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Diversification and Dividend Paying, a Winning Strategy for Critical Minerals Leader Neo Performance Materials

Perhaps the most fundamental idea in the world of finance is diversification. Every financial planner in North America will tell you it’s the key to a healthy portfolio since more diversification equals less risk.

In fact, the simple concept of diversification explains why venture capitalists are among the wealthiest people you know. Although they tout their ability to pick “winners,” their real competitive edge is diversification. They invest in 100 companies, watch 90% fail, and make lots of money on the other 10%.

Wouldn’t it be great if we could apply this same concept to the critical minerals world? That is, diversify our bets across dozens of companies, dozens of metals, and dozens of applications.

It turns out that this can be done. There is in fact a company that could potentially allow us to ride the projected growth in critical mineral demand, and to benefit from the associated rise in prices… but also remain highly diversified.

Enter Neo Performance Materials Inc. (TSX: NEO), a mature, profitable, dividend-paying company that is a standout, for many reasons, in the critical minerals space.

First, consider this financial profile of the company as of Q1 2022:

Ticker Mkt Cap Cash Operating Inc P/E Dividend Yld
NEO $498m $62m $38m 7.96 .4%

Wow… a real company with real profits and a real balance sheet. Plus, it pays a dividend and trades at a bargain P/E ratio. This could be love!

What does NEO do to generate this sort of financial performance? In layman’s terms, they process unrefined rare earths into high value, separated, rare earth chemicals, which are then used to produce metals, alloys, and “bonded” rare earth permanent magnets (a bonded magnet is one that includes a bonding agent, which allows the molding of magnetic powder into unique shapes).

These activities are carried on through three business units: Magnequench, which focuses on neodymium-iron-boron magnets; Chemicals and Oxides, which manufactures and distributes a range of specialized industrial materials; and Rare Metals, which sources, refines and produces high-temperature metals including tantalum, niobium, hafnium, and rhenium, and electronic metals such as gallium and indium.

Between these three business units, NEO has a broad and diverse customer base spread around the world, including manufacturers of hybrid and electric vehicles, motors of all types, consumer electronics, jet engines, medical imaging equipment, LED lighting, batteries, solar panels, and many more.

And while this understanding of the company’s structure is important, it’s the financial statements that really capture the imagination. The annotated version is that the company is growing like crazy, and as they do, operating leverage is helping them become more profitable. Consider these statistics for FY 2021:

Division Revenue Operating Income EBITDA
Magnequench +72.4% +91.8% +60.4%
Chemicals & Oxides +48.4% +170% +197.6%

These are numbers that stock market dreams are made of.

Although our discussion thus far focuses on NEO’s operations, it leaves out an important detail. NEO is the only company in the world that operates dual supply chains inside and outside of China for rare earth element separation and advanced materials, and owns the only operating commercial rare earth separation facility in Europe.

This means the company is at the very heart of the West’s scramble to wean itself from China’s dominance in critical minerals, a strategic perch that creates a unique intangible: the entire western world would like to see it succeed.

At the end of the day, NEO brings together some very powerful competitive strengths. Perhaps the biggest is that although it will benefit on the margin from rising rare earth prices, its real leverage is in rising volumes in rare earth processing. Between the scramble away from China and the projected demand for rare earths in the green economy, a bet on rising processing volume may be about as good as it gets.

As for investors, NEO’s most attractive feature may also be the simplest — diversification. Their exposure to hundreds of customers around the world, dozens of different critical minerals, and dozens of applications for those minerals diversify away both business risk and market risk. Think of NEO as a prudent investor’s bet on the future of critical minerals.




Rising demand benefits the only integrated producer of bonded rare earth permanent magnets outside of China

Neo Performance Materials Inc. (TSX: NEO) (Neo) is an almost totally integrated Western (Canadian) company that processes mixed rare earth concentrates to produce separated individual and specifically blended rare earths to produce rare earth metals, alloys, and “bonded” rare earth permanent magnets. What makes Neo special is that they are the only company in the world that operates dual supply chains inside and outside of China for REE separation and REE advanced materials and end-use products. Neo owns the only operating commercial rare earth separation facility outside of Asia. It’s in Europe (Estonia facility) and it has sales and production centers spread across 10 countries globally.

All of the above makes Neo unique as a Western producer of rare earth materials as well as end-use products, which are critical in the green energy and EV revolution.

Award winning facilities

As announced on February 22 and March 28, 2022, Neo won awards for two of its key factories, the first in Thailand and the second in Estonia. The awards were Gold Medals awarded by EcoVadis for 2021 sustainability performance.

The second announcement stated: “This places Neo’s Silmet facility in Sillamäe, Estonia in the top five percent of all facilities around the world reporting to EcoVadis for its sustainability programs in 2022… The Silmet facility processes mixed rare earth feedstock into a variety of high-purity rare earth specialty materials, including neodymium-praseodymium (NdPr) oxide, which is used by Neo’s Magnequench business unit to produce neodymium-iron-boron (NdFeB) magnetic materials and magnets for automotive, factory automation, home appliance, circulation pump, and other applications.”

This impressive recognition is also very well timed given the surging demand for NdFeB magnets used in many EV motors. Global electric car sales finished March 2022 with 851,000 sales for the month (the second best month ever), 60% higher YoY, with market share of 15%.

The global OEM automotive industry today uses mainly sintered NdFeB rare earth permanent magnets, but the use of bonded type NdFeB in this application is growing rapidly. Neo has pioneered the use of bonded NdFeB magnets in automotive applications with Japanese customer/partner, Honda, and this use is expanding. Neo has agreed with European magnet customers to expand its capacity there and to add sintered NdFeB magnets to its product lines. The EU has encouraged and is financially supportive of this move by Neo.

Prices for rare earths materials and end-user products used in the green economy have been surging the past year, due to demand exceeding supply, and this is reflected in Neo’s latest financial results. This supply deficit looks to be baked in for at least the next decade due to the growth of the green economy.

Q4 2021 and Full-Year financial results highlights (in USD)

As reported on March 10, 2022, Neo achieved the following outstanding financial results:

  • “Q4 2021 revenue of $153.4 million higher by 39.0% YoY; full-year 2021 revenue of $539.3 million was higher by 55.5% YoY.
  • Volumes in the fourth quarter of 3,311 tonnes; full-year volumes expanded by 20.2%.
  • Operating income of $12.7 million in the quarter; $59.9 million for the year.
  • Adjusted Net Income for the quarter of $16.1 million, or $0.39 per share, with full-year Adjusted Net Income of $55.0 million, or $1.42 per share.
  • Adjusted EBITDA for the quarter of $19.7 million; 2021 Adjusted EBITDA of $81.9 million was 183.7% higher YoY.
  • Cash balance of $89.0 million after raising $38.0 million from equity offering and distributing $12.8 million in dividends to shareholders.”

As shown above, full-year 2021 revenue was 55.5% higher YoY, based on volume growth of 20.2%. Clearly higher-end product prices helped support the stellar results. Neo sums it up well and the general direction the business is heading by stating:

“Neo reported strong year-over-year (YoY) gains in revenue, volumes, operating income, Adjusted EBITDA, and profitability in the year ended December 31, 2021, driven largely by increased demand for products across all three of its operating divisions, higher selling prices for rare earth materials, and continuing progress in several of the Company’s strategic initiatives.”

I did warn investors that this was what we were expecting from Neo with our December 22, 2021 article: “Neo Performance Materials looks to expand capacity as it rides the tailwind of growing rare earth permanent magnet demand.”

Neo Performance Materials is one of a few Western companies able to process rare earths and make magnets

Source: Neo Performance Materials website

Closing remarks

Neo Performance Materials occupies a rare and critical position in the Western supply chain to produce rare earths specialty products. Demand for powerful rare earth type magnets used in many consumer goods as well as in wind turbines and EVs is expected to surge this decade.

Neo Performance Materials trades on a market cap of C$546 million and a current PE of 17.6. 2022 PE is forecast at 7.82.

The next catalyst for Neo will be the Q1, 2022 earning results due out before the market opens on May 13, 2022. Stay tuned.




Will Technology Metals’ Supply Meet the Demand for EVs?

Since market economics’ common sense was codified by Adam Smith in the 18th century, people have been aware of the fact that the price for a good or service is what a willing buyer will pay a willing seller. Of course, the seller must be able to get the good or perform the service and the buyer must have or be able to get the money. These last requirements seem to have escaped the notice or understanding of the market manipulators also known as Western politicians.

The global OEM transportation vehicle market is really not free. It is being politically manipulated by climate change politics, based on the belief that eliminating the carbon dioxide output from the use of fossil fuels in vehicle powertrains, based on internal combustion engines (ICEs) and replacing them with onboard stored electricity in batteries driving electric motors (BEVs) will have a significant “positive” effect for humans on the earth’s climate. Whether or not this cause-and-effect hypothesis is true the total conversion of the world’s transportation fleet to battery electric power is not possible for the size of the present fleet and its projected growth. This is because the (battery) technology metals necessary to effect this change simply do not exist in sufficient quantities that are accessible to mankind’s engineering abilities, willingness to deploy capital, and the real global energy economy.

This supply limit will not become apparent until after 2025, so it is being ignored as a problem easily solved by the “efficient” market, whose actual strictures the political class does not understand.

One clue about structural limitations, which politicians either do not understand or do not believe, is that the current Western commodity price inflation is driven by efficient market supply shortages, which will automatically correct from infinite supply resources, not by free market excess (unsatisfiable) demand. Another, perhaps more insidious, supply limitation is simply the price ceiling, the maximum amount that the consumer can/will pay for a metal, before that metal becomes too expensive for the intended use. This is happening now, for aluminum, as soaring energy costs in Europe, for example, force the shutdown of aluminum electrolytic smelters, the production cost from which has become more than the market price of aluminum. This was caused by an entirely man-made shortage of electricity through sheer political short-sightedness, not by the aluminum marketplace.

The politically driven demand pull for BEVs has already skewed the lithium market by driving lithium prices high enough to allow mines and sources, that would have been marginal or worse, to appear to be economical and to develop. But lithium prices are already too high for the continuing decline in battery costs to achieve par with fossil-fueled engines in the near term, if ever. The politicians’ answer to this is to restrict fossil fuel production and make it more costly. Thus a (n inflationary) price spiral has begun that could price BEVs as well as reduced production, thus more expensive, ICEs and their fossil fuels “out of the mass market!”

The structural metals and materials used to make vehicles used for the transportation of people and freight can be, and mostly are, recycled. This is driven by the fact that it takes less energy to recycle structural metals than to produce new material from mines. A significantly large proportion of the iron, aluminum, copper, zinc, and lead used to construct new vehicles is recovered each year from the recycling of end-of-life scrapped vehicles. Cars in North America, have average useful lives of 12 -17 years. The North American car “fleet” is over 300 million vehicles and each year about 5% of the fleet is scrapped. This means that enough iron, copper, aluminum, and lead is recycled each year to build 15 million new vehicles if 100% perfect recycling is assumed. It is noteworthy that the recycling efficiency of the American scrap, iron & steel, aluminum, copper and lead industries is very high and that most American steel for automotive use is made from scrap in, reliable, fossil or nuclear fueled (electrical) baseload requiring, electric arc furnaces. The North American OEM automotive industry considers 17 million vehicles produced and sold to represent a good year, so it does not have a problem sourcing structural metals for components. In fact, enough new vehicles are imported into North America that the need for structural metals for just domestic production by the OEM American automotive industry is met by just the metals produced from recycling.

So far, so good.

Now comes the not-so-good news about the technology metals required for manufacturing automobiles. Today’s internal combustion engine powered motor vehicles use, on average, about 0.5kg of rare earth permanent magnets (REPMs), so the annual need for such by the domestic OEM industry is between 6,000 and 8,500 tons of REPMs (here I assume that of the 17 million units sold each year up to 5 million are imports from another country (including Mexico and Canada besides China, Japan, Korea, Germany, France and the UK).

And, a Tesla Model 3, electric vehicle (EV) with the range required by American buyers uses up to 5kg of REPMs, and 6-8 kg of lithium, measured as the metal, in its lithium-ion rechargeable battery-based powertrain.

How many Gigawatt hours of lithium-ion battery storage for use in EVs and stationary storage can be produced with the earth’s known physically and economically accessible deposits of the necessary critical materials? I was going to submit that question as an abstract to a coming battery conference, but I realized that the academics and bureaucrats, and corporate researchers who attend the conference don’t have enough background in industrial mineral economics to understand what I want to say, and, in any case, don’t want to hear it.

Below is Bloomberg’s guesstimate of the demand growth for the supply of all of the metals necessary to build (projected levels of)  EVs through 2030. It is very important to understand that the only increased demand for metals for building EVs that matters are for those metals that are non-structural, the EV Technology Metals. EVs will use no more of structural metals in the aggregate than ICEs do, so that as the ICEs are replaced by EVs, there will be no increased demand for iron, aluminum, or zinc, and a marked decline in the demand for lead as starter lead-acid batteries are phased out.

But those technology metals specifically required for an EV’s powertrain, the battery and the electric motors will see a dramatic increase in demand if and when EVs achieve a significant market penetration.

For some reason, which I think is just ignorance, the major news media “predictors” pay no attention to the distinctions between the demand for structural metals, which will simply be the same total, with the exception of that for copper, as is used today unless the annual global total production of motor vehicles increases dramatically, which is very unlikely. Mature Western (and Japanese and Korean) domestic markets will decline in demand as longer lived vehicles become necessities due to price. This may well have a negative effect on recycling efficiency for all metals as the scrap market re-adjusts to lower supply and lower annual demand for new vehicles.

EVs, however, as they replace ICEs will not increase the demand for structural metals per unit, but it is the demand for EV technology metals that could skyrocket, if that much supply were possible.

To reiterate: The above chart is wrong with regard to iron and aluminum demand for vehicles; they are a function of the total number of vehicles built in a year, and, since Western markets are mature in transportation vehicles, the demand for new iron and aluminum for that use is unlikely to increase more than 25%, if that, to add new vehicle production, perhaps mostly for the Indian and African home markets.

For EV Technology Metals the story is very different. An EV uses about 50 kg of copper for its wiring harness, electric motor windings, and lithium-ion battery internal circuitry. This represents a 50% increase over the demand for copper in an average ICE, so that the demand for copper for EVs could add fifty percent to the overall demand for copper by the OEM automotive industry today if and only if ICEs are completely replaced by EVs. Thus, the factor for copper in the above chart, 10X, should be 1.5X.

The potential demand growth for the most critical EV Technology Metal, lithium, is the limiting factor in the projected transformation of power trains from fossil fuels to battery moderated electricity. Today BEV sales are reported to be 3% of the global total vehicle sales. This is projected to reach 10% by 2025, so that by 2025 at least three times as much lithium will be needed to satisfy the demand for batteries.

In 2021 some 86,000 tons of lithium, measured as metal, were produced. 60% of that total was used to manufacture lithium-ion batteries. Let’s call that 50,000 tons for batteries in 2021.The 36,000 tons of lithium used for non-battery uses is unlikely to grow, so the necessary supply increase to satisfy the needs for producing 10% BEVs in 2025 is 3x, for a total demand in 2025 of 150,000 tons of lithium, measured as the metal. Adding the 36,000 tpa of lithium demand for other uses we get a total lithium demand of 186,000 tons for 2025, which is essentially 2X 2021 total demand for lithium. This is most likely do-able by the lithium mining industry, but the downstream supply chain to turn 150,000 tons of lithium into fine chemicals and battery electrodes does not now exist, and although capacity increases may be planned it cannot be determined how much will actually be constructed in time. This is determined by the availability of capital, its proper allocation, the availability of engineering skills, and the availability of construction capacity. Although these can be quantified, government interference, also known as regulation, is the single largest time, and frequently capital, consuming impediment to mining and process engineering in the West.

The (mineral) economic illiterates who populate our universities and governmental bureaucracies live in a fantasy world of infinitely available natural resources and their unimpeded economic production. In that world, and only that world, is a green energy transition possible without an unacceptable decline in global standards of living, and the creation of a have and have-not society on a global scale. Let the UK’s current

Production and processing of the EV Technology Metals are and will continue to be a good investment until a consensus is reached about a balanced energy economy, in which fossil fuels continue to be used for critical needs for which they are irreplaceable. Continued production of EV Technology Metals after that will be determined by price.




North American Rare Earth Juniors Consolidate Capabilities to Advance Towards a Total Domestic Supply Chain

There were otherwise unrelated announcements last week, but, with a common purpose, by separate pairs of rare earth juniors: The common purpose was the advancing of the creation of a domestic American rare earth enabled product(s) total supply chain.

In one case the Canadian rare earth Junior miner, Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF), entered into a non-binding MOU for the future delivery of a rare earth mineral concentrate supply, containing 500 tpa of Neodymium/Praseodymium, with one of its investors, privately owned, USA Rare Earth LLC , which has committed itself to producing commercial tonnages of rare earth permanent magnets in the United States as early as 2022-23. Another announcement was made by the Canadian rare earth junior critical metals’ processor, Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF | FSE: U9U), which announced that it had entered into an MOU with Australia’s Vital Metals Ltd. (ASX: VML | OTCMKTS: VTMXF ): for a supply of rare earth ore concentrates from Vitals’ already underway mining operations in Canada’s Northwest Territory, to be first processed into a mixed rare earth carbonate in a facility funded by Canada’s Saskatchewan Research Council in Saskatoon, Saskatchewan, and then shipped to Ucore’s proposed Strategic Metals (processing) Center in Ketchikan, Alaska, USA, for separation into individual rare earths.

These announcements are indicative of a sea-change in the thinking of an increasing number of non-Chinese junior rare earth companies. In the last rare earth boom from 2007-2012 hundreds of juniors had the same goal, the production and sale of a “mixed con” of rare earths, in other words, of an ore concentrate or a concentrate of mixed rare earth solids prepared by hydrometallurgical treatment of ore concentrates. It was commonly believed at that time that Chinese rare earth separation companies, then the only customers, would pay 65% of the ”basket value,” defined as the market price of separated versions of the rare earths contained in the mixed concentrate. This was magical thinking based on a complete misunderstanding of the value of, and the markets for, either ore concentrates or mixed rare earth concentrates. Even today some juniors still insist that their ore concentrates have a basket value based on the values of finished goods. Chinese separators typically have offered 40% of the basket value, delivered into China for high grade ore concentrates free of elements that interfere with solvent extraction separation of mixed rare earths.

The ”supply chain crisis” has clarified the thinking of many juniors. They realize that their product must have an immediate determinable-price demand and that this demand must be by processors who add enough value, so that they can afford to buy the junior’s product at a price that allows the junior to make a profit. This may seem trivially obvious, but it was blithely overlooked in the 2007-12 rare earth boom.

A new factor has entered the calculus for determining the price of mixed rare earth ore concentrates or of mixed rare earth solids free of both radioactive and of SX interfering contaminants. That factor is any added value governments and industries are willing to pay for non-Chinese, or domestic, materials of these descriptions.

So far, only one non-Chinese vendor has entered the market with mixed rare earth carbonate (solids) free of radioactive and SX interferents. That is America’s Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR),  which is processing non-Chinese monazite ore at its White Mesa, Utah, uranium processing mill. The mixed rare earth carbonate solids are being sold, at a profit to Energy Fuels, to Canada’s Neo Performance Materials Inc. (TSX: NEO | OTCMKTS: NOPMF),  which has them delivered to its rare earth separation facility in Estonia, where the material is separated into individual rare earths for further processing by Neo or its customers into rare earth permanent magnets, phosphors, ceramic additives, and other fine chemicals. The European Union is already well ahead of the USA in organizing a financial facility to underwrite the creation of a European domestic rare earth enabled products total supply chain without Chinese participation at any level.

In the United States and Canada the supply chain issue is downstream of mining, and is manifested in the total lack of commercial facilities for rare earth separation, metal and alloy making, magnet making, and end use manufacturing.

Europe has existing facilities for up to 12,000 tpa of rare earths separation, a thousand tpa of rare earth metals and alloys, and substantial capacity and existing expertise to make rare earth permanent magnets of the most widely used, sintered, type. Further, both the UK and the EU governments have already begun to support the expansion of existing rare earth processors financially.

The United States and Canada should take a lesson from the UK and the EU: Get industrial end users involved from the very beginning. The UK and the EU speak with industrial experts as well as academics and bureaucrats. The difference is really beginning to show.




Newly listed Australian Rare Earths Limited is off to a flying start

Rare earth permanent magnets are so powerful they are the heart of modern ‘efficient’ motors that drive many electric vehicles, wind turbines and electrical appliances. Their advantage is that they achieve stronger output and therefore reduce power consumption and boost efficiency compared to other electric motors with no rare earth permanent magnets. These magnets contribute 30% of the market by volume and >90% by value.

Key magnet rare earth material prices such as Neodymium (Nd), Praseodymium (Pr) and Dysprosium (Dy) have been rising the past 2 years, partly due to the surge in electric vehicle (EV) sales and also due to supply concerns out of China.

Australian Rare Earths Limited (ASX: AR3) (“AREL”) is a newly listed Australian company focused on the valuable magnet rare earths at their Koppamurra Project in Australia. The Company listed at A$0.30 on July 1, 2021 raising A$12 million. The stock tripled in the first five days after listing reaching A$0.90, and is currently trading at A$1.08.

Australian Rare Earths Limited stock price chart (IPO at A$0.30 on July 1, 2021)

Source: Australian Rare Earths Limited

The Koppamurra Project

AREL is progressing the exploration of a significant deposit of valuable ‘clay-hosted’ rare earth elements, located at their Koppamurra Project spread over tenements in South Australia and Victoria. Past exploration of the Koppamurra region has shown it contains mineralization containing the rare earth elements neodymium, praseodymium, dysprosium and terbium as revealed from reviewing historic drilling data and samples available from State core repositories. The rare earths were found to accumulate in the shallow clay layer deposited onto a limestone base (Gambier Limestone).

The Koppamurra Project is a frontier ‘ionic clay’ rare earth opportunity in South Australia and Victoria, Australia, spread over a massive ~4,000km². Clay hosted rare earth mining is shallow-excavation mining involving progressive rehabilitation and is much lower impact than many other forms of mining. The deposits of interest are non-radioactive, which is a significant advantage over other mineral sand and hard rock rare earth element deposits.

Ionic clay projects have significant advantages over mineral sand and hard rock rare earth projects

Source: Company presentation

Current news and next steps

Prior to AREL listing on the ASX, 470 aircore, auger and push tube drill holes were completed in January 2021 and a JORC 2021 Inferred Mineral Resource of 39.9Mt @ 725ppm TREO was announced. A feature of the Koppamurra Mineral Resource is low radioactivity. Preliminary testwork at ANSTO has demonstrated that recovery improves at lower pH levels and this will be investigated further to improve optimization of metallurgical recoveries, currently around 50% to 70%.

More recently a further 79 hole drill campaign was completed with assay results pending and expected by mid to late August. Further field exploration will begin in October.

In July AREL announced that they had acquired new tenements and expanded the Koppamurra project by greater than 40%.

Board and management are highly regarded

The AREL board consists of renowned metallurgist Dudley Kingsnorth. He is an internationally recognized expert in the rare earths industry, providing advice to producers, end-users and government entities. He has over 50 years of experience in operations, project development and marketing.

Australian Rare Earths Limited reasons to invest summary

Source: Company presentation

Closing remarks

It is still very early days for Australian Rare Earths Limited and their ionic clay rare earths Koppamurra Project in Australia, already with an Inferred Mineral Resource of 39.9Mt @ 725ppm TREO. The IPO raised A$12 million which will largely be used for exploring their tenements with drill assays due out shortly in August, to be followed by a further exploration program starting in October. Ionic clay projects have several advantages including lower CapEx, faster and easier development and processing, and no radioactive waste streams.

The Board and Management are highly experienced and include renowned rare earths expert Dudley Kingsnorth. The stock price has already taken off given the excitement behind the Company’s potential. Despite this, the market cap is still reasonable at A$122 million. One to follow closely.




Lifton challenges the Green Elite Environmentalists to provide real evidence of an industrial park powered solely on alternative energy

Following the Engineering as well as the Science: Misrepresenting the Type of Energy Production Needs for the Supply of and the Demand for Basic as well as Critical Materials  

Our civilization, the age of steel, cannot continue without fossil-fueled or nuclear-fueled baseload electricity generation. So when some ask why are the Chinese building a new fossil fuel fired baseload electrical generation plant on a biweekly basis, and why are they building dozens of nuclear plants for the same purpose? It’s because they know that for maintaining their heavy industrial raw material and manufacturing industries unreliable, intermittent power plants cannot be used and battery storage cannot be engineered to supply the needed continuous heavy industrial loads. 

The popularization of science gives cover to many journalists, who simply don’t know what they’re talking about, to rely on a recent neologism known as “settled science,” which is an oxymoronic contradiction in terms. It would be more realistic to speak of “settled engineering,” but that would require quite a bit of physics, chemistry, metallurgy, and mathematics to comprehend. Be aware that once an engineering design is completed, erected, and operational a great deal of time and money has been expended and any changes can only be made at the margin without having to scrap the operation. This is why so-called “disruptive technologies” don’t matter to existing basic and critical metals operations nearly as much as getting settled engineering to work efficiently. This, in fact, was one of the reasons that Molycorp failed financially. The engineering of chemistry, for example, that allows the mass production of iron, steel, aluminum and copper has been essentially the same for nearly a century and a half. The engineering of the production of the raw materials to manufacture rare earth permanent magnets was “settled” a half-century ago when the magnets and the demand for them became large enough to require commercialization. 

I do not consider someone to be dumb because they don’t know or even know of the second law of thermodynamics. I don’t consider them dumb if they know of the law but don’t understand its applications to the mining, ore beneficiation, extraction, separation, purification, transformation into metals and alloys, and the fabrication from those metals and alloys of forms suitable for the manufacturing of consumer and military goods; I do, however, consider those who ignore the needs for and types of energy production required for each and every one of the aforementioned steps in the supply chain just detailed here, but pontificate upon green energy anyway, as if the need for fossil/nuclear fueled baseload wasn’t a consideration, as dumb. 

Every step in the production of a metal from its ores is an application that produces negative entropy. This means that the forms in which we find every natural resource on the earth, both fuel and nonfuel minerals is, when found, already in its natural, highest energy, state for its environment. In order to change that state into one in which we can use the materials requires that we temporarily alter the natural state of the resource by chemically and electrochemically rearranging its energy status and therefore making it metastable in our environment but useful in human terms.  

Let’s look at the production of steel, the most produced metal (annually) on the planet for the past 150 years, which is, in fact, an alloy of iron. 

In its natural state on and near the surface of the earth iron occurs as fully oxidized chemical compounds, the highest energy form of iron that the earth’s crust, oceans, and atmosphere allow to be stable at STP (standard temperature and pressure). 

For each chemical element, there is only one total energy path that can be taken to put it temporarily into its lowest energy form as a pure chemical element at STP. To achieve that path chemical, metallurgical, and mechanical engineers must cooperate and always compromise with nature’s rules. 

For the use of iron, and every other chemical element, that path begins with economic considerations: How much iron, proportionately, and measured as metal, at STP, is in the mineral chosen for its entry into the steel supply chain? The higher the iron content (grade) the less overall energy will be required to convert it to a metallic form. Simultaneously it must be determined how much tonnage of iron bearing mineral of this grade is in the deposit (This is known as the “resource” in mining jargon).  

Miners then determine by a Techno Economic Analysis (TEA) (An academic acronym for figuring out if something can be done economically with known technologies) whether developing the deposit into a mine is feasible ( I.e., is a profitable venture) in the (mining) near term. 

To do a TEA miners must consider not just the amount of iron that can be produced annually but also the projected “life of the mine,” which is a measure of the total amount of iron that can be economically recovered from the project over time. This is measured as how long the mine can produce sufficient output annually to be profitable. 

Whether an iron ore deposit can be economically turned into a mine depends not only upon the grade and total tonnage but upon its accessibility and amenability to the machines needed to dig out the ore, the chemical engineering necessary to beneficiate (concentrate) the ore to as high an iron content as possible, and the chemical engineering necessary to process the ore concentrate into crude metallic iron.  

With the last step (there are many more) mentioned above comes a dilemma for the Green Elite Environmentalists (GEEs). The conversion of iron ore to pig iron requires a large amount of continuous heat energy. For a blast furnace, the type typically used to reduce iron ore to crude metallic iron, this heat can be supplied by the combustion of coal or natural gas or by electricity. In all cases, the heating must be constant (uninterrupted). The idea of using wind or solar for this is ridiculous. It gets even more ridiculous when the next stage, the conversion of iron into steel is examined. In the USA today 70% of steel is produced by Electric Arc Furnaces using scrap. The arc in those furnaces is maintained at 10,000 to 20,000 amperes, for sometimes more than a day. What solar, wind, or battery field, or any combination of them can supply this without massive costly (and pointless, economically, if alternatives are available) engineering  

Thermodynamics requires that to produce a ton of steel requires 440 kwh of energy. Today in the United States that costs around $50.00. 

As soon as the switch to alternate energy impacts the cost of baseload fuels and the price of electricity so much that even politicians can understand it the great unthinking public may realize that baseload electricity for air conditioning and water pumping is a small price to pay to adapt to any small increase in temperature, if it ever occurs. I doubt that any culture will allow a return to the thirteenth century BC, when steel was more valuable than gold.




Energy Fuels’ Mark Chalmers on creating a new U.S.-to-Europe rare earths supply chain

In a recent InvestorIntel interview, Tracy Weslosky speaks with Mark Chalmers, President and CEO of Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) about how the recent contract signed with Neo Performance Materials Inc. (TSX: NEO) has created a new U.S.-to-Europe rare earths supply chain.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Mark went on to say that Energy Fuels is focused on extracting rare earths from monazite sand and explained why it is “more compelling and competitive than any other source of rare earths feed in the world.” He added that utilizing its existing infrastructure, Energy Fuels is producing rare earth carbonate with plans to develop its own separation capabilities at its White Mesa Mill in Utah to become a producer of rare earth products based in the United States. 

To watch the full interview, click here.

About Energy Fuels Inc.

Energy Fuels is a leading U.S.-based uranium mining company, supplying U3Oto major nuclear utilities. Energy Fuels also produces vanadium from certain of its projects, as market conditions warrant, and is ramping up to commercial production of REE carbonate in 2021. Its corporate offices are in Lakewood, Colorado, near Denver, and all of its assets and employees are in the United States. Energy Fuels holds three of America’s key uranium production centers: the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery (“ISR”) Project in Wyoming, and the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only conventional uranium mill operating in the U.S. today, has a licensed capacity of over 8 million pounds of U3Oper year, has the ability to produce vanadium when market conditions warrant, as well as REE carbonate from various uranium-bearing ores. The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million pounds of U3O8 per year. The Alta Mesa ISR Project is also on standby and has a licensed capacity of 1.5 million pounds of U3O8per year. In addition to the above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium resource portfolios in the U.S. and several uranium and uranium/vanadium mining projects on standby and in various stages of permitting and development.

To learn more about Energy Fuels Inc., click here.

Disclaimer: Energy Fuels Inc. is an advertorial members 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 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 email info@investorintel.com.




Neo Performance Materials’ Constantine Karayannopoulos on creating a new U.S.-to-Europe rare earths supply chain

In a recent InvestorIntel interview, Tracy Weslosky speaks with Constantine Karayannopoulos, President, CEO and Director of Neo Performance Materials Inc. (TSX: NEO) about how the recent contract signed with Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) has created a new U.S.-to-Europe rare earths supply chain.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Constantine went on to say that the supply chain supplements Neo’s existing rare earth feed supply and will help it to ramp up rare earth production at its plant in Estonia to meet demand from their growing customer base in Europe. Talking about the ESG implication of the deal, he explained that it unlocks “extraordinary economic and environmental potential by utilizing low-cost rare earth feedstock from monazite ore that is a byproduct of existing mining.”

To watch the full interview, click here.

About Neo Performance Materials Inc.

Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo’s advanced industrial materials — magnetic powders and magnets, specialty chemicals, metals, and alloys — are critical to the performance of many everyday products and emerging technologies. Neo’s products help to deliver the technologies of tomorrow to consumers today. The business of Neo is organized along three segments: Magnequench, Chemicals & Oxides and Rare Metals. Neo is headquartered in Toronto, Ontario, Canada; with corporate offices in Greenwood Village, Colorado, US; Singapore; and Beijing, China. Neo operates globally with sales and production across 10 countries, being JapanChinaThailandEstoniaSingaporeGermanyUnited KingdomCanadaUnited States, and South Korea.

To learn more about Neo Performance Materials Inc., click here.

Disclaimer: Neo Performance Materials Inc. is an advertorial members 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 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 email info@investorintel.com.




Energy Fuels’ Mark Chalmers and Constantine Karayannopoulos of Neo Performance Materials on the creation of a new rare earths supply chain

In a recent InvestorIntel interview, Tracy Weslosky speaks with Mark Chalmers, President and CEO of Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) and Constantine Karayannopoulos, President, CEO and Director of Neo Performance Materials Inc. (TSX: NEO) about their recent signing and launch of commercial shipments of rare earth product to Europe.

This significant news was accompanied by a physical shipment of commercial quantities of rare earths from Energy Fuels’ White Mesa Mill in Utah to Neo Performance Materials’ plant in Estonia and represents an important milestone in the creation of a new rare earths supply chain.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Mark went on to say that Energy Fuels has surprised the world with its quick progress in the rare earths space. He added that Energy Fuels is capable to quickly ramp up rare earth carbonates production from monazite sand and is exploring opportunities to secure more sources of monazite sands. Constantine told InvestorIntel that rare earth carbonates from Energy Fuels’ White Mesa Mill in Utah will be processed into separated rare earth materials at Neo’s Silmet rare earth separations facility for use in rare earth permanent magnets and other rare earth based advanced materials. He also explained how the deal creates a win-win situation for both Energy Fuels and Neo.

To watch the full interview, click here.

About Neo Performance Materials Inc.

Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo’s advanced industrial materials — magnetic powders and magnets, specialty chemicals, metals, and alloys — are critical to the performance of many everyday products and emerging technologies. Neo’s products help to deliver the technologies of tomorrow to consumers today. The business of Neo is organized along three segments: Magnequench, Chemicals & Oxides and Rare Metals. Neo is headquartered in Toronto, Ontario, Canada; with corporate offices in Greenwood Village, Colorado, US; Singapore; and Beijing, China. Neo operates globally with sales and production across 10 countries, being JapanChinaThailandEstoniaSingaporeGermanyUnited KingdomCanadaUnited States, and South Korea.

About Energy Fuels Inc.

Energy Fuels is a leading U.S.-based uranium mining company, supplying U3Oto major nuclear utilities. Energy Fuels also produces vanadium from certain of its projects, as market conditions warrant, and is ramping up to commercial production of REE carbonate in 2021. Its corporate offices are in Lakewood, Colorado, near Denver, and all of its assets and employees are in the United States. Energy Fuels holds three of America’s key uranium production centers: the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery (“ISR”) Project in Wyoming, and the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only conventional uranium mill operating in the U.S. today, has a licensed capacity of over 8 million pounds of U3Oper year, has the ability to produce vanadium when market conditions warrant, as well as REE carbonate from various uranium-bearing ores. The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million pounds of U3O8 per year. The Alta Mesa ISR Project is also on standby and has a licensed capacity of 1.5 million pounds of U3O8per year. In addition to the above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium resource portfolios in the U.S. and several uranium and uranium/vanadium mining projects on standby and in various stages of permitting and development.

To learn more about Neo Performance Materials Inc., click here.

To learn more about Energy Fuels Inc., click here.

Disclaimer: Neo Performance Materials Inc. and Energy Fuels Inc. are advertorial members 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 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 email info@investorintel.com.




Tom Drivas on the coronavirus and Appia’s commitment to a North American rare earths supply

“China supplies 85% of the rare earths to the world. The world is nervous not only because China has control on supply but also, let’s take coronavirus as an example, if work stops in China then what happens to the supply.” States Tom Drivas, CEO, President and Director of Appia Energy Corp. (CSE: API | OTCQB: APAAF), in an interview with InvestorIntel’s Peter Clausi at PDAC 2020.

Tom went on to say that the US, Canada, Australia, and other countries want to see some supply outside of China but there are only a few projects that can compete with the Chinese. Tom also spoke on Appia’s Alces Lake property which has uranium and rare earths. Tom said it is one of the best projects in North America in terms of high grade critical rare earths. The company is drilling at the property and has got some zones right on the surface with grades upto 49% rare earths.

To access the complete interview, click here

Disclaimer: Appia Energy Corp. is an advertorial member of InvestorIntel Corp.