Board Shakeups; Ratings; Experts at Work; Mole-bots; Seabed Mining; A Greener Future;

Rare Earth 2020 June 9

Northern Mineral’s George Bauk resigned. We speculate that the Australian government’s denial of access to China capital (see TREO June 5) may have made the situation for NTU very difficult.

Leading Edge recently also had a board shake-up that saw 3 board members leaving and interim CEO/director Mark Saxon moving to Medallion. That shake-up, however, may have had less to do with rare earth and may be more related to the large impairments of Leading Edge’s Woxna graphite mine. In rare earths, feasibility of Norra Kärr eudialyte deposit (with a detailed NI43-101 of former Tasman Metals) was already difficult to project at 2010 sky-high rare earth oxide prices. Regardless, LEM share price is up a whopping 88% since beginning of the year:

//Companies

Leading Edge applies for Norra Karr licence extension

The Mining Inspectorate of Sweden (Bergsstaten) has extended the Norra Karr nr 1 exploration licence for another five years, to August 31, 2024, TSX-V-listed Leading Edge Materials announced on Friday.

Northern Minerals chairman assumes executive role after MD and CEO George Bauk resigns

Northern Minerals Ltd’s managing director and CEO George Bauk has resigned from his role with current non-executive chairman Colin McCavana to temporarily assume the role of executive chairman.

The company is undertaking a process to evaluate potential internal and external executive candidates to fill the vacancy.

Mkango Releases Financial Statements and Management’s Discussion and Analysis for the Period Ending March 31, 2020

The Company had cash of $7,394,278 at March 31, 2020 compared to $9,530,017 at December 31, 2019.

The loss for the three months ended March 31, 2020 was $1,522,690 compared to $697,579 for the three months ended March 31, 2019. There was an increase in foreign exchange losses of $379,553 due to unrealized exchange losses on cash held to meet payment obligations in foreign currencies other than the US Dollar and a reduction of $270,446 in revaluation gains on warrants recognized in the comparative quarter.

Fitch Affirms Chalco's Ratings at 'A-'; Outlook Stable

Fitch Ratings has affirmed Aluminum Corporation of China Limited's (Chalco) Long-Term Foreign-Currency and Local-Currency Issuer Default Ratings (IDR) and senior unsecured rating at 'A-'. The Outlook is Stable. A full list of rating actions is at the end of this rating action commentary.

KEY RATING DRIVERS

Chinalco's Strong State Linkage: Chinalco is 100% owned by the state with a strong record of support as it has received consistent and sizeable annual subsidies, equity injections, asset injections and favourable tax treatments. It is the largest aluminium producer in the world, the largest lead and zinc producer in Asia, and a top three producer of copper and rare earth metals in China. Chinalco also makes irreplaceable contributions to China's military and aerospace sectors and has exposure to strategic rare earth metals and military alloys.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Our Rating Case for the Issuer

- Revenue to increase from CNY191 billion in 2020 to CNY197 billion in 2022

- EBITDA margin of 6.1% in 2020 and 2021, increasing to 7.7% in 2022

- Capex of CNY9 billion a year in 2020-2022

- No major M&A and asset or capital injections

Comment: China Aluminum is one of the China Big 6 in rare earth. China Aluminium has 13 rare earth subsidiaries. Its share price has dropped 20% since beginning of the year.

Skyharbour Partner Company Azincourt Announces Drill Results at East Preston Property and Upcoming Summer/Fall Field Program

“Drilling continues to show us we are on the right track at East Preston,” said Azincourt president & CEO, Alex Klenman. “The presence of Rare Earth Element mineralization, similar to Wheeler River, adds to the growing prospectivity of the project. This data is a positive development that demonstrates East Preston continues to reveal it has the necessary environment for uranium deposition,” continued Mr. Klenman.

At the B-zone, Heavy REE (HREE) contents are far more enriched than Light REE (LREE). HREE examples include Ce (up to 8660 ppm), La (up to 4800 ppm) and Nd (up to 2720 ppm) that are up to 100 times enriched relative to ‘normal’ background basement values, whereas LREE examples Sm, Dy, Ho, etc. are enriched 5-10 times background. The anomalous intervals, sampled over several metres have associated enrichment in S, B, P2O5, Zr and Th interpreted, from chemical element associations, to represent some combination of sulphide, apatitite-xenotime-zircon REE-bearing mineralizing fluids in silicified and reactivated fault zones.

Comment: Another one, trying to hop on to the RE train. Should read their press releases, before sending them out (light and heavy rare earth mixed up).

As Chinese rare earths’ stock prices rally, pressure rises for the rest of the world…

Rising US-China tension has resulted in some rare earths’ stock prices rising sharply, particularly those in China.

News flow in future months should continue to be extremely promising for the rare earths sector following on from the tremendous news from the last few weeks.

Investors should not wait too long as any further increased US-China tensions, threats of China supply loss, or passing of rare earths related Bills, will likely send non-Chinese rare earth miners stock prices higher.

Comment: Bold expert statements, certainly corroborated by rigorous research. Worthy of a fact check. Since beginning of 2020:

  • China rare earth enterprises share prices are down an average of 7.8%.

  • China rare earth magnet makers shares are down an average of 13.4%.

  • Whereas, principal* rare earth stocks on western exchanges are up an average of 24%, excluding REEMF, who are up 1,000%.

Most principal* western RE stocks are from pre-revenue companies, whereas there are no pre-revenue companies among the Chinese listed RE and magnet stocks.

*= share price above 0.05 AUD/CAD/USD/GBP/SGD/EUR

China‘s rare earth exports drop 20-30%, crippled by COVID-19 outbreaks abroad

Despite a drop in exports, China should still hold its rare earth as a bargain chip in trade talks with the US, or to combat US government‘ malicious crackdown of Chinese high-tech companies, analysts say. 

The comments came after the Association of China Rare Earth Industry issued a notice on Thursday, which exempted membership fees for member companies in 2020. In the notice, the association admitted that the COVID-19 has inflicted “considerable damage” on China‘s rare earth industry, causing difficulties of varying degrees in the operations of many rare earth producers.

Comment: Source is the combative Global Times, a daughter publication of the People’s Daily 人民日报, a publication of the Chinese Communist Party.

//Policy

Department of Energy Innovation Hub Announces $4 Million for Critical Materials Projects

Critical materials, including rare earth elements, are essential components of modern technologies, yet they are vulnerable to supply chain disruption. DOE invests $25 million per year in the CMI to assure supply chains of materials critical to clean energy technologies, which enables American manufacturing innovation and enhances national energy security.

CMI’s project call focuses on three areas:

  1. Process innovation that will transform unconventional sources of critical materials into commercial resources;

  2. New, highly-selective separation methods from industrial and end-of-life waste streams; and

  3. Innovative solutions for conversion of critical minerals into high-value end products.

Saskatchewan mining industry provided relief amid COVID-19

The amendments will be implemented as follows:

  • Waiving expenditure requirements for the current term and subsequent 12 months for mineral claims and leases that were active on March 18, 2020, State of Emergency declaration date;

  • Allowing expenditures incurred during the period for which relief is granted to be applied toward expenditure requirements of The Mineral Tenure Registry Regulations; and

  • Allowing the holder to meet requirements for refund of deficiency deposits after the relief period has ended.

The changes apply to northern exploration programs for all Crown minerals including uranium, diamonds, gold, copper, zinc, cobalt and rare earth elements.

//Mining

'Mole-bot' optimized for underground and space exploration

The Mole-bot is expected to be used for space exploration and mining for underground resources such as coalbed methane and Rare Earth Elements (REE), which require highly advanced drilling technologies in complex environments.

"The crushing power of the African mole-rat's teeth is so powerful that they can dig a hole with 48 times more power than their body weight. We used this characteristic for building the main excavation tool. And its expandable drill is designed not to collide with its forelimbs," said Professor Myung.

The 25-cm wide and 84-cm long Mole-bot can excavate three times faster with six times higher directional accuracy than conventional models. The Mole-bot weighs 26 kg.

Underwater drones join hunt for trillions in mineral riches trapped on ocean’s floor

While dozens of contracts for companies to begin collecting have been granted, the first company to gain deepsea mining rights went bankrupt last year and there hasn’t been a successful large-scale operation.

The value of gold alone on the seafloor is estimated to be worth $150 trillion. Meanwhile, the value of nodules — containing manganese, nickel, copper and cobalt — also reaches into the trillions. And then there are deposits formed around thermal vents. With continued demand for rare metals used in today’s electronics, from iPhones to solar energy components, it’s clear why a number of governments and countries have started a race to the bottom of the ocean.

$1.5B POWER LINE TO UNLOCK MINING OPPORTUNITIES

A $1.5 billion power line proposal would unlock northwest Queensland to massive mining opportunities, creating 3500 jobs and pouring $6 billion in royalties into Queensland coffers.

A greener future for IT Asset Disposal

By 2050, the amount of e-waste will more than double to 120 million metric tons a year if nothing is done to tackle this massive problem. Data erasure could be the answer, but only if processes are implemented as part of its Corporate Social Responsibility (CSR) policy.

Many companies dispose of decommissioned hardware by shredding it to ensure stored data is irretrievable. This is done largely to comply with data protection mandates such as the Protection of Personal Information Act (POPIA) and the General Data Protection Regulation (GDPR). Shredding is mostly used due to a lack of understanding of other alternatives and a lack of understanding about the environmental impact of physical destruction.