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A Canadian REE powerhouse?

July 24th, 2014

It might be closer than you think, says the Canadian Rare Earth Elements Network

by Greg Klein

Now here’s an ambitious goal—for Canada to supply 20% of the world’s critical REEs by 2018. That’s the target set by the Canadian Rare Earth Elements Network, at the impetus of exploration companies among its membership. While CREEN chairperson Ian London concedes the plan might not be fulfilled so soon, he emphasizes that Canada has about a third of the non-Chinese world’s advanced rare earths projects, more than a third of the world’s known critical rare earths resources and a greater degree of rare earths expertise than many people realize.

A Canadian REE powerhouse might be closer than you think, according to the Canadian Rare Earth Elements Network

The 2018 target was set a year ago, based on the fact that Canada has nine rare earths projects that have reached at least a preliminary economic assessment. “But if financing doesn’t happen, the projects aren’t going to proceed per the schedule,” London tells Even so, the nine projects comprise “one-third of the best REE opportunities in the world,” he maintains.

And, despite the near cut-throat competition of junior explorers, at least some of the companies holding those projects actually co-operate with each other. That was another ambitious CREEN goal, but one that’s already been achieved.

CREEN describes its membership as “mining companies, academia, government, research centres, consulting firms and other organizations that are working together to develop innovative solutions to the various challenges faced by this sector.”

“We had a technical workshop about a month ago where I convened a meeting of about 35 technical leaders from the prospective producers and consulting engineering firms,” London says. “When the technical leaders and their consultants, many of whom have worked on several projects, got talking, by the end of the day they identified about 21 areas on which they shared some common issues and short-listed five prospective research projects.”

No CEOs were present. “When you get engineers talking, without any sort of corporate protocol, they actually speak the same language. CREEN has a technical advisory committee and we structured it so you roll up your sleeves and examine some hypotheses. Then you find engineers and scientists like solving problems.”

A former president/CEO of Ontario Hydro International, London holds a degree in metallurgical engineering as well as an MBA. He’s also worked with several new technology and alternative energy companies.

A Canadian REE powerhouse might be closer than you think, according to the Canadian Rare Earth Elements Network

The multi-stage continuous flotation unit at the Saskatchewan Research Council’s pilot plant is “ideally suited for rare earths separation.”
(Photo: SRC)

“I’ve been in this sector for eight years and I’m amazed at the number of individuals working on rare earths-related process technologies or applications at different universities that nobody knows about. There’s a scientist here, or an engineer there, who’s working on a PhD and is moving forward. But there was no forum for them to get together.”

Rare earths expertise in Canada and elsewhere in the West is further ahead than commonly perceived, London argues. “But it’s disjointed. There are experts at different Canadian universities who I’m not sure have ever spoken to each other because they have different areas of specialization. One would be on beneficiation, one would be on hydrometallurgy, one would be on separation. By establishing CREEN, we gave them a platform so they could get together and we now have a common goal.”

Actual mining should inspire even greater interest, he says. “If you get into production, you now have a playground for academics. It’s nice to do studies, but they want something to work on.”

Rare earths processing is “more chemistry than it is metallurgy or traditional processing,” London adds. “But we have a lot of smart guys who are comfortable with metallurgy and chemistry.”

One CREEN member, the Saskatchewan Research Council, operates a Saskatoon pilot plant that it calls “one of the few centres in Canada with an emphasis on rare earth minerals.” SRC chief geoscientist Bryan Schreiner tells, “There are other labs across the country that can do rare earths work too, but we’re emphasizing that as a major component for our pilot plant.”

The facility is intended to develop new and improved methods for processing a surprising array of minerals including potash, uranium, gold, base metals, coal, oilsands and oil shale. “We built this very modular so we can reconfigure the components of the equipment and develop a different process plant depending on what the mineral is,” Schreiner explains. “In particular we have a continuous flotation machine that’s ideally suited for rare earths separation.”

A Canadian REE powerhouse might be closer than you think, according to the Canadian Rare Earth Elements Network

Ian London

London says Canada also benefits from “tremendous relationships around the world.” In 2012 Canada’s Metallurgy and Materials Society asked London to organize one of the world’s first international symposiums on rare earths processing. It received 44 papers from nine countries. “Last year we had 53 papers from 17 countries—10 from China,” he points out. “They’ve been published in a book. If you keep it at a technical level, people will talk. The rare metals sector tends to be market-driven—what your shares are worth, how much money you can raise. But we’re at the stage now where there are Indians working with the Chinese, with Canadians and Americans.”

This year’s symposium takes place at COM14 in Vancouver from September 28 to October 1.

As for China, it not only holds much of the world’s expertise but it’s often estimated to provide about 90% of global supply—or even 95% according to evidence heard by a Canadian parliamentary committee. Mining analyst Luisa Moreno attributes about 36% of the world’s resources to China, but they’re diminishing. Recent reports from that country, meanwhile, show no easing of export restrictions.

The two Western sources, Molycorp’s (NYE:MCP) Mountain Pass mine in California and Lynas’ Mount Weld in Australia, “are both struggling,” London says. “More importantly, they’re primarily light rare earths. We have a unique advantage in the amount of critical rare earths we have.”

“The world wants alternative sources of supply. What they’re also looking for is the brains to go along with it. The Chinese created hundreds of thousands of jobs around the industry because the world buys their products, their technology.”

But he sees a limit to vertical integration at home. “Canada’s not fooling itself into thinking we’re going to be a magnet-maker to the world. We can provide separated rare earths and further downstream processed metals, and let others focus their attention on refining it into magnetic alloys, or magnets or phosphors, and together we can have supply chains.”

Over the next three years CREEN’s near-term goal is to support opportunities to place Canada as a key rare earths producer. Looking three to 10 years ahead, the organization wants to encourage further technological development, downstream processing, new applications and highly qualified personnel.

“It’s a challenge, but it’s clearly an opportunity,” London says.

Read more about Canadian rare earths research.

Home Continent Advantage

April 4th, 2012

Quantum’s Nebraska Niobium Resource Project Will Reduce Foreign Dependence

By Ted Niles

That the US imports 100% of its niobium—indeed, that 85% of the world’s niobium is produced by just one Brazilian company—doesn’t inspire panic in the average person. While familiarity with the metal and its uses is not widespread, the US National Academy of Sciences has deemed it a “critical” metal, and the absence of a domestic producer troubles Washington. Particularly as worldwide demand is predicted to outstrip supply by 2018. Enter Quantum Rare Earth Developments TSXV:QRE, whose Elk Creek Project in Nebraska boasts America’s only NI 43-101-compliant niobium resource.

The 3,802-hectare property was acquired in 2010 by Quantum, which was quick to take advantage of the work carried out by Molycorp in the 1970s and 1980s. “They did over 150,000 feet of drilling,” reports Quantum President/CEO Peter Dickie. “Molycorp walked away from a lot of their exploration projects as they put their Mountain Pass Mine into production, and this was one of them.”

Quantum's Nebraska Niobium Resource Project Will Reduce Foreign Dependence

Niobium is both a strategic and a critical metal

Based on a reanalysis of Molycorp‘s historical work, Quantum released an initial inferred resource for the property in March 2011. The company undertook a drill program the same year—the first the site had seen in 25 years—which was used towards an updated estimate announced April 2, 2012. It reported indicated resources of 19.32 million tonnes grading 0.67% niobium and inferred resources of 83.29 million tonnes grading 0.63%, both at a 0.4% cutoff.

While the new resource reflects increases in tonnage and grade, Dickie notes, “We’re realizing that the more drilling we do, the [greater] likelihood we’re going to see improvement in not only overall tonnage but grade and category as well. If you look at our drill results, we had substantial intercepts of well over 1% material. Obviously, the more drilling we do in that vicinity, the more we’ll be able to elevate our resource and our grade.”

Niobium is used in small quantities to both strengthen and reduce the weight of steel. In the form of ferro-niobium it is used in the automotive, pipeline and construction industries. It is also used in superalloys by the aerospace and defense industries. It has been estimated that demand for the metal has grown at a 10% compound annual growth rate over the last 10 years and that future demand is likely to increase at the same rate.

As mentioned above, about 85% of world supply is produced by Companhia Brasileira de Metalurgia e Mineração. Anglo American’s Catalão Mine, also in Brazil, produces approximately 6%, while IAMGOLD’s TSX:IMG Quebec Niobec Mine produces most of the rest. Dickie points out that there is only one other North American niobium producer in the wings—Taseko’s TSX:TKO Aley project in BC. Aley has inferred resources of 159 million tonnes grading 0.43%, at a 0.2% cutoff. “Obviously our grade and tonnage is quite significant from a North American standpoint,” Dickie says. “Elk Creek is likely the largest deposit with that kind of grade. And it’s the only one we know of in the US, where niobium is considered a strategic metal and subject to potential stockpiling.”

Quantum will next undertake a preliminary economic assessment. A metallurgical test program is ongoing, and Dickie hopes to see “some concrete numbers within the next few months. [The PEA] is about a four- to six-month process following receipt of the metallurgy.”

Our indicated resource contains just under 129 million kilograms of niobium. Our inferred resource has another 523 million kilograms. The current price for niobium in the form of ferro-niobium is about $43 a kilogram. So the numbers are very big on this —Peter Dickie

Quantum intends taking Elk Creek to production, but between the resource and the infrastructural advantages offered by the American heartland, Dickie admits that the project now entices larger companies. “We have had some discussions ourselves and been made aware of others who have had their eyes on this project. I would suspect that one or more may act on it prior to us getting into production.” He adds, “Potentially we’ll have a partner involved by the time we start drilling on this project again.”

While it has been a difficult year for mining equities generally, Dickie believes Quantum is undervalued more as a consequence of niobium’s obscurity. He explains, “Close to 90% of the market comes from a private mine in Brazil. A lot of the transactions are dealt with between a private company and the end user, so they’re never reported. It’s not as widely known a market as other commodities.”

He concludes, “It’s not normally done on smaller-market materials such as niobium, but certainly if you want to look at the in situ value at [Elk Creek], it’s very valuable. Our indicated resource contains just under 129 million kilograms of niobium. Our inferred resource has another 523 million kilograms. The current price for niobium in the form of ferro-niobium is about $43 a kilogram. So the numbers are very big on this.”

At press time, Quantum had 86 million shares trading at $0.205 for a market cap of $17.6 million. Its other projects include the Archie Lake REE property in Saskatchewan and the Jungle Well and Laverton rare earth projects in Western Australia.

REE Dragon

February 7th, 2012

Western Rare Earths Discoveries May Just Feed China

By Ted Niles

Between the increasing demand for rare earth elements (REEs) to supply global technological advance, and the 2010 reductions of export quotas by China, the non-Chinese world faces a global supply shortage. This situation presents opportunities but also challenges. The speakers at last week’s Technology Metals Summit 2012 in Toronto stressed two of those challenges in particular: the absence of a supply chain for REEs outside China and the considerable economic challenges to any company starting a rare earths mine given that absence.

China produces 97% of the world’s REEs. The obstacles facing a non-Chinese REE industry stem from the inordinate complexities of rare earths themselves. Gold, silver or copper are metals that require only a relatively simple process of refinement before they are sold into the market. But the process which any of the 17 chemical elements called rare earths must undergo before their end use in, say, one’s iPod, requires a degree of scientific and technological expertise unlikely to be found in any roomful of scientists and engineers. Unless, of course, that room is in China. This because since the Chinese began serious production of cheap rare earths in the late 1980s, the rest of the world has all but abandoned its interest in them as anything but an end user. This was conspicuously signalled by the 2002 closure of the largest US rare earths producer, Molycorp’s Mountain Pass REE mine.

Western Rare Earths Discoveries May Just Feed China

Gary Billingsley, Great Western Minerals TSXV:GWG Executive Chairman, explains the impact: “When you’re talking about rare earths outside of China, you have to have something to sell. If you’re a permanent magnet manufacturer for instance, the rare-earth mine all by itself really doesn’t have a saleable product you can use. You need a bunch of other steps in that supply chain, like separation and metal-making and alloying in order to produce a product that’s saleable to generate revenue. And right now, outside of China, there’s precious little of that supply chain.”

And so, China is not only the largest producer, but the largest consumer of rare earths. The problem facing a non-Chinese rare-earths industry is not one just of supply but of demand. Thus a rare earths mining company’s job is far from over after the physical extraction of the material from the ground. “If you’re going to be bringing a project onstream,” Constantine Karayannopoulos emphasizes, “you should have a business plan that addresses the biggest market, China.” The CEO of Neo Material Technologies TSX:NEM continues, “Ultimately, the projects that will succeed will have to demonstrate that they will be able to sell what they can produce, and they’ll have to do it at a reasonable cost.”

The advantages China has enjoyed in this respect have been tremendous. Not to mention unique. Inner Mongolia’s Bayan Obo mine, Karayannopoulos points out, is often mistakenly described as a rare earths mine. But while it does host the world’s largest REE deposit, Bayan Obo’s primary function is as an iron-ore mine, and the rare earths are a byproduct of the tailings. “No non-Chinese mine can really compete against Bayan Obo production, where the rare earths are essentially a free extra,” Founding Editor Tracy Weslosky adds. “If China wanted to, it could sell it at any price. But I don’t see them selling.”

The vast majority of speakers at the Summit were in agreement on this point—that China is, in Karayannopoulos’ phrase, “the most brilliantly self-interested economic power in the world.” While not hostile to the world outside its borders, the burgeoning superpower is decidedly unconcerned with it. Speaking of China’s export quotas, Hedrick Consultants Inc Founder James Hedrick remarks, “I think that as economies [recover], and as demand [for REEs] in the world goes up, China will continue cutting back on supply to coerce people to move their IP and their plants and their technology to China to create more jobs for their people. Their economy and population is growing, so they have a lot of jobs to provide.”

Unless you’re willing to build a total supply chain outside China, all you’re doing is supplying China. How will we benefit, if China maintains its lock on demand? —Jack Lifton

Jack Lifton adds, “Unless you’re willing to build a total supply chain outside China, all you’re doing is supplying China.” The Founding Principal of Technology Metals Research declares, “How will we benefit if China maintains its lock on demand? The Chinese state is not making investments here to make a profit. They don’t want to build dollars to buy Bentleys. What they want is materials to go back to China.”

Lifton continues, “The US doesn’t have an industrial policy. That’s not the way they think in China. I think we’re in an extremely competitive situation, and I think we are pretending that this will all go away. That the market will correct and everything will go back to the way it was. It won’t, because we now have the largest corporation in the history of the world—China Inc—buying the world’s resources for internal development. The Chinese have not been imperialist-expansionist for 1,000 years. They want to be left alone. They don’t want your land; they want you to stay away from theirs. It’s not at our expense, yet.”

While Lifton’s remarks might strike some as alarmist, the general feeling of the Summit suggested that building a non-Chinese rare-earths industry will be troublesome, at best. With the prospect of near-term and significant reduction of rare earths from China, the race is on for juniors to discover and delineate economically feasible deposits to feed a technology sector that, over the last ten years, has become highly dependent upon them. And the question still remains, “Will investors step up to the plate?” Karayannopoulos answers, “There’s no question that consumers around the world are making the right noises about supporting production outside of China. Ultimately, they’ll have to put their money on the table if they want to see this happen. Talk is cheap. Some of these projects have a price tag of around $1 billion. There are very few people that have the longer-term confidence in prices and demand.”

A Rare Summit Meeting

January 31st, 2012

Toronto Hosts Technology Metals Summit 2012

By Ted Niles

On February 1 and 2 Rare Earth World will host the Technology Metals Summit 2012. Co-produced by Pro-Edge Consultants Inc and Market Edge Media, the summit seeks to “bring the industry and investors together for a better understanding of rare earths and critical metals.” Tracy Weslosky, Chairman of REE World and CEO of Pro-Edge, speaks with about the event.

Q: Tell us about the Technology Metals Summit 2012 and how it came to be.

A: I looked around at the International Rare Earth Summit in Pittsburgh last winter and thought, ‘If we’re going to be in Pittsburgh, why are we not in Toronto?’

Toronto Hosts Technology Metals Summit 2012

The idea for the Technology Metals Summit is to inspire interest in rare earths, create real debate and educate industry investors. Until now, there wasn’t a forum for this. We’ve got some of the smartest, rare earths über-geeks on the planet coming together here. For instance, we have Dudley Kingsnorth. He’s a rock-and-roll star in the rare earth industry. From Lynas Corporation to Molycorp, every rare-earth company on the planet quotes Dudley Kingsnorth in their power points. They often disagree with him but always quote him. We’re going to be doing a live feed on Thursday morning at 8am where he’s going to be giving us his forecast for 2016 and 2020 on the Chinese export quotas and what they’re going to mean to the industry. You’ll hear it first at our event.

Q: What makes rare earth elements so important?

A: The rare earths are a moderately abundant group of 17 elements comprising 15 lanthanides, scandium and yttrium. This group of metals was so shrouded in complexity that it took 151 years from the discovery of the first rare earth element in 1794 to the final element discovered in 1945. I think James Hedrick put it best when he said, “Rare earths are the economic and technologic foundation of a safe and secure nation. To possess them imparts independence, immunity to coercion and the tools to invoke scientific advancement.”

I think what everyone is missing in the rare-earths sector—the one thing that investors need to understand about the rare-earth industry that they’re missing—is that the current pace of technological change in the world requires rare earth elements. I believe that supply is on an upward trend, but that demand is likely to be exponential over the next few decades. There are no producers outside of China. A common misconception is that we don’t have to worry because we have suppliers outside of China. We don’t. Lynas is fighting to become a producer, and Molycorp are only light rare earths.

We basically have the entire industry here —Tracy Weslosky

Q: Given our heavy dependence on Chinese production of rare earths and that country’s recent severe reduction of exports, what is the outlook for the industry moving forward?

A: We were all upset for many years over being dependent on the Middle East for oil. We are presently completely dependent on the Chinese for many of our green energy, clean technology applications and for a lot of our military applications. This is one of the reasons rare earths are also known as critical metals. China supplies the resource we need to have a competitive advantage moving forward. You want to drive a hybrid car, you’re going to be dependent on the Chinese. What will it take for a rare-earth project outside of China to compete successfully with the various Chinese mines currently in production? Luck. No non-Chinese mine can really compete against Bayan Obo production, where the rare earths are a byproduct of iron-ore niobium production, essentially a free extra. If China wanted to sell this, it could sell it at any price.

The Technology Metals Summit is so important for educating the industry and investors because the industry is evolving so quickly, and there’s so much misinformation. There are going to be issues addressed at this event that most people don’t even consider. Items like thorium and metallurgical extraction processes. There are very few people on the planet with experience of heavy rare-earths metallurgical extraction processes, and we have one of the senior experts in the world coming over from Russia. Very few people have these skills, so the problem the industry is facing is a shortage of talent. The idea that we want to produce is great but to actually find the people that can do it? We stopped producing rare earths in North America in the early 1980s. There’s six people over 70 who are experts that are available in North America.

Q: What can attendees of the Technology Metals Summit expect to take away from it?

A: My goal in this event is to inspire interest, create debate and educate the industry and investors on rare earths, rare metals and critical metals. This is one of the most intensively competitive sectors in the resource sector bar none. The race to produce is the number one issue. We have over 60 CEOs that will be speaking on panels. We basically have the entire industry here. The Technology Metals Summit will make for a very knowledgeable and savvy investor in this very exciting market.

Ms Weslosky is also the Senior Editor of

Heavy Potential

July 6th, 2011

Elissa Has Found Rare Earths in Nevada

By Ted Niles

Elissa Resources’ motto “Security in discovery” has a dual meaning. The first is the suggestion that company shares are a wise investment. But given that Elissa’s focus is on those mysterious but essential minerals known as rare earths, its secondary meaning, national security, makes it particularly apropos. “Rare earths are very important economically,” says President and CEO Paul McKenzie, “particularly to economies as big as the United States. And those counties are not producing rare earths.”

China is: about 97% of them. And China, as a consequence of new environmental regulations and quotas, has reduced its rare earths exports by about 70%. McKenzie explains the consequences, “It causes the price of rare earths to skyrocket. And they’ve steadily done so over the past couple of years; in the last six months alone they’re up 300% to 500%. And it scares the hell out of other countries because they cannot have a steady source of rare earths, to the point where the United States is strongly considering stockpiling them.”

Elissa Has Found Rare Earths in Nevada

There are 17 rare earth elements, and their uses defy enumeration. “Pretty much everything we use in this modern world is entirely dependent upon them,” McKenzie says, “from computers to cell phones to hybrid cars, wind generation, lasers, fluorescent light bulbs.” He adds, “There are military applications, so the US does not want to get caught short.” This is where Elissa’s Thor Project comes in: “We’re basically trying to create domestic sources in the United States of rare earths.”

Thor comprises 183 contiguous claims, totalling 1,481 hectares, located on the Nevada side of the Mojave Desert Region, about 120 kilometres south of Las Vegas. Work to date has consisted of surface mapping, satellite imagery analysis, channel sampling and geochemical work, with sample results as high as 10.6% REE. There is as yet no resource estimate, but even now McKenzie is particularly excited. “We found a structure [the Lopez trend] 2.6 kilometres in length,” he reports, “and wherever this thing comes up out of the alluvial of the Mojave desert we’re getting very strong grades of both heavy and light earths on surface.” Elissa has had similarly positive returns on its other two areas of focus: Black Butte and NED.

The presence of these rare heavy rare earths makes Thor of unique interest. “There are no straight-up heavy rare-earth deposits,” McKenzie says. “You’re going to get a light deposit occasionally with a percentage of heavies. But in our case, of all the sampling we’ve got back, about 10% were heavies, and 90% were light. That’s significant.” McKenzie contrasts Thor with its neighbour 26 kilometres to the west, Molycorp’s Mountain Pass Mine—the only producer of rare earths outside China, currently undertaking a $531-million modernization and expansion program—and the renowned Bayan Obo Mining District in Mongolia, both of which show under 1% representation of heavy rare earths. “Because of their size they’re going to produce some good amounts of heavies. But they’re certainly not supporting world demand.”

Every time we’ve set foot on the property it’s become more intriguing, more interesting, more exciting —Paul McKenzie

McKenzie continues, “There are four metals that are deemed critical by the US Department of Energy: neodymium, terbium, dysprosium and yttrium. We have some very strong representation of all of those. In fact, we have strong representation in 13 of the 17 rare earth elements. The ones we have strong representation of are the ones deemed most critical by the US Department of Energy.”

Following further ground geophysical work and the acquisition of more ground in the area, McKenzie anticipates drilling to begin “within a few months.” He says, “Every time we’ve set foot on the property it’s become more intriguing, more interesting, more exciting. But really the truth is going to be in the drill program. If that stacks up for us, then we’ll immediately expand that pretty aggressively.”

McKenzie argues, “Even a small discovery could potentially be a fast track to production. And we know that [Molycorp] is looking for more heavy rare earths. They’re becoming a pretty aggressive company; they’re smart. I think what they’re really trying to do is to become to rare earths what Cameco is to uranium. They want to be the dominant player. If we have something of size, even modest size, they may well be interested.”

Elissa Resources has 28.8M shares, currently trading at $0.37 and a market cap of $10.7 million. In addition to Thor, it has two gold projects: Sage Creek in Idaho and St Elmo in Nevada. Both properties are “drill ready,” and McKenzie anticipates a Sage Creek drill program of “about six to twelve holes of no less than 100 metres depth” will begin soon. He believes that both projects have “multimillion-ounce potential.”

McKenzie concludes, “We have a significant advantage being next to Molycorp. They are in the process of reopening, and they’re spending a billion dollars to do so—a vast majority of that going into their refining process and refining facilities. This may give us an edge if we make a discovery.”