Demand In Rare-Earth Elements Set To Increase 2,600%
Rare earth elements (REEs) are quietly on a tear. Since bottoming in 2015, REEs have finally broken out in 2017, gaining 65%, with REE companies up almost 100%
While not on the radar of many investors, REEs are poised with lithium and cobalt to face significant supply shocks in the evolving electric vehicle market. Rare earths are used in electric-motor magnets and represent 8% of the total motor cost today.
Researchers at MIT expect demand for certain REEs to sky-rocket by 2,600% over the next eight years. This supply crunch will be exaggerated by the fact that REEs are highly controlled by the Chinese, and that there are significant timelines to production.
There is no rare earth production in North America, and only two projects are slated to come online in the next two years, none of which are in Canada or the United States.
We are also invested in two rare earth companies that stand to benefit from the EV revolution.
Appia Energy Announces Highest-Grade Grab Samples In Canada
Ivan – 49.64 weight % TREO over 0.95 meters;
45.92 weight % TREO over 1.85 meters
Wilson – 30.76 weight % TREO in boulder; 18.53 weight % TREO over 2.7
meters
9.07 weight % TREO over 4.6 meters including 20.94 weight % total
REO over 1.8 meters
6.62 weight % TREO over 1.8 meters
Danny – 13.63 weight % to 2.43 weight % TREO outcrop grab samples
Hinge – 8.73 weight % to 3.74 weight % TREO in boulders
1.90 weight % over 1.5 meters TREO
NW Wilson – 5.10 weight % to 1.68 weight % TREO in boulder and outcrop grab
samples
To put these numbers into perspective, a high-grade deposit has a resource that is greater than 2% TREO, while a world-class deposit is greater than 5% TREO. Appia’s numbers meanwhile are running over 49% at surface.
This mean Appia’s Alces Lake has the potential to be a world-class REE deposit, with at least 5 zones of surface defined mineralization. The sub-surface radiometric anomalies and in-field investigation, suggest that there is, even more, mineralization to be discovered beneath overburden. Because Alces is surface mineralization, Appia will be able to define a resource estimate very quickly – something the company plans for the summer program.
If grades continue below surface into a meaningful ore body, Alces Lake could be a game changer for both Appia, and Canadian rare earth production.
Medallion Resource – The World’s Next Rare Earth Producer
Because of this, there are over 200,000 tonnes of monazite sand stockpiles around the world, and Medallion is seeking monazite processing partnerships to process and produce rare-earth products.
In terms of infrastructure, Medallion has executed a non-exclusive commercial agreement with Rare Earth Salts Separations and Refining LLC, to produce, market and share revenues from the sale of finished rare-earth products. Medallion will produce and supply rare-earth concentrate to Rare Earth Salts, who will, in turn, separate and refine it into marketable rare-earth oxides.
The partnership anticipates initial production of 500 tonnes per year of rare-earth oxides beginning in 2019 and growing over time to 3,000 tonnes per year.
Medallion differs from other REE deals as there is no exploration risk. Monazite sand stockpiles are discarded, and the company can take advantage of it with minimal technical risk, low operational costs, and low capital expenditures. In fact, there is an enormous valuation discrepancy between Medallion Resources and other North American REE names.
Stay tuned for more coverage.
