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Rare earths expert Alastair Neill on Vital Metals

“Overall Vital appears well on the way to producing commercial quantities of rare earth concentrate, a first in Canada.” — Alastair Neill, President, Critical Minerals Institute

Vital Metals Limited (ASX: VML | OTCQB: VTMXF) is an Australian listed company whose subsidiary, Cheetah Resources, is developing the Nechalacho project in the Northwest Territories of Canada. The deposit was previously owned by Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF), and they sold the rights in 2019 to Cheetah for the material 150 meters above sea level. Avalon retained the rights to the basal zone deposit which is underground. The deposit is reported to have 94.7 million tonnes at 1.46% REO (0.1% Nd/Pr cutoff). The mineral hosting the rare earths is bastnaesite, which is good as this mineral has been processing successfully for many years.

Vital raised A$45 million recently through a targeted share placement at A$0.04 per share. According to their press release the funds will be used for:

  • Finalisation of construction activities and undertake commissioning, ramp-up and operations at its Rare Earth Extraction Facility in Saskatoon, which will produce a rare earth carbonate product
  • Accelerated development of Tardiff deposit at Nechalacho, Canada, including mining studies

A strong balance sheet for ongoing working capital requirements

This project is the most advanced rare earth project currently in Canada. The initial focus is the North T zone which has a resource of 101,000 metric tonnes at 9.01% contained Total Rare Earth Oxides (TREO). Based on tests run at their Saskatoon rare earth extraction plant they can get a 75% recovery to produce a 43.7% concentrate. Based on this, the deposit would produce 6,825 metric tonnes of TREO which would contain 1,600 tonnes of Neodymium (Nd) and Praseodymium (Pr).  Tests have been done using X-ray Transmission (XRT) to sort the ore as the ore is hosted in quartz, which is white, and the rare earth mineral which is red. This is a simple way to upgrade the TREO content at site.

There is an offtake agreement with REEtec, a Norwegian company that is developing a new rare earth separation process. The agreement is for Vital to deliver 1,000 tonnes per year (TPY) of TREO (excluding Cerium (Ce)). Based on that Ce will be eliminated before shipping the concentrate to Norway. This is a step that has been done before by Molycorp in the 1980s. It reduces the material handling by 50% and obviously the size of downstream processing equipment. The North T zone will provide 3,400 of the 5,000 tonnes which means Cheetah will have to open the Basal zone to meet the balance of the supply contract.

Looking at today’s prices on Shanghai Metal Market (SMM) the separated value of this contract is over US$286 million. Assuming Vital gets 1/3 of the value for the concentrate this would produce revenues of over US$95 million of which US$92 million would come from Nd/Pr. Details of the agreement are not revealed so REEtec may be a toll arrangement which could produce more revenue for Vital though I expect the initial target would be to sell La, Nd and Pr in Europe as there are customers in Europe.

Interestingly the extraction plant is located beside the Saskatchewan Research Council (SRC) which has announced that they will be building a rare earth separation facility to process monazite by 2024. SRC has two rare earth experts from China on staff. SRC is also putting in an Nd/Pr metal facility which takes the oxide to the next level in the supply chain.

In addition to the Nechalacho project, Vital has a project in Tanzania called Wigu Hill. Vital has signed a project development and option agreement with Montero Mining & Exploration Ltd. (TSXV: MON), to acquire and develop the Wigu Hill project. The Wigu Hill project is a light rare earth element deposit and consists of a large carbonite complex with bastnaesite mineralization with a NI 43-101 Inferred resource estimate of 3.3Mt at 2.6% light REOs. This is also a bastnaesite mineral.

Overall Vital appears well on the way to producing commercial quantities of rare earth concentrate, a first in Canada. Questions that do need to be answered are what are the costs of operating an open pit mine in Northern Canada and the costs to transport material to Saskatoon.




Appia Rare Earths & Uranium by the numbers

Appia Rare Earths & Uranium Corp. (CSE: API | OTCQX: APAAF) recently reported results from its 2021 drilling program and work completed this year on its Alces Lake property in Northern Saskatchewan. While results are still pending from the 34 holes drilled at the recently renamed site Magnet Ridge (formerly Augier), other areas returned values as high as 14.95% TREO over 0.66 metres. This is high compared to most deposits. As of early July Appia has drilled over 14,000 metres in 2022 and plans to drill up to 20,000 metres this year, which should provide them with valuable information on the Alces Lake deposit. Magnet ridge is interesting as Appia has reported it outcrops at surface with a strike length of about 300 metres and a width of 175 metres, and has been penetrated to over 100 metres deep.

The mineral hosting the rare earths at Alces Lake is monazite. Monazite is regularly processed in China to produce rare earths, so making a concentrate and separating the rare earths is an established technology. In several jurisdictions, this could be a problem as monazite is typically associated with the radioactive elements Thorium (Th) and Uranium(U). However, it comes down to the old paradigm, location, location, location. Being situated in Saskatchewan, Appia is in a jurisdiction that understands radioactive materials and that they can be properly handled and stored, and in the case of uranium can be a valuable resource. The other advantage for Appia being in Saskatchewan is that the Saskatchewan Research Council is building a pilot plant for rare earth separation over the next 2 years. This will give Appia the ability to test their material locally, which is a significant advantage.

A 2020 Appia presentation indicates Neodymium (Nd) oxide levels of 17.4% and Praseodymium (Pr) oxide of 5.4% which gives a combined total of just under 23%. This is close to the Lynas levels from its Mt. Weld deposit, which Roskill’s Market Outlook 2015 indicates to be 23.8%. The Mountain Pass Mine, the deposit in California owned by MP Materials, has Nd+Pr levels at 16.3%. so they would have to process up to 50% more material to get the same revenue levels as Appia or Lynas. In addition, Appia’s report shows added value in Terbium (Tb) and Dysprosium (Dy). Looking at recent pricing in Shanghai Metal Markets (SMM), the Nd/Pr holds 87.8% of the total value. Terbium and Dysprosium add another 0.3%. This assumes that all the elements are sold, which typically is impossible, especially the Cerium, which is over 49% of the total volume. However, there may be markets in North America and possibly Europe for Cerium and Lanthanum. Their current price in China is $1.22 and $1.15 per kg respectively and freight can be a high proportion of the total cost of the product outside of Asia.

One way to look at the value of the deposit is to see what potential revenue can be generated from the four main magnetic elements (Neodymium, Praseodymium, Terbium and Dysprosium). Assuming the long range plans would be to build a 20,000 TPY plant, which is similar to the previous Molycorp output and just below the Lynas present output of around 22,000 TPY, their projected revenues would be around US$500 million per year. This assumes 90% recoveries and revenues only from Nd+Pr. Any sales of Cerium and Lanthanum would be minimal but an added bonus.

In addition, Appia has properties in the Elliot Lake area in Ontario. This is in the right area code as from the mid-late 1950s to 1990 there were 10 mines producing Uranium. Again location, location, location. Given the push for electric vehicles and the corresponding increase in electrical demand, countries are going to review their long term needs including Germany and China, and possibly India, and given alternative producing options nuclear is a cleaner way than coal or gas to produce electricity. Also given the current Russian situation more focus will come on nuclear and correspondingly Uranium. Thorium may also come into demand as it can reduce the operating temperature and thereby improve safety.

All things considered, Appia has an interesting opportunity and with the grades shown so far, and is poised to take the next steps to becoming a potential domestic producer of rare earths.




Leading rare earths junior Appia adds a new uranium claim block to their expanding asset portfolio

Two of the best-performing commodities in the past year have been the key rare earth magnet material blend, neodymium, praseodymium (NdPr), and the energy metal, uranium. Today’s company has established itself as a leading rare earths junior in Canada, but recently changed its name and expanded its uranium portfolio. This means investors get exposure to both the key magnet rare earths and also uranium. Even better, it controls 3 projects/properties.

The Company is Appia Rare Earths & Uranium Corp. (CSE: API | OTCQB: APAAF) (Appia) formerly known as Appia Energy, with its Alces Lake rare earths project and its newly acquired uranium mineral claim block (Otherside), as well as other uranium properties located in Northern Saskatchewan, Canada, and its Elliot Lake uranium and rare earths property in Ontario, Canada.

Appia’s very high-grade rare earths project at Alces Lake

For background on Appia’s rare earths projects you can read some past articles here which focus on Appia’s tremendous asset at Alces Lake, Canada which has the 2nd highest average rare earth’s grade in the world, at 16.65 wt% TREO. High-grade zones are up to 49 wt% TREO. The rare earths are hosted in favorable ‘monazite’ ore at or near surface spread over 27sq km of tenements. There is a 23-25% Critical Rare Earth Oxide (CREO) component, including neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb).

Appia’s 100% owned Alces Lake Project has the world’s second highest average grade of TREO

Source: Company presentation

Appia has access to use the Government funded Saskatchewan Research Council (SRC) processing facility in Saskatoon, Canada. Existing pilot facilities there(1,000 tpa capacity) have already optimized a monazite processing flow sheet for Appia. The SRC production-scale processing facility is expected to be partially operational in early 2023.

Appia plans a smaller surface and near-surface operation to start production with an open-pit scenario which is easier to permit and manage and should have a low CapEx/Opex.

Appia’s latest results include:

  • Drill results at Wilson North (Alces Lake) with average 17.5 wt% TREO over 9.38 metres with up to 37.9 wt% TREO.
  • High grade REE mineralization identified over an estimated 27 square kilometre area. Channel sample of 14.71 wt % TREO from Sweet Chili Heat and 11.94 wt % TREO from Diablo. 10.35 wt % TREO returned from grab sample at Zesty. 7.86 wt % TREO returned from grab sample along the Oldman River trend. New discovery of REEs with 2.27 wt % TREO grab sample from “Train Domain”. Elevated critical electronics metal, Gallium, values have also been returned for all samples enriched in TREO.
  • Promising Results from Initial Metallurgical Tests on a Composite Sample from Alces Lake. Laboratory heavy liquid separation tests recovered 95% of the total rare earth oxide (TREO). Appia President Frederick Kozak stated: “TREO recoveries and the percentage of TREO in concentrate are comparable to other producing global rare earths projects, supporting the potential for Alces Lake as a future monazite rare earths supply.”

Appia is waiting on further drilling core and channel sample assay results from the 2021 program. In terms of major near-term catalysts, Appia states: “Analysis of 2021 drilling and assays may lead to NI 43-101 report early 2022.”

Saskatchewan Uranium Properties

Appia recently announced that they significantly increased their uranium claims by acquiring the Otherside claim block of 27,291 contiguous hectares. Appia states: “The claims were staked on the basis of similar geological and geophysical signatures to the Company’s Loranger property as well as other known high-grade, large-tonnage uranium deposits in the Athabasca Basin including Fission Uranium Corp’s Triple R deposit, NexGen Energy’s Arrow deposits and others.”

Appia now owns 4 uranium properties/claims over a total of 69,344 hectares – Loranger, North Wollaston, Eastside, and Otherside. The properties are well located with proximity to infrastructure such as roads, highway, powerline, an airstrip as well as two uranium mills. The properties are ready to explore, with at or near-surface high-grade uranium, no sandstone cover, and negligible overburden.

Saskatchewan Uranium Properties – Loranger, North Wollaston, Eastside, and Otherside

Source: Company news January 10, 2022

Appia stated on January 10, 2022 that the next steps are: “Appia has commenced the permitting process for a winter drilling program on the Loranger property and anticipates commencement of drilling in approximately one month, depending on weather and permits. The Company is fully funded for this program.”

Elliot Lake (Ontario, Canada)

Appia also has a 100% interest in 12,545 hectares (31,000 acres), with rare earth element and uranium deposits over five mineralized zones in the Elliot Lake Camp, Ontario. The Resource details are shown in the table below.

Source: Company presentation

Closing remarks

Appia is becoming a significant rare earths and uranium junior. Appia now owns three very promising projects – Alces Lake (very high grade and critical rare earths), Saskatchewan Uranium Properties (Loranger, North Wollaston, Eastside, and Otherside), and Elliot Lake (rare earths & uranium).

Appia trades on a market cap of C$54 million.




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.




As Market Focus on Rare Earths Intensifies, Search Minerals Proceeds on Path to Production

Rare earth’s producing miners in the West are very rare as China dominates most of the rare earths production. Two exceptions are both trading with US billion-dollar market caps – They are MP Materials Corp. (NYSE: MP) (US$6.24 billion) and Lynas Rare Earths Limited (ASX: LYC) (US$3.92 billion), with  Today’s company trades on a market cap of just US$55 million.

[Note from the Publisher: The breaking news yesterday Energy Fuels and Neo Performance Materials Announce Contract Signing and Launch of Commercial Shipments of Rare Earth Product to Europe in Emerging U.S.-Based Rare Earth Supply Chain confirms these 2 companies as players in the rare earths supply chain. And Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) market cap is  roughly CAD$1B and Neo Performance Materials Inc. (TSX: NEO) is CAD$615M according to Yahoo Finance at 945 AM EST.)

The Company has a plan to be ready to build their full-scale rare earths processing plant by the end of 2023 and once complete become a North American rare earths producer (potentially by about 2025 provided all goes well). Prior to reaching full scale production, the Company plans to operate a demonstration plant in 2022.

The Company is Search Minerals Inc. (TSXV: SMY | OTCQB: SHCMF) (“Search”). Search controls properties with rare earths in three areas of Labrador, Canada. These are:

  • The Port Hope Simpson (PHS) property (flagship)
  • The Henley Harbour Area in Southern Labrador
  • The Red Wine Complex located in Central Labrador, plus some recently agreed acquisitions

Search Minerals flagship Port Hope Simpson (PHS) property includes Foxtrot, Deep Fox, Silver Fox, Awesome Fox, and Fox Meadow

Next steps (2021) at Port Hope Simpson – Foxtrot/Deep Fox updated PEA by Dec. 2021

The Preliminary Economic Assessment (PEA) of the Foxtrot Resource showed an estimated after-tax NPV10% of C$48 million and an after-tax IRR of 16.7% over a 14-year mine life. Start-up CapEx was estimated at C$152 million representing an after-tax payback of 4.4 years.

Search plans to do an updated PEA by December 2021 to include both Foxtrot and Deep Fox. Deep Fox will add to the existing PEA due to increasing the resource size and it has up to 15% higher grades than Foxtrot. The updated Foxtrot/Deep Fox PEA will double the past PEA production rate (increase production rate to 2,000 tonnes per day), increase recoveries from the optimized pilot plant process, increase revenue from higher grades at Deep Fox, extend mine life with material from Deep Fox and Foxtrot to a central processing facility, and decrease costs with reduced reagents. The impact of all of this is expected to potentially improve the PHS (Foxtrot/Deep Fox) Project economics significantly.

Beyond this, there is plenty of potential to further grow the Resource estimate and economics in the Feasibility Study, as Search also has 3 more advanced prospects (Silver Fox, Awesome Fox, and Fox Meadow) and 20+ potential prospects at PHS. Silver Fox has had some exciting “very high occurrence of zirconium and hafnium“. Project CapEx and OpEx should also be attractive as there is existing infrastructure, a scalable processing plan, technical simplicity, and open pit mining. A local workforce and Search’s patented mining process (lowers environmental and reagents costs) should also help reduce costs.

Search has already achieved a dedicated pilot plant, proving an ability to generate high purity, refinement-ready product at a low scale. Added to this there are MOUs signed with Saskatchewan Research Council and USA Rare Earth for further refining collaboration.

Next steps (2022, 2023) – Demonstration plant in 2022 and full-scale production plant construction ready to begin in late 2023

Search’s master plan includes building a demonstration plant in St Lewis in 2022 as well as an Environmental Impact Statement (EIS) for Foxtrot/Deep Fox.

In 2023 Search intends to complete their permitting, a BFS, and commence raising capital to build a full-scale processing plant commencing by the end of 2023. All going very well that can potentially lead to Search commencing rare earth production in 2025 or shortly thereafter.

It should be noted that in the mining industry, unless governments act to support and speed up the process, permitting and funding can drag on for some years. The good news here is the Canadian and US governments finally appear motivated to support (perhaps via faster permitting and low rate loans) a local rare earths supply chain.

In news announced on June 24, 2021, Search was selected to participate in the Government of Canada Accelerated Growth Service Initiative. This provides Search with “coordinated access to Government of Canada resources” as Search continues to move quickly to production.

Search Minerals Strategic Plan – 2021 to 2023

Source: Company presentation

Closing remarks

Search Minerals has big plans in the rare earths sector. The road to production for junior miners carries plenty of risks and usually involves stock dilution increasing the market cap, especially when raising initial project CapEx. One plus for Search Minerals is their Canadian location, as US and Canadian governments are showing increasing interest to help support rare earth projects.

If successful Search Minerals (US$55 million market cap) can begin to follow in the giant footsteps of Western rare earth majors MP Materials (US$6.24 billion) and Lynas Rare Earths (US$3.92 billion). As you can see successful Western rare earths miners command very significant size market caps.

Investors will need to ‘search’ for their patience cap and be prepared for a long ride, but the potential rewards for success can be excellent. Stay tuned.




Appia Increases Bought Deal Financing as it Ramps Up Rare Earths Drill Program

Appia Energy Corp. (CSE: API | OTCQB: APAAF) announced upsizing its previously announced bought-deal financing to $5 million that it expects to close later this month.

Appia plans to use part of the proceeds on a multi-million dollar summer exploration program on its Alces Lake property, which includes at least 5,000 meters of drilling and property-wide geophysical work. It also aims to upgrade the camp for winter use and access to extend the drilling season.

Appia is a Canadian-based mineral exploration company targeting the rare earth element (REE) and uranium sectors. The Company is currently focusing on delineating REE and uranium targets on its Alces Lake property, and plans to change its name to Appia Rare Earths & Uranium Corp.

The Alces Lake property is located in the Athabasca Basin of northern Saskatchewan, almost 30 kilometers northeast of Uranium City, which is a major centre in the area with good infrastructure including hydroelectric power, an airstrip, and an ice road connection.

The REE assays are reported as Total Rare Earth Oxides (TREO) and the Alces Lake property hosts some of the highest REE grades in the world and the second-highest average grade at 16.65% TREO.

Appia-Global-REE-Projects-Average-In-Situ-TREO-Grades

SOURCE:

Re-analyzing Previous Samples Confirm Gallium Mineralization

Since 2016, Appia has been working on the Alces Lake project and focused on uranium and the critical rare earth elements (CREE) including neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb).

Recently, Appia re-analyzed some historical samples with high-grade rare earth oxide (REO) results to determine the extent of gallium mineralization over the property and the correlation between REO and gallium.

The results returned gallium concentrations ranging from 0.01% to 0.104% Ga2O3 and a positive linear correlation between gallium and REO.

According to the Company, gallium is considered high-grade when the weight percentage Ga2O3 is greater than 0.010% and the combination of the high-grade REO system and gallium gives it the potential of becoming a world-class asset for critical metals.

Frederick Kozak, Appia’s President, commented, “The gallium concentrations on the Property are remarkable. Gallium was found in naturally occurring high-concentrations on the Property that far exceed current concentrations required for global production of gallium.”

Gallium is primarily used in electronics, semiconductors, and light-emitting diodes (LEDs) as it is able to turn electricity into light.

In March, the current price of high-grade gallium metal (99.99%) was US$376.71/kg compared to Nd at US$105/kg, Pr at US$74.95/kg, Dy at US$$424.95/kg, and Tb at US$1,468.02/kg. Being able to recover gallium would increase the ore value to Appia.

Targeting Ore from Deposit in Next 24 Months

Appia’s Alces Lake property has the REE hosted in coarse-grained monazite that is exposed at the surface in high-grade outcrops, making it economic to extract.

Monazite processing for REE extraction has a long history of economic viability and was started in the 1950s at the Steenkampskraal Mine in South Africa.

The company is following a low capital pathway to initial production by focusing on the potential of bulk mining the surface mineralization akin to a gravel pit operation and believes it could start production as early as 2023.

Appia would then use gravity and magnetic separation to create a concentrate to ship to a third-party plant and extraction facility for further processing.

Appia-Hig-Grade-Monazite-at-Surface

SOURCE:

Leveraging SRC’s Rare Earth Facility

In August 2020, the Saskatchewan government announced C$31 million in funding for a Rare Earths processing facility in Saskatoon that will be owned and operated by the Saskatchewan Research Council (SRC).

The SRC facility will be the first-of-its-kind in Canada and will establish an REE supply chain in Saskatchewan.

In February, Appia announced that bench-scale monazite processing and metallurgical testing had started at the SRC facility using sample materials from Appia’s Alces Lake property and SRC’s current Separation Pilot Plant.

The goal of the test is to process monazite-bearing rocks from the property to determine the ease of metallurgical processing and recovery of REE end products.

The testing results will be a factor in determining the economic viability of the project and are expected to take at least three months before a report is issued by SRC to Appia.

REE Solvent Extraction Process at the SRC Facility in Saskatoon, Saskatchewan

SRC-Rare Earth solvent extraction process2

SOURCE:

Shifting Towards a Green Economy

North American and European economies are focused on developing more environmentally friendly (“green”) economies by shifting to low-carbon power generation and renewable energy, including solar and wind, as well as the swing from fossil fuel to electric vehicles. REE play a critical role in these industries.

Last year, the governments of Ontario and Canada announced plans to each spend C$295 million to help Ford upgrade its assembly plant in Oakville, Ontario to start making electric vehicles.

But it is not just the green economy that requires these metals, they are critical in specialized alloys and magnets for airplanes, computer and military systems, high-speed transit, and satellites. A secure supply chain has become of strategic importance.

Governments Focusing on Critical Metals that Include REE

According to the Center for Strategic and International Studies, China produced approximately 85% of the world’s rare earth oxides and 90% of rare earth metals, alloys, and permanent magnets in 2019.  This dominance is a concern for other governments and businesses that want to ensure a stable supply of critical metals.

In 2018, the U.S. Secretary of the Interior published a list of 35 critical minerals or mineral material groups and voiced their concerns about their dependence on imports to meet the demand and supply chain risk due to the source concentration of just one or two countries.

The U.S. Defense Logistics Agency, a combat support agency in the U.S. Department of Defense that manages the global supply chain, currently stores 42 commodities, including chromium, cobalt, iridium, palladium, platinum, and zinc, with a current market value of over $1.1 billion.

In March, the rare earth’s and critical minerals sectors received another boost as the Canadian government unveiled its “Critical Minerals” list that included 31 minerals the government considers “essential to Canada’s economic security, required for Canada’s transition to a low-carbon economy, and a sustainable source of critical minerals for our partners.

The mineral list was comprised of base metals, battery metals, energy metals, and other elements, including aluminum, cobalt, copper, gallium, lithium, nickel, niobium, REE, uranium, and zinc.

The government of Canada wants Canadian mining to become a global leader and supplier of choice and plans to support Canadian critical mineral projects with policy development, coordinate international engagements, and strengthen research & development in the sector.

Canada’s list reaffirms its alignment with the U.S. on its list of “Minerals Deemed Critical to U.S. National Security and the Economy” and Canada’s commitment to a “critical minerals” cooperation agreement that was initiated in 2019 and currently in the working-group phase.

Final thoughts

Appia’s planned financing should strengthen its Balance Sheet and fund its exploration plans for 2021.

In addition, Appia is not a one-trick pony as it holds exploration rights to 656 square km (162,104 acres) in Saskatchewan, including the Alces Lake, Eastside, Loranger, and North Wollaston properties, and over 125 square km (31,000 acres) of prospective REE and uranium deposits in the Elliot Lake area of Ontario.

If you think it’s time to add some REE exposure to your portfolio, Appia might be a candidate to add to your watchlist.

Appia closed yesterday at C$0.65 with a Market Cap of C$63.4 million.




Chinese Dominance of Rare Earths Sets off Alarm Bells in Washington

In this episode of InvestorIntel’s Critical Minerals Corner with Jack Lifton, Jack talks about geopolitical issues with China and how regionalism is going to affect not just the interest and demand for rare earths, but for all critical minerals.

In this InvestorIntel video, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Jack went on to say that the Chinese dominance of the rare earths space has set off alarm bells not just in the US but also in EU and Canada. “I see the security of the supply of critical materials becoming a regional issue in this world,” he added. Jack highlighted that Canada is going ahead faster than the US in the critical materials space by developing several rare earths deposits for production and building the first full-scale rare earths separation plant in Saskatchewan.

To watch the full video, click here




Jack Lifton with Appia’s Tom Drivas and Frederick Kozak on the revival of the Canadian rare earths industry

In a recent InvestorIntel interview, Jack Lifton spoke with Tom Drivas, CEO and Director of Appia Energy Corp. (CSE: API | OTCQB: APAAF) and Appia’s newly appointed President, Frederick Kozak about the Alces Lake Project that has some of the highest-grade monazite-based rare earths and gallium mineralization in the world.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Tom went on to say that Appia has started a bench-scale monazite processing and metallurgical testing at the Saskatchewan Research Council to produce a mixed REE carbonate from monazite-bearing rocks.

Monazites are rich in magnetic rare earths but are radioactive because of the presence of uranium and thorium. Jack pointed out that “Appia could be the only company in Canada which can address monazite as the feedstock.” He added that with SRC capable of handling the radioactivity “the world is going to see a revival of the Canadian rare earths industry but with a new emphasis on monazite.”

To watch the full interview, click here

About Appia Energy Corp.

Appia is a Canadian publicly-listed company in the uranium and rare earth element sectors. The Company is currently focusing on delineating high-grade critical rare earth elements (“REE”) and uranium on the Alces Lake property, as well as prospecting for high-grade uranium in the prolific Athabasca Basin on its Loranger, North Wollaston, and Eastside properties. The Company holds the surface rights to exploration for 65,601 hectares (162,104 acres) in Saskatchewan.

The Company also has a 100% interest (subject to a 1% Uranium Production Payment Royalty and a 1% Net Smelter Return Royalty on any precious or base metals payable, provided that the price of uranium is greater than US$130 per pound) in 12,545 hectares (31,000 acres), with rare earth element and uranium deposits over five mineralized zones in the Elliot Lake Camp, Ontario. The Camp historically produced over 300 million pounds of U3O8 and is the only Canadian camp that has had significant rare earth element (yttrium) production. The deposits are largely unconstrained along strike and down dip.

To learn more about Appia Energy Corp., click here

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




Appia appoints Frederick Kozak as President as they progress the Alces Lake high-grade rare earths monazite project

Appia Energy Corp.‘s (CSE: API | OTCQB: APAAF) (‘Appia’) stock price has been on a tremendous run the past year, up 364%, as shown below. Today I take a look at why the stock has done so well, and what’s next for Appia Energy, potentially soon to be renamed Appia Rare Earths & Uranium Corp. (retaining the same stock tickers).

Appia Energy Corp. 1 year stock price performance

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The reasons why Appia has had a great past year are multiple but would include:

  1. Rising prices for rare earths, and to a lesser degree uranium.
  2. Greater recognition by investors on Appia’s potential.
  3. Successful exploration by Appia on their Alces Lake project and progress towards next stage development.

Regarding higher rare earth prices, on March 3, 2021 Appia stated:

“In the oxide form, the Shanghai Metals Market quoted February 28 prices per kg in US$ are: Nd $105, up over 100% year over year (“YoY”), Pr $74.95 up over 18% in one month, Dy $424.95 up nearly 100% YoY, Tb $1468.02 up nearly 200% YoY. There is an unusually high concentration of gallium at Alces Lake compared with other deposits and the price of Gd Oxide increased by 18% in one month to $35.93.”

A lot of investors may not yet know about the surge in rare earth prices, but here at InvestorIntel, we have been warning for some time to expect higher prices for critical metals. This is because we are just at the beginning of a new era of renewable low carbon energy (wind, solar, nuclear) and electric vehicles (EVs), which all need critical metals.

This leads to the reason for Appia’s proposed name change. Appia Energy is focused on rare earths (Alces Lake Project) and uranium (Athabasca Basin uranium prospects).

Appia state the reason for the name change as:

“In order to better identify the Company’s focus on the Alces Lake Project and the Athabasca Basin uranium prospects. The Property hosts some of the highest-grade total and critical rare earth elements (“CREE”) and gallium mineralization in the world. CREE is defined here as those rare earth elements that are in short-supply and high-demand for use in permanent magnets and modern electronic applications such as electric vehicles and wind turbines, (i.e: neodymium (Nd), praseodymium (Pr) dysprosium (Dy), and terbium (Tb)).”

Appia’s Alces Lake Project (100% owned)

The Alces Lake Project is unique for its exceptional high grade rare earths (2nd highest globally with average grade 16.65 wt% TREO and 3.85 wt% CREO) hosted in the favorable monazite ore. Critical rare earth elements (‘CREE’) at the Alces Lake Project include neodymium (Nd), praseodymium (Pr) dysprosium (Dy), terbium (Tb). There is also considerable gallium (Ga). The property has huge potential exploration upside, over a 45 km regional trend, as less than 1% of the Property has been explored with diamond drilling.

Note: TREO is Total Rare Earth Oxides and CREO is Critical Rare Earth Oxides.

Appia Energy Corp.’s Alces Lake has the 2nd highest global average grade at 16.65 wt% TREO hosted in monazite ore (some super high grade zones shown below)

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The Alces Lake project area is 17,577 hectares and is 100% owned by Appia. The project is located close to an old mining camp with existing support services, such as transportation (15 km from the nearest trail), energy infrastructure (hydroelectric power), a 1,200 m airstrip that receives daily scheduled services and access to heavy equipment.

The Property is located in Saskatchewan, the same provincial jurisdiction that plans to develop a “first-of-its-kind” rare earth processing facility in Canada, scheduled to become operational in 2022. This means Appia may have the opportunity to fast track early stage production of rare earths, at a low CapEx. I wrote about that previously here. Appia state: “Appia would “ideally” consider a surface and near-surface operation to start production, smaller than open pit scenario, easier to permit and manage, potentially low CAPEX/OPEX.”

Appia’s goal is to maintain a small environmental foot-print with a possible low CapEx start and initially use the Saskatchewan Research Council Rare Earths Processing facility in Saskatoon, Saskatchewan

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What’s ahead for Appia Energy in 2021

Appia plans to continue to further rapidly develop their Alces Lake Project under newly appointed President Mr. Frederick Kozak. Mr Kozak is a highly experienced capital markets and resource executive with a background in geological engineering, business, and as an equities analyst at Canaccord Genuity & Haywood Securities. This boosts the team at Appia as they expand exploration and begin the next steps towards production.

During the Summer of 2021, Appia intend to drill in excess of 5,000 metres at their Alces Lake Project with a goal to further grow their rare earths resource, in particular, to potentially discover further high grade rare earth oxide occurrences. Appia has also commenced bench-scale metallurgical testing at the SRC facilities. The intent is to refine the extraction process to separate the rare earths oxide and ultimately produce Nd and Pr oxides, gallium oxide, as well as uranium oxide.

Appia also intend to further exploration for high-grade uranium in the prolific Athabasca Basin on Appia’s Loranger, North Wollaston, and Eastside properties.

Closing remarks

Appia Energy now has a new President, and if approved on May 18, 2021, will change its name to Appia Rare Earths & Uranium Corp.

After a blockbuster past year Appia is now positioning for a solid 2021. If things go well I would expect we would also see an upgrade from the CSE to the TSXV, and a further re-rating for Appia.




Beating the path down to become a “Vital” rare earths producer in 2021

Vital Metals Ltd. (ASX: VML) targeting to be the largest independent supplier of clean mixed rare earth feedstock outside of China. That’s a lofty goal, but absolutely necessary because China still counts for about 80% of the world’s rare earths production while only sourcing about 30% of their rare earths domestically. While the initial impact from Vital’s rare earths production may be small in the future supply-chain for rare earths, they are an important part of the global movement for the diversification of rare earths production and are an early entrant into a new supply chain. This has already been recognized with the contract that the company announced in late December 2020 for a binding term sheet signed with REEtec AS, (a Norwegian rare earths separation company) for supply of 1,000 tonnes rare earths oxide (ex-Cerium) per year for a period of 5 years. The supply can be increased up to 5,000 tonnes per year for a period of 10 years.

Vital Metals is on track to produce rare earth oxide in 2021.

That is the first thing you will read when you go to the company website and it is real and it is happening. The production will come from the company’s Canadian Nechalacho project in the Northwest Territories on Thor Lake, close to Yellowknife and near the edge of Great Slave Lake.

In fact, preparations are currently underway at the Nechalachco rare earths project to commence the production of rare earth oxide sometime around May 2021. Everything is on track to meet this production schedule as a result of years of previous work on the project (and previous owner’s expenditures of more than $100 million) and the design of the project parameters ensure early cash flow (and low capital costs) of a production stream that is highly desirable to end users.

The company has two shallow zones on the Nechalacho asset – the T Zone and the Tardiff Zone(s) as shown in the map below:

Vital is employing a very smart strategy – instead of developing the whole project all at once, they are going to first develop the smaller T Zone which will generate cash flow for further exploration and future development of the Tardiff Zones. Their strategy to develop the first mine in northern Canada requires less than A$20 million total capital cost for this first project (North-T, 100% interest), some of which can also be funded by future generated cash flow.

The company has been working towards 2021 production on the T Zone. Last year and into this year, the mining area saw site clearing above the planned pit, dewatering and geotechnical work to confirm the pit design and infrastructure construction for mining and production. Construction of the ice road to bring in the drilling rig and mining equipment has also commenced. We anticipate news in the near-term to confirm the timing of the arrival of mining fleet and delivery of the ore sorter at site. As reported today, at December 31, 2020 the company had approximately $6.1 million of cash and cash equivalents, so they should be well-funded through first production from Nechalacho.

Looking ahead, recall that on September 22, 2020, Vital announced a binding term sheet for the construction and operation of a rare earth extraction plant to produce a mixed rare earth carbonate product. The plant will be located adjacent to the Saskatchewan Research Council’s (SRC) planned separation plant which will be able to convert rare earth carbonate mixes to commercial grade rare earth oxides. Vital’s plant is expected to be operational in Q3-2021 and will use feedstock from Nechalachco– a second “customer” for the mining output. Most people do not know that the SRC has almost a decade of expertise in rare earths (associated with uranium mining in Saskatchewan) and recently announced the construction of a rare earth processing facility in Saskatchewan, the first of its kind in Canada.  The SRC facility is expected to be operational in late 2022.

The team at Vital are world experts in the global rare earth element arena including all necessary elements of mining, processing, geology and marketing and are recognized for this expertise. The devil really is in the details and Vital’s team has a cost and time effective strategy to deliver early production and cash flow. Remote locations require extensive planning and timing is everything as mining and processing equipment can only be delivered and setup during certain weather windows. Things can go wrong, but it appears that most contingencies have been accounted for. This is a key success factor

The global movement to diversification away from China as the global source of rare earth elements has been underway for a number of years. The world always knew that as technology developed, the rare earths would become more and more important, but it has become abundantly apparent that the development of electric vehicles in particular demands more rare earths and from more secure and friendly sources. Vital Minerals’ aim is to become a global player in the production of rare earths. Their expertise, projects and potential have put them squarely on this path and they will become a producer in 2021.