Calling Next-Generation Rare Earth Element Investors

AM: The best source for a sustained quantity of HREEs is Matamec Exploration Inc.’s HREE mineral-bearing deposit in Kipawa, Quebec. And the best bastnaesite deposit in the world outside of China is Molycorp Inc.’s (MCP:NYSE) Mountain Pass facility, which is a tremendous source of LREEs, although problems may exist there around permitting, environmental restrictions and energy and reagents costs.

TMR: Matamec is about to come out with a feasibility study. Would your mineralogy studies on the Kipawa deposit be included in that study?

AM: I imagine much of it may be based on that. I can speak for the REE industry when I say that we are anxiously awaiting the results of this study, which will be released September 4. This deposit is the best source for the heavy lanthanides and is one for which we’re able to obtain the quickest results.

TMR: Can Matamec make money just making a concentrate and not creating oxides?

AM: That’s something it has to figure out. I’m not an insider on Matamec, though I did commence the first REE exploration in Kipawa, Quebec, in 1985.

TMR: Tony Jr., can you comment further on Kipawa project economics?

TMJ: I am not knowledgeable on the Kipawa project economics but I agree with my father that geologically, the Kipawa deposit is very impressive. The textural properties of the Kipawa rocks and the abundance of several HREE minerals make Kipawa uniquely attractive.

TMR: If there were a crisis tomorrow―if, for example, China completely eliminated REE exports, what projects could reach production quickly?

AM: North America would need a domestic source. Although deposits outside of North America could be suppliers, that could be a problem in that a ship carrying critical source concentrate across the ocean may not make it to North American shores. But if we’re in critical need, economics are no longer as important. If you need it, you pay for it. We’ve got sources in the United States, and we’ve got sources in Canada. To draw a historical parallel, during the beginning of World War II, the U.S. desperately needed quartz, which was used in military submarines. North America was getting all of its quartz crystals from Brazil. Brazil had always transported quartz crystals to the U.S. by ship, until U-boats began to bombard the ships. So the U.S. government supported Bell Labs in developing an immediate technique to synthesize high-purity, optical-quality quartz. That became the basis of all the quartz that’s used nowadays.

TMR: Tony Jr., to expand on this scenario, which companies other than Matamec are currently furthest along in developing North American REE projects?

TMJ: The companies furthest along in developing North American REE projects are clearly led by Molycorp. Molycorp holds an existing REE mine in Mountain Pass, CA and, as I understand it, is currently working on process developments and permitting to move toward production. Also, Rare Element Resources Ltd. (RES:TSX; REE:NYSE.MKT) is well on its way toward developing its Bear Lodge, Wyoming deposit. But, these projects are chiefly dominated by the LREEs. For HREE’s, other than Matamec, Ucore is probably the furthest along in developing its Bokan Mountain, Alaska deposit.

TMR: What do you make of Ucore Rare Metals Inc.’s Bokan Mountain project?

AM: It’s made up of very interesting minerals. Many are fine grain and complex, made up of several different minerals that cannot be concentrated independently; a multi-mineral concentrate must be treated chemically in order to process the multi-mineral concentrate. The chemical treatment and the costs involved at the final stages of chemical processing are important factors.

TMR: Does Ucore’s relationship with the Department of Defense give it a leg up?

AM: It should, because the project is in the U.S. There are some very interesting heavy lanthanide minerals at that site. They’re fine grain, inextricably associated with quartz and other gang material that has to be removed. Crushing costs will be expensive, and it will be difficult to come up with an independent mineral concentrate. Ucore could probably do a good job by chemically processing a multimineral concentrate. And Bokan Mountain’s logistics are excellent. The deposit is less than a kilometer uphill from the shores. You could fill up a ship with concentrate with ease.

TMR: Some analysts estimate that, at current rates of consumption, China’s supply of HREEs could evaporate within 15 years. Does that seem realistic to you?

AM: It’s hard to tell. China has a tremendous source in the Bayan Obo mining district. It also has a good source of LREEs in Mianning, Sichuan. I did a detailed field and laboratory study there in 1994, so I’m very familiar with this bastnaesite deposit. I can tell you a lot about the nature of the South China clays in the laboratory but not about how long they’re going to last. Are they going to be allowed to mine South China clays and put up with the problems that exist? Will any other continent be allowed to process South China clay-type deposits without affecting the environment and while keeping the prices down?

TMR: Is permitting strictly an environmental issue?

Pages: 1 2 3

Leave a Reply

Your email address will not be published. Required fields are marked *