Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF) was one of the standout performers in 2021 delivering a return to investors of 219%, a 5.35x gain for those investors lucky enough to have bought in at the IPO on July 20, 2016 at C$1.20 per share. Neo Lithium is now trading at C$6.42 with the Zijin Mining takeover offer at C$6.50 a share having recently been approved by Neo Lithium shareholders.

Today’s article gives an update on Neo Lithium and mentions another company that has several things in common with Neo Lithium, meaning it could be the next success story.

An update on Neo Lithium

As announced on December 10, 2021 Neo Lithium shareholders approved the arrangement effectively selling their shares in Neo Lithium to China’s Zijin Mining Group at C$6.50 a share. 91.42% of shareholder votes were in favour of the transaction. The announcement stated: “Subject to obtaining all required approvals and satisfying all required conditions, the Transaction is expected to close in the first quarter of 2022…..Following closing of the Transaction, the Common Shares will be de-listed from the TSX Venture Exchange.” There is the option for investors to buy into China copper-gold miner Zijin Mining Group (SHA: 601899) (HK: 2899) if they wish to still have exposure to Neo Lithium’s prized 3Q Project, whose Environmental Impact Assessment (EIA) was recently approved by the Catamarca Government in Argentina.

Effectively this ends the story for investors in Neo Lithium. But there is a another ‘Neo’ to consider.

Neo Performance Materials Inc. (TSX: NEO) – The next ‘Neo’

While there is no doubt that Neo Lithium President & CEO, Dr. Waldo Perez, (who also discovered Lithium Americas Cauchari Project) and its CFO, Carlos Vincens, played a huge role in the success of Neo Lithium, there is another person of interest. And that is Neo Lithium Chairman Constantine Karayannopoulos, who served on the Neo Lithium Board from February 9, 2016. He is also the President and Chief Executive Officer of Neo Performance Materials Inc. (TSX: NEO). Neo Performance Materials returned shareholders a 49% gain in 2021 and offers investors a similar early stage (to get in) opportunity, albeit this time in rare earths processing and permanent magnets materials.

For investors who believe success breeds success (as I do), and who look to follow star performers then I suggest you take a closer look at Neo Performance Materials. The Company is unique in the way it is positioning itself as the only non-Chinese processor of rare earth materials into separated rare earth chemicals that are then used internally to produce rare earth fine chemicals, metals, alloys, and “bonded” rare earth permanent magnets. You can read more about Neo Performance Materials in my linked article below.

• Neo Performance Materials looks to expand capacity as it rides the tailwind of growing rare earth permanent magnet demand

In the above article global rare earths expert Jack Lifton quotes his view on Neo Performance Materials stating:

“Neo Performance Materials is today, the only Western company that is vertically integrated with the capability and commercial scale capacity to separate the rare earths, manufacture rare earth metals and alloys, and manufacture rare earth permanent magnets. It is the non-Chinese model for any venture seeking to enter or assemble a total rare earths permanent magnet supply chain.”

Closing remarks

The story on Neo Lithium is now closing with the successful takeover by Zijin Mining now in its final stages. Investors who were in early, since the IPO, made a very nice 5.35x gain, and in some cases even more if they followed me buying at the 2019 low around C$0.58 (see my article here) and selling recently above C$6.40 for a 11x gain.

Looking ahead I see some similarities between Neo Lithium and Neo Performance Materials. Both have top quality management and Constantine Karayannopoulos is involved in both. Both companies are leaders in their field, noting Neo Lithium in lithium and Neo Performance Materials in rare earths processing and production of valuable rare earth based end products. Finally, both are beneficiaries of the EV boom and the demand for EV related metals such as lithium and the rare earths, NdPr.

They say follow the money and that is true, but better still is to follow successful top tier management, especially if they have the tailwind of a winning trend.

In 2022 we say farewell to Neo Lithium and hello to Neo Performance Materials. It should be another great year for those companies related to the electric vehicle boom.

While the Biden Administration fixates on solving the port problem in the United States, China continues to dominate the Western world’s supplies of, when it comes to the bigger picture, critical metals and materials. Literally, at the same time the US government is trying to focus on the issues right in front of it that may disrupt Christmas (heaven forbid), Chinese companies continue to seek out and lock up more of the raw materials that will drive the future. In just the last few days, Zijin Mining Group Co., Ltd. launched a C$960 million takeover bid for Canadian domiciled Neo Lithium Corp. (TSXV: NLC | OTCQX: NTTHF), while Contemporary Amperex Technology Co. Limited (CATL), the world’s largest battery supplier and ironically already part owner of Neo Lithium, signed a battery supply deal with U.S. commercial EV maker, Electric Last Mile Solutions Inc. (NASDAQ: ELMS). Three weeks ago CATL made a C$377 million takeover bid for Canada’s Millennial Lithium Corp. (TSXV: ML). Zijin is no stranger to taking out Canadian mining companies having previously acquired Nevsun Resources (C$1.86 billion), Guyana Goldfields (C$323 million), and Continental Gold (C$1.4 billion), and those were just some of its Canadian targets.

From an investor’s perspective, I guess this takeover activity can be viewed as a good thing given that these Chinese entities are paying full value for their acquisitions. So you get your liquidity event and hopefully have made money to go off and find the next possible target. But it is disappointing to see the West talk the talk about our greener future but not walk the walk as our leaders appear to be completely oblivious as to how we’ll get there if we let China control all the raw materials. I will save that rant for another day. In the meantime let’s have a look at a company that could tick the boxes for a potential acquisition by the Chinese.

Of late it seems the flavour of the day is lithium but that isn’t the only critical material out there. The Chinese have long since cornered the market for rare earths but if no one is willing to stop them, or even slow them down, then why wouldn’t they continue to acquire everything the world will let them. One Canadian junior mining company that could fit the bill is Appia Rare Earths & Uranium Corp. (CSE: API | OTCQB: APAAF), or perhaps you know it by its former name Appia Energy Corp. but that was so yesterday (today is literally the first day trading under its new name). Appia is a Canadian publicly-listed company in the uranium and rare earth element sectors and is currently in its largest exploration and diamond drilling program in the Company’s history, focusing on delineating high grade critical rare earth elements, gallium, and uranium on its 100% owned Alces Lake property, as well as exploring for high-grade uranium, in the prolific Athabasca Basin, on its Loranger, North Wollaston, and Eastside properties. Appia has found some of the highest grade samples of neodymium rich monazite on its properties in Saskatchewan.

The Alces Lake discovery of an accessible extensive hard rock deposit of monazite is very important to the world’s demand for magnet rare earths. This is because Appia’s monazite is neodymium rich, which is the most desirable for the production of rare earth permanent magnets. Not only is it rich in neodymium (Nd) and praseodymium (Pr), but also contains 1% of xenotime, the best heavy rare earth bearing hard rock mineral. The good news is that yesterday the Company announced it has discovered new and previously unknown occurrences of massive and semi-massive monazite in the Wilson North area of Alces Lake. A total of 27 drill holes (2,460 m) have been completed at the Wilson-Richard-Charles-Bell zones (WRCB), with at least 27 holes (2,360 m) remaining. In total the Company has completed 61 drill holes (4,575 m) including drilling at Biotite Lake (13 holes – 685 m), Danny (7 holes – 430 m) and Sweet Chili Heat (14 holes – 995 m) with monazite occurrences identified in each area. One drill continues to test the continuity and depth extent of the WRCB zones, while the other moves across the property, exploring new drill targets, named Diablo and Oldman River.

Source

With assays pending for all 61 holes drilled to date in the 2021 program, it’s certainly exciting times for Appia. The Wilson North 21-WRC-015 drill hole showed monazite mineralization over 8.85 m from 15.74 m – 24.59 m. As noted above, three other locations also saw monazite occurrences. If the grades in this season’s drill holes match the world class grades previously announced things could get very interesting very quickly. The Company is well funded to complete this season’s drilling with plans to prepare an NI 43-101 report following the conclusion of the current exploration program later this year. With 107.6 million shares outstanding, the current market cap for Appia stands at roughly $82 million. That’s chump change given what some of these Chinese companies are throwing around for quality assets.

Keep in mind that for the last few years China has been buying monazite concentrates,  thrown off as residues from heavy mineral sands’ mining, from all over the world including, until recently, from the USA!  China bought 30,000 tonnes last year from Rio Tinto in Southern Africa; and up to another 20,000 tons from Indonesia, Brazil. It is logical to assume that China would have a great interest in a higher grade neodymium rich monazite deposit than Lynas’ Mt Weld especially since the Appia material has 1 percent xenotime, which is a higher grade of heavy rare earth rich, xenotime, than Lynas’ deposits at Mt Weld.

Appia may be on the cusp of an exciting future.