Changing the destiny of ETRs in the West
Currently, China has a virtual stranglehold on rare earth elements, but this Canadian company is poised to capitalize on the downstream value of processing the REEs it extracts.
Water purification by electrodialysis. Diagnose diseases with MRIs. Feeding more people with better fertilizers. Reducing emissions through wind turbines and electric vehicles.
These technologies all have the potential to improve life on Earth. And all of them require a reliable supply of rare earth elements (REE). But rare-earth elements are…rare, in that they’re hard to get and in high demand.
Which country has the most rare earth elements?
With 60% of global REE mining production concentrated in China, the supply chain to North America and other regions is far from secure as China accounts for over 85% of processing.
Defense Metals Corp. (DEFN: TSX.V; DFMTF: OTCQB; 35D: FSE) hopes that its Wicheeda project, 100% owned in British Columbia, Canada, will help correct this imbalance.
Wicheeda produced a robust 2021 PEA (preliminary economic assessment) that demonstrated an after-tax net present value ([email protected]%) of C$517 million. The project’s 43-101 Technical Report shows an Indicated Resource of 5 million tonnes at 2.95% TREO (Total Rare Earth Oxide) and an Inferred Resource of 29.5 million tonnes, averaging 1.83% TREO calculated from 4,000 meters of drilling.
Streetwise caught up recently appointed Defense Metals president Dr. Luisa Moreno, who is a physical engineer and holds a doctorate in materials science and mechanics. Moreno notes that the PEA does not include results from an additional 5,300 meter drill program completed in 2021. “We are confident that this will increase our measured and indicated resources,” Moreno said. The significant rise in REE spot prices and expected demand are additional positive indicators for the company and the REE industry as a whole.
China’s REE are a ‘ticking time bomb’
The U.S. government took note of the imbalance in access to elements and on Tuesday announced a $35 million grant from the Department of Defense (MP: NYSE) to separate and process REE at its Mountain Pass, California facility. MP Materials will also announce another $700 million investment to create more than 350 jobs in the permanent magnet industry by 2024.
Rare-earth minerals are often used in weapons research and in F-35 jet and precision-guided munitions, and they are also used to make permanent magnet motors for electric vehicles that would be essential to convert the Pentagon’s fleet of zero-emission non-tactical vehicles. , said Reuters.
Having most of the ETR coming from China is a “ticking time bomb,” said Bob Moriarty of 321Gold.
“If the governments of Canada and the United States do not agree, the lack of domestic REE will destroy…electric vehicle manufacturing in the West. We must act quickly. »
—Bob Moriarty, 321 Gold
“You could say China has a stranglehold on REEs, just like it did with microchips,” Moriarty said. “If the governments of Canada and the United States do not agree, the lack of domestic REE will destroy…electric vehicle manufacturing in the West. We must act quickly. »
Defense Metals said it plans to produce 25,000 tonnes of rare earth oxides per year at Wicheeda, about 10% of current global production.
As the United States officially joins the Paris Agreement on the environment, a editorial of The Hill called for a “Marshall Plan-wide initiative” for critical minerals.
“We need greater inter-agency collaboration in Washington, expanded education on sourcing ‘tech metals’ to achieve the 21st century green industrial revolution, and ultimately investment increased from policy makers to ensure industry players can make the dream a reality,” the editorial said.
Are ETRs a good investment?
Moreno notes that of the more than 200 minerals known to contain rare earths, only a handful are currently known to be economically viable from a processing perspective. Two of them – monazite and bastnaesite – are particularly rich in rare earths and occur mainly in Wicheeda.
Defense Metals also has an edge in processing. First, the quality of the ore it plans to extract. The average ore grade at Wicheeda is 2.33% TREO. “Because we have coarse-grained REE minerals with a high REE metal content, we can go down to about 40% TREO through direct flotation,” Moreno said. “Other REE deposits of similar quality can only be upgraded to 10% or 15% TREO. This gives us the advantage of being able to process our ore at a much lower cost than others.
Second, a memorandum of understanding Defense Metals signed in August 2021 with Sinosteel, one of China’s leading processors of REE. Byron King, who follows the REE sector closely (and is a shareholder of Defense Metals) explained that “While we all recognize the importance of breaking free from China’s dominance in the REE sector – both l “mining and processing – we also have to recognize that China is where the expertise lives. If you want to learn to dance, you need to hire a dance teacher. Sinosteel can be that teacher for defense metals.”
Moreno is even bolder: “Our goal is to progressively become a vertically integrated REE supplier, from mining to processing, through separation and, potentially, delivery of the metal itself. This will allow us to retain more of the value of the goods we take out of the ground. »
The strategy of going that far upstream is key, King said. “The end users of these rare earths have very specific requirements. Meeting these needs starts at the mouth of the mine, but taking the rock and turning it into the highest value material you can get is crucial.
defense metals recent addition of John Goode, P.Eng., to its advisory board deepens the firm’s treatment acumen. “John has already contributed significantly to the development of metallurgical processes at Wicheeda, and we expect him to continue to bring his considerable expertise to add value to the project as we move towards a pre-feasibility study,” said said Moreno. Goode’s considerable processing expertise extends from work in Canada and the United States to China, Australia and Russia.
Wicheeda ready to supply more catalysts
Wicheeda, located 80 kilometers from Prince George, British Columbia, benefits from an abundant infrastructure. Highways, forest roads, gas and electricity lines facilitate operations. Nearby air, rail and port connections provide transportation options. “All of these factors are in our favor, compared to other REE projects in more northern locations, such as Quebec and the Northwest Territories,” Moreno said. Finally, it is in a friendly mining jurisdiction, with a skilled workforce at your fingertips.
This workforce will be kept busy with increased drilling efforts, both field and expansion, which Defense Metals has planned for 2022. The company is also awaiting assay results from the 29-year drill program. holes over 5,340 meters which were not included in the PEA. These results are expected in early 2022.
Defense Metals’ market capitalization is approximately $40 million. It has about 161 million shares outstanding, or about 200 million with warrants and options. About 5% of the company is owned by management and insiders.
1) Diane Fraser compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own shares in the following companies mentioned in the article: None. She and her household members are paid by the following companies mentioned in this article: None. His company has financial relationships with the following companies mentioned in this article: None.
2) Byron King Disclosures: I, or members of my immediate family or relatives, own securities of the following companies mentioned in this article: Defense Metals; the shares were purchased on the open market. I am personally, or members of my immediate family or relatives are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. I do not offer personal investment advice to anyone.
3) The following companies mentioned in this article are sponsors of the Streetwise Reports billboard: Defense Metals Corp. Click here for important information on referral fees. The information provided above is provided for informational purposes only and does not constitute a recommendation to buy or sell any securities.
4) The article does not constitute investment advice. Each reader is encouraged to consult their financial professional and any action taken by a reader as a result of the information presented here is their own responsibility. By opening this page, each reader accepts and consents to the full Streetwise Reports Terms of Service and Legal Notice. This article is not an investment solicitation. Streetwise Reports does not provide general or specific investment advice and information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the activities, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or their family members, as well as those interviewed for articles and interviews on the site, may take a long or short position in the titles mentioned. Directors, officers, employees or members of their immediate family are prohibited from making purchases and/or sales of such securities on the open market or otherwise from the time of the decision to publish an article until three days working days after the publication of the article. The foregoing prohibition does not apply to articles which, in substance, merely reproduce previously published company press releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Defense Metals Corp., a company mentioned in this article.