The blather in the media suggesting that China could or already be weaponizing the export of their “rare earths” to the rest of the world is so one-sided that it must make the Chinese wonder if non-Chinese “analysts” and “experts” ever bother to see the world from the perspective of “others.” For more than a decade China has been aggressively acquiring outright or buying the output of non-Chinese rare earth sources. At this point in time, China is the overwhelming buyer, worldwide, for example of the mineral monazite, which is produced primarily as a byproduct of the processing of heavy mineral sands, which are the source of zircon and ilmenite, source minerals for, respectively, zirconium and titanium.

We can speculate that China seeks heavy mineral sands for its world-dominating production of zirconium and titanium and that the rare earths are just an added extra attraction. But my survey of actual China experts, not those who’ve never been to China and work for “intelligence” gatherers and purveyors, tells me that China is focused on conserving its own rare earth resources and responding to internal pressure to clean up its massive rare earth industry’s pollution problems. We know that Baotou’s famous operations now include extracting rare earths from the massive tailings produced over the last 30 years of poor quality mining and that China Nuclear has been licensed to process up to 50,000 tons per year of monazite to recover up to 30,000 tons per year of total light rare earths while removing the uranium and thorium from the monazites, which typically contain up to 50% more of the desirable magnet precursors, neodymium and praseodymium, than Baotou’s (and MP Materials Corp.’s (NYSE: MP)) bastnaesite.

China has now also essentially shut down its domestic heavy rare earth production from its ionic adsorption clays due to environmental degradation from their in-situ processing. China gets the majority of its heavy rare earths from Myanmar ionic adsorption clays today. The production of the first Western ionic adsorption clay producers, in Burundi and Brazil, is already pre-sold to China.

Australia has the world’s first hard-rock heavy rare earth mineral mine, that of Northern Minerals Limited’s (ASX: NTU) xenotime deposit in Western Australia. It is controlled by Chinese interests.

China is doubling the size of its rare earth permanent magnet industry. It is said that this will happen by 2025.

This means that China needs more, much more of the magnet precursor rare earths and all of the heavy rare earths, in particular, that it controls.

It is the domestic Chinese market, the market of the Belt and Road countries, and the rest of the non-aligned with China world, in that order that is driving the Chinese rare earth markets with emphasis on value added in China.

When Western, Japanese, and Korean governments announce that they want to be independent of China for rare earth permanent magnet products, the Chinese simply calculate when, in the best and worst cases, they will no longer have demand for rare earth enabled products from those countries and focus on their key domestic and allied markets.

It is very unlikely that Western car and appliance makers will be able to replace any substantial quantity of Chinese sourced rare earth permanent magnet motors by any of the ridiculously short-sighted timelines dictated by government mandates. In fact, as is already happening in Europe, it is likely that Chinese EV makers will outcompete European car makers in their (European) home markets due to their cost and critical minerals availability advantages.

The United States is woefully unprepared for the EV transition. But the 25% Trump tariff on Chinese imported cars is helping stave off a Chinese tsunami in the US car market.

2030 is fast approaching, and it’s hard to see how the automotive and appliance industries are going to decouple from China.

Appia Rare Earths & Uranium Corp. (CSE: API | OTCQX: APAAF) (“Appia”) now has 4 rare earths/uranium projects globally. Today we take a look at Appia’s newly acquired PCH Project (agreement to acquire 70%) in Brazil and give an update on Appia’s Alces Lake rare earths Project in Northern Saskatchewan, Canada.

PCH Project (Brazil)

Appia announced in June 2023 that they had signed a Definitive Agreement to acquire up to a 70% interest in the PCH Project (subject to certain conditions). The PCH Project is 17,551 hectares in size and located within the Goiás State of Brazil. It is located ~30 km from Iporá, a medium size city of ~31,500 population, where infrastructure is well developed.

Sampling data shows enrichment in rare earth minerals from between 8 meters and 20 meters depth in ionic clay ore. Ionic adsorption clays are the main source of the critical rare earth permanent magnet metals, dysprosium and terbium. These projects are also rare outside of China.

Appia states:

“The positive results of the recent geochemical exploration work carried out to date indicates the potential for REEs and Niobium within lateritic ionic adsorption clays.“

Appia also states:

“Total REE grades in numerous auger holes drilled range up to 16,648 ppm (1.66%), with an average of 1,291 ppm total REE and importantly, the valuable rare earths used in magnet applications (Pr, Nd, Tb and Dy) + Y account for approximately 14% of total rare earths, with a maximum of 28.4%.“

The higher the valuable rare earths percentage the better. Appia state above 14% and in their latest presentation they state it as “an average value of 16.67%.“

This is a reasonable figure, especially when considering the shallow depth and the lower mining costs in Brazil. The deposit could potentially be mined with low-cost open pit mining techniques and processed using simple technologies.

Other key points of the PCH Project according to Appia are:

• “One of a few major ionic clay projects in the western world
• Easy to mine
• Simple processing
• Low radioactivity
• Low CapEx
• Low OpEx
• Environmentally friendly processing
• Near infrastructure
• Mining friendly jurisdiction
• Heavy and light critical rare earth.”

The PCH (ionic clay rare earths) Project in Brazil (Appia has an agreement to acquire 70%)

Source: Appia company presentation – June 2023

An update at Alces Lakes – Discovery of the new high-priority surface showing called the ‘Jesse Zone’

On June 22 Appia announced the completion of a NI43-101 Technical Report for their 100% owned Alces Lake Rare Earth Project in the Athabasca Basin, Saskatchewan, Canada. The Project is best known for having one of the highest rare earths grades (16.65 wt% TREO) globally of any project as well as being found in monazite ore which is amenable to processing.

Appia also gave a June 16 update on the Project stating:

“Early successes by our prospecting teams have led to the identification of a new high-priority surface showing called the ‘Jesse Zone’ which was discovered on the first day of field prospecting,” stated Stephen Burega, President. “The prospecting team have now identified anomalies along the regional shear zone with biotite-rich pegmatite showings of up to 21,000 cps (counts per second) and the zone appears to be +85m in strike length and +20 m in width at surface.”

The Jesse Zone is giving high scintillometer readings (measured in counts per second) which are a good pointer towards the monazite rich zones that hold the rare earth mineralization. The Appia team believes that the numerous surface showings may be connected under overburden. Detailed mapping and sampling continues at the Jesse Zone to confirm the full extent of this new zone.

Appia’s four projects description summary – Alces Lakes (Saskatchewan, Canada), Elliot Lake (Ontario, Canada), Loranger (Saskatchewan, Canada), and now the PCH Project (Brazil)

Source: Appia company presentation – June 2023

Closing remarks

Appia has now grown to own (including the 70% agreement to acquire the PCH Project) four significant rare earths/uranium projects globally. The very high grade Alces Lakes continues to be the flagship but now the new Brazil Project adds further to their portfolio. It also gives Appia a chance to significantly accelerate towards being a global rare earths producer at some point in the future.

Appia Rare Earths & Uranium trades on a market cap of only C$20 million.

Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) (“Energy Fuels”) has been going from strength to strength in 2023. As the leading US uranium producer, recent expansion to rare earths processing has made Energy Fuels a leading US supplier of critical minerals.

Energy Fuels produces uranium and vanadium from their White Mesa Mill in Utah, USA and since March 2022 the Company has also been active with rare earths separation and production of mixed rare earths carbonate containing 32%-34% NdPr. All of this has now started to flow through to revenues and profits for Energy Fuels in 2023.

Energy Fuels White Mesa Mill in Utah, USA and key critical minerals mined or processed

Source: Energy Fuels May 2023 company presentation

Energy Fuels Financial results – Q1, 2023 sees a return to profitability

As announced on March 8, 2023, Energy Fuels reported full-year 2022 positive sales revenue but a net loss of US$59.85 million. The loss was primarily due to additional expenses for various one-off items including costs from preparing four uranium mines for production, development expenses associated with developing commercial rare earth element separation capabilities, etc.

2023 has brought a new dawn for Energy Fuels with a rapid turnaround to become profitable.

As announced on May 5, 2023, Energy Fuels delivered a net profit of US$114.26 million. The profit was significantly boosted by the one-off sale of Energy Fuels’ Alta Mesa Project and reduced by some costs related to various development costs.

Energy Fuels stated ($ refers to US$):

“The Company sold 300,000 pounds of uranium at a gross margin of 58%, 79,344 pounds of vanadium at a gross margin of 37%, and the Alta Mesa property for a total gain of $116.45 million; Working capital increased, total assets increased, and total liabilities decreased.“

Looking out to the rest of 2023 Market Screener forecasts that Energy Fuels will achieve full year 2023 net profit of C$129 million, and a PE of 18.26.

2024 won’t have the Alta Mesa Project sale boost, but should hopefully be a good result if Energy Fuels continues to ramp production and sales from their large inventory.

As of March 31, 2023, the Company held 847,000 pounds of finished U₃O₈, 906,000 pounds of finished V₂O₅, and 250 metric tons of finished high-purity, partially separated mixed REE carbonate in inventory. The Company holds an additional 394,000 pounds of U₃O₈ as raw materials and work-in-progress inventory and 1-3 million pounds of solubilized V₂O₅ in tailings solutions that could be recovered in the future.

Energy Fuels state ($ refers to US$):

“As of March 31, 2023, the Company had a robust balance sheet with $143.61 million of working capital (versus $116.97 million at December 31, 2022), including $43.83 million of cash and cash equivalents, $60.44 million of marketable securities, $38.00 million of inventory, and no debt. At current commodity prices, the Company’s product inventory has a value of $52.53 million.“

Expansion plans and vertical integration from the newly acquired Bahia Heavy Mineral Sand & Rare Earth Project in Brazil

Energy Fuels’ new Bahia Project in Brazil is a well known heavy mineral sand deposit that has the potential to supply 3,000 – 10,000 metric tons (“MT”) of natural monazite concentrate per year for decades to Energy Fuels’ White Mesa Mill in Utah for processing into high-purity rare earth element oxides and other materials.

Energy Fuels state:

“While Energy Fuels’ primary interest in acquiring the Bahia Project is the REE-bearing monazite, the Bahia Project is also expected to produce large quantities of high-quality titanium (ilmenite and rutile) and zirconium (zircon) minerals that are also in high demand. 3,000 – 10,000 MT of monazite concentrate contains roughly 1,500 – 5,000 MT of total REE oxides (“TREO“), including 300 – 1,000 MT of neodymium-praseodymium (“NdPr“) and significant commercial quantities of dysprosium (“Dy“) and terbium (“Tb“)……..The uranium contained in the monazite, which is expected to be comparable to typical Colorado Plateau uranium deposits, will also be recovered at the Mill.”

Energy Fuels expects to receive monazite concentrates from the Bahia Project at a very low cost within the next few years.

Bahia Heavy Mineral Sand & Rare Earth Project in Brazil

Closing remarks

Energy Fuels has turned the corner becoming profitable again in 2023. Energy Fuels now has US$143.61 million of working capital which will greatly assist the Company progress with its aggressive plans to rapidly grow its USA rare earths processing business and vertical integration via the Bahia Heavy Mineral Sand and Rare Earth Project in Brazil. Added to this are the uranium and vanadium sales from their Utah Mill.

At a time when so many people are talking about the need to ramp up a supply chain of critical minerals, Energy Fuels is taking action to do just that.

Energy Fuels trades on a market cap of US$903 million or C$1.226 billion.

In this InvestorIntel interview, Tracy Weslosky talks with Critical Minerals Institute’s (CMI) Co-Chairman Jack Lifton attempts to explain what Vital Metals Limited’s recent announcement about “pausing all construction-related activities at the Saskatoon processing facility” means. Clarifying and reinforcing what the Saskatoon Research Council (SRC) has stated online, we would like to redirect our audience to the SRC website where they state: “SRC wants to clarify that its Rare Earth Processing Facility currently under construction is on schedule and on budget and will be fully operational by the end of 2024.”

Jack also shares his insight on a column written by CMI Co-Chairman Ian Chalmers titled Are Ionic Adsorption Clay Deposits a Game-Changer for the Supply of Rare Earths. He then goes on to discuss Appia Rare Earths & Uranium Corp.’s (“Appia”) (CSE: API | OTCQX: APAAF) recent acquisition of a Brazilian rare earths ionic clay project, Explaining that ionic clays can be a source of critical heavy rare earths, he explains how Appia may be the “only possible provider of this super critical material for the North American market.”

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About The Critical Minerals Institute

The Critical Minerals Institute or CMI is an international organization for critical mineral companies and professionals focused on battery and technology materials, defense metals, and ESG technologies in the EV market. Offering a wide range of B2B service solutions, the Critical Minerals Institute hosts both online and in-person events designed for education, collaboration, and service solutions that address critical mineral challenges for a decarbonized economy.

To learn more about The Critical Minerals Institute, click here

Disclaimer: 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.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].

Rare earths are a key building block in critical components found in modern technologies such as electric vehicles, wind turbines, and smartphones.

Over the last two years, there has been an abundance of discoveries of rare earths mineralization called Ionic Adsorption Clay (IAC), characterized by the extensive low-grade deposits in Southern China. Australia leads the way due to its long-lived and continent-wide deeply oxidized weathering environment considered necessary for these deposits to form. Barely a week goes by without a new discovery. But are these deposits genuinely IAC and does it matter?

While the abundance of these deposits has sparked investor interest, questions remain about their true nature and the economic viability of development.

The types of rare earths deposits

We need to set the scene for rare earths (REE) deposits to answer that question. REE deposits are well documented and are dominated by:

• Alkaline igneous rocks such as carbonatites, granites, and felsic volcanics;
• Hydrothermal altered calc-silicate sequences; and,
• Secondary regolith clay-hosted deposits. 

Reworked alluvial accumulations rich in monazite are clearly a separate type but becoming increasingly important as a competing source of REEs.

Regolith clay hosted deposits and the formation of IAC deposits

Regolith deposits develop by the weathering of the underlying host rock to form a variety of secondary clays and other oxidized products. Important source rocks typically have a relatively high background in rare earths and rare earth bearing minerals in these rocks will include monazite, xenotime, bastnaesite, allanite, titanite, and apatite.

Minerals like bastnaesite, allanite, and titanite are most susceptible to the acidic ground waters that develop in the upper levels of humus-rich soils in temperate or tropical climates, with moderate to high temperatures and rainfall. The REEs from the decomposed minerals migrate downwards as REE-ions in solution which can adsorb onto clay minerals such as kaolinite and become IAC deposits. 

Alternatively, the percolating solutions can combine with phosphate or carbonate to form secondary minerals (often in a colloidal phase) in a neutralization step. The more resistive minerals such as monazite and xenotime remain unaltered and can accumulate physically with partial removal of the surrounding oxidized rock by the weathering process.

The “does it matter” question

So we have the three types of rare earth accumulations in a regolith profile which gets us to the “does it matter” question.

The geometallurgy, capital expenditures (CapEx), and operating expenditures (OpEx) of a mining and processing facility, and the marketability of any products produced drive the economic development of any rare earths deposit. 

In regolith deposits, the Chinese found that weakly acidic ammonium sulphate or sodium chloride solution readily reclaims the rare earths from the ionic bonded clays allowing the resulting crude solution to be chemically treated to eliminate contaminants for further solvent extraction separation and refining. This processing can be in-situ leaching; heap leaching; or in-tank leaching with increasing cost and all with significant environmental impact. 

Generally, Chinese costs for REE reclamation from IAC deposits are low and despite the low recoveries peaking at around 30% to 40% in final products, these projects appear to be economic.

Economic challenges of other regolith deposits

The other regolith deposits require more sophisticated processing with higher costs from increased upfront chemical consumption (sulphuric acid) after mining from open-cut operations and subsequent processing, including removal of significant contaminants from the acid leaching. There have not been many colloidal-type deposits identified to date, and it appears many of the new group of announced deposits could be clay-hosted, residual monazite-xenotime accumulations and not true IAC. Solubilizing monazite and xenotime is a known commercial process and the costs are well-defined but are significantly greater than for IAC extraction. The processes to recover REs from resistate minerals in the near horizontal deposits at depth will require environmentally sustainable mining, potentially covering large areas.

If this is the case then it will be very interesting to see how many of these low-grade, sub 2,000 parts per million (ppm) or 0.2% of total rare earth oxides, will be economical to produce or do they have a touch of hype at present. 

Final thoughts

The economic viability of IAC deposits remains uncertain, with questions about their true nature and the costs of mining and processing. While the Chinese appear to have developed a low-cost method of reclaiming rare earths from IAC deposits, other regolith deposits require more sophisticated processing with higher costs and the potential for significant environmental impacts.

So, yes investors would be wise to understand the deposit type and geometallurgy before investing.

In this InvestorIntel interview, Tracy Weslosky talks to Appia Rare Earths & Uranium Corp.’s (CSE: API | OTCQX: APAAF) CEO and Director Tom Drivas about signing a letter agreement to acquire up to 70% interest in a prospective rare earths ionic clay project in Brazil. Currently doing its due diligence, Tom discusses how the new Brazilian project, if finalized, would not interfere with their main focus on the Alces Lake project. Tom goes on to say that the Brazilian project will have a new team with direct ionic clay expertise.

With an extensive exploration program planned for this year at the Alces Lake project in northern Saskatchewan, Tom discusses the company’s focus on delineating high-grade critical rare earth elements and gallium. Tom also provides an update on Appia’s ongoing relationship with the Saskatchewan Research Council (“SRC”) which is developing a rare earths processing facility in Saskatoon and the plans for the SRC to process monazite from the Alces Lake project as early as next year.

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About Appia Rare Earths & Uranium Corp.

Appia is a publicly traded Canadian company in the rare earth element and uranium sectors. The Company is currently focusing on delineating high-grade critical rare earth elements and gallium on the Alces Lake property, as well as exploring for high-grade uranium in the prolific Athabasca Basin on its Loranger, North Wollaston, Eastside, and Otherside properties. The Company holds the surface rights to exploration for 113,837.15 hectares (281,297.72 acres) in Saskatchewan. The Company also has a 100% interest in approximately 12,545 hectares (31,000 acres), with rare earth element and uranium deposits over five mineralized zones in the Elliot Lake Camp, Ontario.

To learn more about Appia Rare Earths & Uranium Corp., click here.

Disclaimer: Appia Rare Earths & Uranium Corp. 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.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].

The table below was produced and sent to me by a colleague at Ginger International Trade & Investments PTE., LTD in Singapore. It is based on that group’s more than 30 years of rare earth trading between China and the outside world. It is reproduced here with their permission.

I have very high confidence in the conclusions drawn in and from the chart.

Note well that this is a chart of Chinese “demand” for NdPr, the principal metals in rare earth permanent magnets and the source of almost all of the revenue from all of the rare earth enabled products. Today (2022), Chinese internal demand for Nd/Pr for domestic products is certainly more than 50%. But, the Chinese domestic market for rare earth permanent magnet enabled devices is already huge and growing. China likes to describe itself as a “developing country.” This is ridiculous and only a politically correct description for the purpose of giving the appearance of adhering to international treaties and organizations. The Chinese people are already at Purchasing Power Parity (PPP) with the USA, and their domestic industrial suppliers of consumer goods, such as BEVs, which can be very large users of rare earth permanent magnet motors, are far ahead of their foreign competitors. Just the 5 million EVs sold in the last three quarters of 2022 in China have probably consumed 12,500 mt of rare earths, as much as the entire USA, all of it imported from China as finished goods, used in 2022.

Look at the additional output estimated in the table to meet 2030 “Chinese” demand; it will require the equivalent output of 7, 2022, Lynases!

I am guessing, by the way, that the table uses only monazite feed stocks in the calculations, because monazite is the only widely used rare earth bearing mineral in which NdPr is, on average, 21%. Lynas’ Mt. Weld monazite is exceptionally rich in NdPr at 25% of the TREOs contained. The table predicts therefore that an additonal 250,000 mt/per year of monazite will have to be mined to reach the Chinese demand target.

China, for the last 5 years has been busily buying the bulk of the rest of the world’s annual output of monazite. Due to the content of thorium and uranium in monazite, there is today just one large scale capable processor in the Americas, Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR). China is already far along in meeting the goals set in the table above.

The United States, Europe, and India are still in some kind of denial, and believe that, even if there is a supply problem, it is a financial one. But this is only part of the problem as the Chinese know. The real problem is the limit to the accessibility of rare earth reserves, globally, at economic prices. China seems to be ignoring the economic issue by trumping it with security of the supply of critical minerals.

When will the USA and Europe learn that lesson?

GINGER INTERNATIONAL TRADE & INVESTMENT PTE., LTD

In this InvestorIntel interview, host Tracy Weslosky interviews Hallgarten & Company’s Principal and Mining Strategist Christopher Ecclestone about his recent Initiation Research Report on Auxico Resources Canada Inc. (CSE: AUAG) that he published on November 9, 2022. Titled Amassing Critical Mass in Strategic Metals Christopher stresses how Auxico has emerged as “a real player in the monazite market”.

Over the course of this interview, Christopher comments on some of the positive highlights contained in this research report, which includes the following examples:

• + Auxico Resources is morphing from a rank-and-file explorer into a specialty metals trader and developer diversified across metals and continents
• + Through an accord with an unlisted sister corporation (Central America Nickel), the company has access to Rare Earth Elements (REE) and other critical metals for sale into global markets
• + Rare Earth prices have held firm at levels substantially above the average levels of the last ten years

He then goes on to provide an update on Auxico’s portfolio of monazite rich deposits that include an “eye-popping collection of metals” such as rare earths, titanium, hafnium and zircon.

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About Auxico Resources Canada Inc.

Auxico Resources Canada Inc. (“Auxico”) is a Canadian company that was founded in 2014 and based in Montreal, trading on the Canadian Stock Exchange (CSE) under symbol AUAG. Auxico is engaged in the acquisition, exploration and development of mineral properties in Colombia, Brazil, Mexico, Bolivia and the Democratic Republic of the Congo.

To learn more about Auxico Resources Canada Inc., click here

Disclaimer: Auxico Resources Canada Inc. 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.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].

Solvay S.A. (BRU: SOLB | OTCQX: SLVYY) (‘Solvay’) has started making news in the rare earths space. Solvay, a Belgian chemical company, acquired Rhodia in 2011 and with it the rare earth division with plants in France and China. Since Ilham Kadri was appointed the new CEO of Solvay in March, 2019, their only press releases on its rare earth division have been about three patent infringement cases surrounding materials for catalytic converters and their treatment of exhaust gases from internal combustion engines. Then suddenly over September-October of this year, there were 3 news releases that were focused on developments in Solvay’s rare earths division.

On October 11, 2022, Solvay announced the signing of a non-binding offtake memorandum of understanding (MOU) with Hastings Technology Metals Ltd. (ASX: HAS) (‘Hastings’) where Hastings will initially supply Solvay with 2,500 tonnes per year of mixed rare earth concentrate (MREC) from its Western Australian Yangibana Project. The Solvay plant in La Rochelle, France was founded in 1948 and originally was built for the separation of rare earths from monazite. The reported capacity for La Rochelle is 10,000-15,000 tonnes per annum of rare earths concentrate, which if accurate, made it a significant producer in the 1980s and 1990s. This would mean however that the agreement with Hastings alone would not bring the plant back to full capacity, unless Hastings expands production over time or Solvay sources concentrate from other producers.

This new MOU follows Hastings’ recent move to take a significant position in Neo Performance Materials Inc. (TSX: NEO). NEO and Solvay compete vigorously in all aspects of rare earths but as noted above the main area is in the materials for catalytic converters. This move by Solvay with Hastings comes on the heels of Solvay announcing its plans to expand and upgrade its plant in La Rochelle to process rare earths and recycle rare earth magnets. NEO has also announced its plan to put magnet production capabilities in Estonia where it has a rare earth separation facility in Sillamae.

NEO’s plant in Estonia has traditionally received its rare earth concentrate from Russia but given current political circumstances, it begs the question how long can this last? NEO does have an arrangement with Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) to supply concentrate from Energy’s uranium operation in White Mesa, Utah. This is the only uranium production facility in the USA. Energy Fuels is going to process monazite to produce RE concentrate. To that end, Energy Fuels announced a deal in May of this year to take a position in a heavy minerals deposit in Bahia, Brazil, which contains monazite.

Another announcement from Solvay this October was that it took 100% control of Solvay Special Chem Japan (SSCJ) through its purchase of the remaining 33% from Santoku Corporation. This facility, like La Rochelle, is focused on catalyst and semiconductor industries. Decades ago this plant was processing RE concentrate from China. When China stopped exporting concentrate in the late 1990s Anan Kasei, a Japanese joint venture between Santoku Chemical and Rhodia, stopped the separation of rare earths and bought intermediate products from China again to produce more value-added products. Ilham Kadri, Solvay’s CEO, commented on the transaction saying: “This transaction marks a logical step forward in our global plan to expand our leadership in Rare Earths specialties.”

It will be interesting to watch Solvay and NEO position themselves in the European market which currently only has one metal/alloy producer, Less Common Metals, and one magnet manufacturer, Vacuumschmelze, a German producer. Let the games begin.

Auxico Resources Canada Inc. (CSE: AUAG) is a new entrant into the rare earth supply chain story. This year they have made 4 shipments of monazite sands concentrate from the Democratic Republic of Congo (DRC) totaling 720 tonnes of concentrate for a combined value of US$3.8 million. Auxico keeps 15% of this amount or US$570k and the balance going to Central American Nickel (CAN). Pierre Gauthier, a Montreal businessman, is the Chairman of Central American Nickel and Executive Director of Auxico Resources. Auxico has signed a sales agency agreement with CAN and according to their website the offtake agreement is for 5 years for a minimum amount of 18,000 tonnes of concentrate, or about 300 tonnes per month (TPM), and has a target of 1,000 TPM. The recent sale was analyzed to have approximately 60% total rare earth oxides (TREO) which is good and a Neodymium (Nd) level of 14.95% and Praseodymium (Pr) of 3.4%, which is higher than Mt. Pass levels.

Looking at the prices of Neodymium and Praseodymium from July, the sales price received is around 30% of the contained value of Nd and Pr, which is in the typical range paid by the Chinese for concentrate. No destination is indicated but China would be the logical destination. The only other places would be Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) in the USA which can handle monazite or possibly Neo Performance Materials Inc. (TSX: NEO) plant in Estonia. In the future, the Saskatchewan Research Council could also be a client once their pilot plant is completed. Since the middle of the year prices for Nd and Pr have dropped around 40%, so revenues per tonne should drop accordingly to around $4,000 per tonne. Their goal is to reach 1,000 TPM by year end, which would generate total revenues of $4 million/month or $600K USD for Auxico as its monthly 15% share.

Two recent additions to Auxico are noteworthy. Frederick Kozak became President after having been President at Appia Rare Earths & Uranium Corp. (CSE: API | OTCQX: APAAF). He replaces Pierre Gauthier who had been Chairman and CEO. Also added to the board was Melissa Sanderson, a leader in ethically sustainable growth and previously served as a senior diplomat, including as Charge d’Affaires of the US Embassy in Kinshasa, DRC, so she brings on the ground experience to Auxico as it deals with ethically sourcing concentrate from North Kivu, DRC cooperatives. Melissa sits on the Board of the Critical Minerals Institute.

Auxico is also involved in projects in South America. Of note is the Massangana tin tailings project. In June of this year, Auxico announced an agreement with Cooperativa Estanifera de Mineradores da Amazônia Legal Ltda. (“CEMAL”) concerning the production of tin, niobium and rare earths from the Massangana tailings estimated to contain 30,000,000 tonnes in the State of Rondônia, Brazil. As some of you know I am a fan of tailings as a source of critical minerals as the heavy lifting has already been done to get the material out of the ground. This deposit has 30 million tonnes of tailings. A study done by the German Mineral Resources Agency and the Geological Survey of Brazil indicates that three types of products could be generated from the tin tailings: (A) a monazite concentrate; (B) a columbite Concentrate; and, (C) a cassiterite concentrate. According to their press release the following concentrates can be produced:

The TREO level in the tailings is better than some greenfield mines being promoted currently.

As noted in Auxico’s June press release a feasibility study is to be done to process 3 million tonnes per year which would give a project life of 10 years. The objective of this project is to produce 135,000 tonnes of monazite concentrate per year, 19,500 tonnes of cassiterite concentrate (tin), and 45,000 tonnes of columbite concentrate (50% niobium + 5% tantalum). If the monazite concentrate is 37% as noted above, this would produce 50,000 TPY of TREO, which is significant as this would be around 25% of the current world production, which I estimate at 175-200,000 TPY. The tin output would be around 10,000 TPY in a market which in 2019 was estimated at 310,000 tonnes, so it will not have a large impact in the market. The columbite would generate over 22,000 tonnes in a market which last year Statistica estimated at 75,000 tonnes. The largest Niobium producer is CBMM which is also based in Brazil.

Auxico uses a separation and recovery technology called Ultrasound Assisted Extraction (UAEx), which has been proven successful at recovering rare earths as well as other critical minerals.

Overall, Auxico has a lot to watch on multiple fronts.

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