bit.ly/3UphbOs
• February 1, 2024 – Obonga: Wishbone Exploration Permit Application https://bit.ly/3UlnFOj
• February 1, 2024 – First Phosphate to Provide Project Update to the Federation of Chambers of Commerce of the Saguenay-Lac-Saint-Jean Region of Quebec, Canada https://bit.ly/42ugvt1
• January 31, 2024 – Defense Metals Announces Closing of its $738,836 Non-Brokered Private Placement https://bit.ly/3umNv9S
• January 31, 2024 – First Phosphate Announces Launch of 25,000 m Drill Campaign at its Bégin-Lamarche Project https://bit.ly/3SmPtPD
• January 30, 2024 – Ucore Announces Closing of Debenture Offering https://bit.ly/3SHT1xa
• January 30, 2024 – Western Uranium & Vanadium Bolsters Mining Team to Scale-Up Uranium Production https://bit.ly/47UTIHZ
• January 30, 2024 – F3 Hits 2.05m Off Scale >65,535 CPS in First Hole of Winter Program at JR Zone https://bit.ly/3SCxru9
• January 29, 2024 – First Phosphate Confirms Two Additional New High-Grade Discoveries at Begin-Lamarche Property and up to 39.45% P2O5 at Larouche https://bit.ly/3OlGWew
• January 29, 2024 – American Rare Earths Quarterly Activities Report for the Period Ending 31 December 2023 https://bit.ly/3SBQQeM
• January 29, 2024 – Australian Strategic Materials Quarterly Activities Report to 31 December 2023 https://bit.ly/3UdGXVK
• January 26, 2024 – Appia Rare Earths & Uranium Corp. Announces New Cooperation Agreement with the Ya’thi Néné Lands and Resources Office https://bit.ly/3Oke4TU
• January 25, 2024 – First Phosphate, American Battery Factory and Integrals Power Sign MOU to Produce LFP Cathode Active Material and Battery Cells in North America https://bit.ly/48MnCiU
• January 23, 2024 – F3 Announces Commencement of Drilling at PLN https://bit.ly/3Uc6COo
• January 23, 2024 – Power Nickel Announces Filing of Amended Technical Report https://bit.ly/3HvYPUd
• January 23, 2024 – First Phosphate Corp. Welcomes the Addition of Apatite (Phosphate) to the Critical and Strategic Minerals List of Quebec, Canada https://bit.ly/48Pv7Wf
• January 22, 2024 – First Phosphate Announces Closing of the Third and Final Tranche of Oversubscribed Private Placement Financing for Total Gross Proceeds of $8.2 Million https://bit.ly/3U5Vl2l
• January 22, 2024 – Elcora Develops Innovative Process To Extract Vanadium From Its Moroccan Vanadinite Deposit https://bit.ly/3Hu8Zon
• January 22, 2024 – American Rare Earths Announces Breakthrough Metallurgical Results https://bit.ly/3O96trp
• January 22, 2024 – F3 Expands PLN Project with Acquisition of PW Property from CanAlaska https://bit.ly/3vKBMTb

Karora Resources is growing to become the next 200,000 ounce gold producer

Gold had a good year in 2023 up 15% and is currently trading at US$2,028/ounce. The gold sector looks like it will have a strong 2024 as the macro backdrop for gold improves. Here are four reasons why:

1. A series of three interest rate cuts in the USA is forecast for 2024, which may also lead to a weaker U.S. dollar (“USD”). Lower rates and a lower USD are good for the gold price.
2. Growing geopolitical uncertainty – The Ukraine-Russia war continues, the Israel-Hamas war may spread to nearby Middle East regions as we saw recently with the U.S. response to the Red Sea shipping attacks by Houthis against Israeli ships, etc.
3. The U.S. Presidential election on November 5, 2024. Any instability as we saw after Trump lost the last election may result in a flight to safe assets.
4. According to Sprott Research – “Gold mining stock valuations are the lowest in 25 years”.

For those investors looking at a growing mid tier gold miner that keeps on delivering on their promises then today’s company will be right up your alley.

Karora Resources Inc.

Karora Resources Inc. (TSX: KRR | OTCQX: KRRGF) (“Karora”) is a Canadian gold mining company with growing gold operations ~60 kms from Kalgoorlie, in Western Australia. Karora’s 100% owned assets include several gold mines (Beta Hunt underground Mine, Higginsville Gold Operations (“HGO”), Spargos Gold Mine), and their two gold mills (Higginsville Mill, Lakewood Mill). Karora produced 160,492 gold ounces in 2023 and has their next major target set at 200,000 ounces pa.

Karora’s consolidated contained gold resource across all operations is M&I Resource of 3.189m Oz @ 2.0 g/t Au and an Inferred Resource of 1.538m Oz @ 2.4g/t Au.

Location map showing Karora Resources 1,900 sq. km of tenements, 3 key gold mines, and 2 Mills

Source: Karora Resources company presentation

Karora Resources under promises and over delivers

As announced on January 15, 2024, Karora produced a record 160,492 ounces of gold for 2023 compared to their guidance range of 145,000 – 160,000 ounces. Karora Chairman & CEO, Paul Andre Hue, commented:

“I am extremely pleased to announce Karora’s seventh consecutive year of production growth. We produced a record 160,492 ounces of gold for 2023, exceeding 2022 production by over 26,000 ounces and beating the high end of our full year 2023 guidance range of 145,000 – 160,000 ounces. Gold production in the fourth quarter was a very strong 40,295 ounces, the second highest quarterly result on record.“

Seven consecutive years of production growth – Wow, that’s impressive.

The news only gets better from Karora as they are guiding to achieve 170,000-195,000 gold ounces in 2024 at a lower AISC of US$1,050 – 1,200/ounce.

Karora’s 2024 guidance, if achieved, would make them an almost 200,000 ounce pa gold producer

Source: Karora Resources overview

A key point to note from the chart above is point 2 – “The Company expects to fund the capital investment amounts listed above with cash on hand and cash flow from operations.” Karora currently has a very robust balance sheet with C$82.5 million in cash as of December 31, 2023.

Another key plus for Karora is that they are starting to increase their nickel by-product production. As this grows it helps Karora maintain or reduce their All In Sustaining Costs (“AISCs”).

Closing remarks

The macro set up for 2024 certainly looks very favorable for gold. If we get declining interest rates and a weaker USD, then the gold price is likely to move higher in USD terms. If global geopolitical tensions worsen then that will favor the safe haven of gold.

Karora Resources is a standout small gold miner growing steadily to becoming a mid-tier 200,000 ounce pa gold producer at a very reasonable AISC near US$1,000/ounce. Management continues to deliver results at or above expectations. Finally, sovereign risk is extremely low with Western Australia being a tier one mining jurisdiction.

Karora Resources trades on a market cap of C$771 million and a 2024 PE of 11.9.

Lynas Rare Earths Ltd. (ASX: LYC), the Australian mining giant, recently breathed a sigh of relief. Malaysia’s government granted the firm a pivotal extension on their operating license, allowing them to continue importing and processing raw materials laden with naturally occurring radioactive elements until March 2026.

Previously, Malaysia had stringent reservations due to radiation concerns stemming from the cracking and leaching procedures in processing these materials. The facility in Pahang, Malaysia, has been mired in controversies surrounding radioactive waste, specifically thorium, since 2012. Malaysia had gone to the extent of instructing Lynas to shift certain radioactive waste-producing operations out of the country, even enforcing a ban on imports of raw materials with these elements.

The game-changer was Lynas’s innovative proposal: a technology that could extract thorium not just from the raw materials but also from the accumulated waste. If Lynas can effectively commercialize this method, the waste can be rapidly disposed of, while the extracted thorium might find buyers in nuclear plants worldwide.

But why is this decision so monumental for Lynas?

For starters, had Lynas not been granted this extension, the company would be staring at a gaping hole in their supply chain. Their Kalgoorlie plant in Australia would not start processing any carbonate product until the next year, and ramping up to their nameplate capacity would take potentially another nine months. This scenario would have crippled their Malaysian production for nearly three-quarters of the year, slashing their annual output by half.

Historically, Lynas imported its monazite concentrate from Mount Weld in Australia. This concentrate would then journey to Malaysia, undergoing a sulfation bake. In simpler terms, it would be combined with sulfuric acid, processed in a kiln, and subsequently undergo a water leach and purification process. But one of the waste streams from this method, which contained higher radiation levels, proved problematic.

Lynas’s ambitious plans include expanding its Magnetic Materials (Neodymium and Praseodymium) production in Malaysia, a crucial component in various modern applications ranging from magnets in wind turbines to motors in electric vehicles. With expansion plans in the pipeline and a new facility in Texas, the extended operating license in Malaysia ensures that Lynas has a consistent supply to meet global demands.

The strategic decision by the Malaysian government underscores the importance of Lynas in the global rare earth industry. With news of other major players facing operational hiccups, the industry needed a win. And this decision, undoubtedly, is a significant one. It not only secures Lynas’s position but also sends a positive signal for the rare earth industry at large.

In essence, this development underscores a harmonizing synergy of economic ambitions and environmental prudence. While the decision spells robust business prospects for Lynas, it’s also a nod to Malaysia’s commitment to environmental sustainability. The future, it seems, is both green and bright for Lynas and rare earths.

Look online, and you will discover that while Lynas Rare Earths Ltd. (ASX: LYC) is covered by 9 research companies, it is impossible to find one PDF Equity Research Report online. For Australian-listed companies, sometimes they publish the reports on their website; unfortunately, not for Lynas.

Dig deeper online and you may see a headline about whether Lynas has too much debt… these conclusions are in my humble opinion quite wrong, and underestimate this rare earths’ ruler outside of China, Amanda Lacaze.

I ran my conclusions by a semi-retired analyst, who requested anonymity and wrote me back promptly in agreement: “Saw their balance sheet and they are running just over 1x debt: cash flow and their cash flow is strong based on growing sales and commodity prices.”

The media loves to tout Chinese control of rare earths, but it is a woman with an iron fist that rules the rare earths world. Proud of how she likes to watch the pennies, it is unquestionably the reason why she has held the role as a Non-Executive Director for ING Bank Australia Ltd. for over 11 years.

Now let’s start with some prenuptial notes on Lynas, before you decide to make a commitment to this industry giant.

Lynas Rare Earths Ltd. is listed on the Australian Securities Exchange (ASX: LYC). The company also has a sponsored Level 1 American Depository Receipt (ADR) program through the Bank of New York Mellon (Code: LYSDY). On June 6 (Australia), the shares closed at AUD$ 9.35. There 902.4 million shares outstanding, giving the company a market capitalization of approximately AUD$8.4 billion (US$6.1 billion. At December 31, 2021, Lynas reported six month results including AUD$741.7 million positive working capital (including AUD$674 of cash and short term deposits) and AUD$156 million long term debt. Cash and short term deposits increased to AUD$768.4 at March 31, 2022.

Lynas’ quarter ended March 31, 2022, had the following highlights:

• All necessary approvals received for the Kalgoorlie Rare Earth Processing Facility (Australia based processing facility)
• Site clearing of the Kalgoorlie facility location is complete
• Delivery of major equipment to Kalgoorlie site with foundation and building work underway
• Kalgoorlie should be on track as part of the company’s 2025 Foundation Project program
• Planning is underway for the US Rare Earths Processing Facility including contracts signed with the US Department of Defense
• Record quarter for operations including:
  • Sales revenue of AUD$ 327.2 million (AUD$ 202.7 million previous quarter)
  • Sales receipts of AUD$ 262 million (AUD$151 million previous quarter)
  • Total REO production of 4,945 tonnes (4,209 tonnes previous quarter)
  • NdPr production of 1,687 tonnes (1,359 tonnes previous quarter)
• Lynas noted quarterly price strength for NdPr contributed to record financial results
• Automotive demand for rare earths “remains strong”
• Exploration drilling under the existing Mt. Weld extraction pit revealed continuous rare earth element mineralization along 1,020 metres of drill core. Further targeted exploration is to be conducted “with the goal of meeting accelerating customer demand”.
• The company targets to be operating four sites in three countries with global sales in 2025

Having heard Amanda speak on several occasions in her early role as Managing Director nearly eight years ago, I recall believing that her reign would be short-lived. Her valiant commitment to the bottom line above all else seemed conservative and backward compared to the charismatic marketing styles of other leaders I quite like in the market. Commenting that weekly meetings would necessitate accountability for every dime spent, seemed dismal and droll to me, it seems, however, she was quite right.

As down winds from the recession are upon us, or gales of a correction are indeed in full force, I look to the critical materials sector for which many experts harbor no fears. And with the demand for rare earths continuing to exceed supply, it seems that the noble Australian woman whose fearless tactics took me by surprise is now the one championing it all.