In this discussion, InvestorIntel’s Byron W. King interviews Pat Ryan, Chairman and CEO of Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF). They discuss the rapid move to electrification within the global auto industry, and how Ucore is positioned to become a key supplier of critical metals to Tier 1 component makers. Presently, Ucore is focused on a specific, highly profitable, downstream market segment that goes well beyond mining and mineral concentration. Ucore has strong support for startup operations from the State of Alaska, with eventual plans to build out facilities in other areas of North America to meet the fast-growing demand for rare earth materials.

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About Ucore Rare Metals Inc.

Ucore is focused on rare- and critical-metals resources, extraction, beneficiation, and separation technologies with the potential for production, growth, and scalability. Ucore has a 100% ownership stake in the Bokan-Dotson Ridge Rare Earth Element Project in Southeast Alaska, USA. Ucore’s vision and plan is to become a leading advanced technology company, providing best-in-class metal separation products and services to the mining and mineral extraction industry.

Through strategic partnerships, Ucore’s vision includes disrupting the People’s Republic of China’s control of the US REE supply chain through the development of a heavy and light rare-earth processing facility – the Alaska Strategic Metals Complex in Southeast Alaska and the long-term development of Ucore’s heavy-rare-earth-element mineral-resource property located at Bokan Mountain on Prince of Wales Island, Alaska.

To learn more about Ucore Rare Metals Inc., click here

Disclaimer: Ucore Rare Metals Inc. is an advertorial member of InvestorIntel Corp.

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Canadian rare earth junior miners are starting to see increasing interest in their projects with off-take agreements and MOUs  signed recently. The pieces of a future European and USA vertically integrated ‘rare earths to magnets’ total supply chain are being put in place.

Last week it was announced that Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF) (“Search”) has entered into a non-binding MOU with USA Rare Earth LLC for the future delivery of a rare earth mineral concentrate supply containing 500 tpa of the “magnet” rare earths product, neodymium/praseodymium (NdPr). The 500 tonnes/year of contained NdPr is to come from future production at Search’s Deep Fox or Foxtrot deposits, located in Labrador, Canada.

Just the week before that Australia’s Vital Metals Limited (ASX: VML) announced a similar off-take deal from future production at Vital’s Nechalacho mine-site, in Canada’s Northwest Territory,  with Ucore Rare Metals Inc. which followed on from Vital’s off-take deal with Norwegian rare earth metals/alloys start-up, REEtec, as you can read here.

Search Minerals Inc. MOU for rare earths concentrate off-take supply to USA Rare Earth

The announcement stated:

“This MOU is part of Search’s and USA Rare Earth’s development plans to expand the collaboration to include discussions regarding separation, marketing and offtake of a portion of the future production at Deep Fox and Foxtrot. These discussions are in line with Search’s ambition to be an important contributor to the development of a North American Critical Material supply chain and USA Rare Earth’s strategy of Mine-to-Magnet production, and the development of a complete and sustainable North American rare earth supply chain.”

Search Minerals and USA Rare Earth to collaborate further

USA Rare Earth is supporting  Search’s efforts as it helps it to achieve its place in a  North American total supply chain. Once operational, USA Rare Earth’s NdFeB magnet plant has an initial target production of 2,000 tonnes annually of high-performance, neodymium-iron-boron type rare earth magnets, with the ability to scale production further based on growing market demand.

About Search Minerals

Search Minerals Inc. is an emerging rare earths miner with three properties in Labrador, Canada. The three are:

• The Port Hope Simpson (PHS) property (flagship) – Includes Foxtrot, Deep Fox, Silver Fox, Awesome Fox, and Fox Meadow deposits.
• The Henley Harbour Area in Southern Labrador.
• The Red Wine Complex located in Central Labrador, plus some newer acquisitions.

Search Minerals’ resources contain the permanent magnet rare earth elements (neodymium, praseodymium, dysprosium and terbium). Search is currently working on advancing the testing of its proprietary  Direct Extraction Process, developed with noted rare earth processing expert, Professor (UBC) David Dreisinger. The company also is advancing work on a resource upgrade, and on  a Preliminary Economic Assessment (“PEA”), which work is fully funded.

Search’s strategy

Search aims to deliver added shareholder value by leveraging the Foxtrot PEA (and soon the combined Deep Fox and Foxtrot PEA), using its  proprietary, lower cost, hydrometallurgical process, and continuing to explore its highly accessible district-scale opportunity, as foundations with which to forge strategic partnerships and additional offtake agreements. The  aim is to facilitate early monetization and more rapid delineation of additional resources intended to strengthen the Company’s position as a reliable, strategically located, low-cost producer.

Next steps

The next steps for Search include:

• A Q1 2022 PEA based on the combined Deep Fox and Foxtrot deposits. Search is already fully funded to achieve the PEA. More details here.
• Continued environmental baseline studies.
• Raising an 80 tonne bulk sample of deposit material for testing the magnetic separation demonstration plant due to be operational (subject to funding) in 2022.
• A full-scale rare earths hydrometallurgical processing plant to be under construction by the end of 2023 (subject to funding).

Demand for magnet rare earths is forecast to boom

Adamas Intelligence forecasts:

• “The value of global magnet rare earth oxide consumption will rise five–fold by 2030, from US$2.98 billion this year to US15.65 billion at end of the decade (2030).”
• “Global shortage of neodymium, praseodymium, and didymium oxide will collectively rise to 16,000 tonnes in 2030, an amount equal to roughly three–times Lynas Corporation’s annual output, or three–times MP Material’s annual output of neodymium and praseodymium oxide.”

Search Minerals now has a resource, a proprietary extraction process, a MOU for separation, and an MOU for off-take

Source: Search Minerals company presentation

Closing remarks

Search Minerals continues to make positive steps towards a production start-up, albeit still at the early stages. Search has achieved a resource, a PEA, has a propriety extraction technique, a separation technology MOU, and now an MOU for an off-take (not yet a binding agreement). The most recent MOU, for mined product, with USA Rare Earth, is a strong endorsement of Search Minerals’ Port Hope Simpson Project, notably the Deep Fox and Foxtrot deposits.

Search Minerals trades on a market cap of C$66 million. One to follow closely given that it is  now moving at a good pace in the right direction.

A key element for junior miners to demonstrate progress is to secure off-take agreements. This then typically leads to a greater degree of confidence that the company is credible as a supplier and that there is demand for its mined material.  Such progress attracts not only  investors but also potential project financiers. In the case of Vital Metals, the production of ore concentrates containing the key magnet rare earths neodymium & praseodymium (NdPr) that commenced in the summer of 2021 in the past year coincided with strong price gains  that confirm strong demand.

Neodymium 1 year price chart shows strong price gains the past year

Source: Trading Economics

Vital Metals MOU with Ucore 

Vital Metals Limited (ASX: VML) (“Vital”) recently announced news of signing a non-binding MOU with Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) for the supply of a mixed rare earth carbonate, beginning H1 2024. Ucore’s Alaska Strategic Metals’ Center, SMC, facility is planned to be commissioned in the first half of 2024 with an initial 2,000tpa total rare earth oxide (TREO) separation and purification capacity, ramping to at least 5,000t/year TREO by 2026. 

That means Ucore is looking to secure concentrate supply over 2.5 years in advance of when it is needed, showing the strength of demand for Western produced rare earths concentrate. It also means Vital has a growing off-take partner, making it a win-win relationship for both parties.

Vital Metals’ Managing Director Geoff Atkins stated: “Vital to commence product acceptance with Ucore in Q4 CY21 by supplying a sample of concentrate produced from its Nechalacho rare earths project in NWT, Canada…..The MOU will position Vital as a key supplier of rare earths in the North American market, building on its offtake agreement with REEtec in Europe……We are continuing to grow our operations in Canada and are well-placed to supply both geographies with the complete suite of rare earths.”

Ucore Chairman and CEO, Mr. Pat Ryan, P.Eng, stated: “This partnership with Vital is an integral step in the development of the Alaska SMC, as Ucore continues to cultivate relationships with potential like-minded upstream and downstream partners in the evolving Western world market; with the ultimate goal of ensuring that original equipment manufacturers transforming to an electrified economy continue to have access to a comprehensive North American raw material and finished goods supply chain.”

A reminder about Vital Metals

Vital is already mining ore at its Nechalacho Mine in Canada’s Northwest Territories (NWT), with commencement of ore processing, at Vital’s now under construction Saskatoon cracking and leaching facility, expected to begin in 2022. The Nechalacho Mine is a high grade, light rare earths (bastnaesite) project with a world-class resource of 94.7Mt at 1.46% TREO (measured, indicated and inferred). Nechalacho’s North T Zone hosts a high-grade resource of 101,000 tonnes at 9.01% LREO (2.2% NdPr). Vital’s strategy is to develop Nechalacho in two stages. Stage 1 of the operations focuses on the North T Zone resource, now in production, and is fully funded; Stage 2 will involve the development of the much larger Tardiff deposit.

Vital Metals’ Nechalacho rare earths project in the NWT’s of Canada – production of beneficiated ore commenced in June 2021

Source: Vital Metals Annual report – June 2021

Vital has successfully produced a beneficiated product which is to be further processed at the Company’s, now under construction, extraction facility in Saskatoon targeted to commence by late 2021 and with commercial production by mid-2022. Vital aims to produce a minimum of 5,000 tonnes of contained REO by 2025.

Vital’s off-take summary

• Binding off-take agreement with Norwegian company REEtec for Stage 1 production with the supply of 1,000t REO (ex-Cerium)/yr for an initial five-year period. This was recently increased to rare earth carbonate product containing a minimum of 750t NdPr, contained within 2,000t/year total rare earth oxides (TREO) with a maximum of 25% cerium. Amended agreement extends Vital’s product sales to REEtec to 2028 with option for an additional expanded 10-year agreement.
• Non-binding MOU with Ucore Rare Metals Inc. to sell to Ucore a minimum of 500t REO (ex-cerium)/year, commencing H1 2024. Vital to expand production to support a minimum of 50% of Ucore’s envisioned 5,000t TREO/yr processing capability (ie: 2,500t TREO/yr) by 2026.
  

The off-take agreements above combined, if completed, amount to 2,500t REO/yr (2,000 + 500) out of Vital’s production target to achieve “5,000 tonnes of contained REO by 2025″. It looks quite likely the Ucore off-take will  be increased later.

Vital Metals’ Nechalacho rare earths project is a simple open pit operation in northern Canada’s NWT’s

Source: Vital Metals Annual report – June 2021

Closing remarks

Vital is now the first rare earths producer in Canada and only the second in North America, from their Nechalacho rare earths mine, with commercial production set to be reached in mid-2022. Vital’s extraction facility in Saskatoon will be built and produce a rare earths concentrate from about June 2022. Vital has secured off-takes in Europe with REEtec and now with Ucore in North America. These companies will take Vital’s concentrate for further separation and purification.

Vital has agreed to acquire the Zeus heavy rare earth project (& 68% of the Kipawa Project) in Canada and it also owns a second light rare earths project in Tanzania.

Vital Metals Limited trades on a market cap of A$248 million and certainly looks to be a company with a very bright future in the non-Chinese total rare earth supply chain.