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Rare Earths Prices are at Decade Highs – So Where’s the New Supply?

On December 10, 2020, Stockhead ran a story which highlighted the dramatic price growth of neodymium-praseodymium (NdPr) oxide on the … Read More
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On December 10, 2020, Stockhead ran a story which highlighted the dramatic price growth of neodymium-praseodymium (NdPr) oxide on the Shanghai Metals Market.

That story, penned in conjunction with Arafura Resources (ASX:ARU), highlighted 30% price growth in NdPr prices between late October 2020 and the price on the date of publication – around $US65.30/kg.

It was impressive growth, but with the benefit of hindsight it really does look as though that was just the beginning. Today, the price of NdPr on the same index makes for some serious reading – crossing the $US100/kg mark in October, it currently sits above $US120/kg.

You can keep track of it for yourself on the Shanghai Metals Market website or app, or check the monthly growth chart below.

NdPr price movement over the month to November 9, as measured by Shanghai Metals Market. USD/t listed on the righthand side. Pro tip: there’s 1000kg in a tonne, in case you failed year 10 mathematics like your writer did. Picture: Shanghai Metals Market.

Remarkable.

Rare earths price movement is no secret to those in the know, but mainstream coverage tends to pay more attention to the price movement of certain commodities. We’re all aware of big movements in iron ore and gold. Nickel triggers headlines when highs are hit, so too copper. NdPr and its rare earth relatives generally don’t crack as much of a mention.

High prices are obviously a good thing for project developers like Arafura, which holds the shovel-ready, NdPr-rich Nolans project in the Northern Territory.

That company is progressing discussions with several potential offtake partners with a view to securing 85% of its project output as binding offtake, as it works towards funding and a final investment decision in the second half of next year.

Speaking to Stockhead, Arafura general manager sales & marketing Lloyd Kaiser said it had been more than a decade since a locally listed rare earths project achieved significant funding – one of many reasons the industry was watching NdPr prices increase.

“There hasn’t really been any real investment in plants or projects for such a long time,” he said.

“The last time we saw it really was in 2009, which was Lynas Corporation (ASX:LYC), and that is a long time ago.

“With current high prices and continued price growth, the prospect of good projects getting up into production via funding and offtake is becoming much more real.”
 

What’s driving prices?

The demand equation is simple. The tech of tomorrow relies on the magnets produced by the rare earths – particularly NdPr – output of today and the years to come.

“Chinese magnet output in 2021 is approximately 228,000 tonnes, and outputs have grown since March 2020. Overall demand has lifted from 160,000t in China,” Kaiser said.

That supply is being soaked up by the world’s growth industries.

“EVs are going really well. You’ve got the electronics market, robotics, e-bikes, wind energy and renewables – over the next five years and beyond we expect to see even more growth in that renewables space,” Kaiser said.

So where do we get it from at the moment?

It’s estimated that more than 85% of the world’s rare earths production currently comes from China, where plans were recently flagged to combine three state-owned rare earths enterprises into one company which would control 70% of the nation’s rare earths.

That’s an enormous slice of the world’s rare earths pie for one company, and nation, to have. Especially one which has, uh, made some waves geopolitically in recent years.

Geopolitical tensions have led the US, Europe, Korea, Japan, India, Australia – the list goes on – to reconsider the global supply chain and prioritise local or allied access to the raw commodities and magnets powering the world of the future.

That’s massive for the demand equation in the future, but it doesn’t really explain the price performance right now.

“Over the last year we’ve seen the Chinese government pushing environmental law within the supply chain, particularly within rare earth processes, and that’s restricted some output,” Kaiser said.

“If there’s any issues with processes or mining operations they have to be rectified, which can take a long time and raise the costs of production. Some of the projects shuttered in the southern rare earths region of China have been closed for years and may never reopen.”

When push comes to shove, the world needs more rare earths for magnets to produce technologies for which appetites are growing. Demand growth, supply constraints. A lack of project investment over the last decade, in an industry where development takes time, with a sprinkling of geopolitics to boot.

Where’s the new supply? It’s a question the whole world should be asking.

Lynas and Arafura aside, the ASX’s rare earths aspirants include Ionic Rare Earths (ASX:IXR), PVW Resources (ASX:PVW), RareX (ASX:REE), American Rare Earths (ASX:ARR) and many more.

Check out Stockhead’s ‘punter’s guide to rare earths’ for more to watch.

At Stockhead, we tell it like it is. While Ionic Rare Earths, PVW Resources, RareX, American Rare Earths and Arafura are Stockhead advertisers, they did not sponsor this article.

The post Rare earths prices are at decade highs, so where’s the new supply? appeared first on Stockhead.

Author: Jack McGinn

Precious Metals

Discovery Silver Reports NPV Of US$1.2 Billion For Cordero

Discovery Silver (TSXV: DSV) this morning reported a preliminary economic assessment for its Cordero Silver Project, which is found in
The post Discovery…

Discovery Silver (TSXV: DSV) this morning reported a preliminary economic assessment for its Cordero Silver Project, which is found in the Chihuahua State of Mexico. The project is said to have an after-tax net present value of US$1.2 billion.

The projected NPV is based on a 5% discount, with a bae case of $22.00 per ounce silver, and $1,600 per ounce gold. The IRR of the project is estimated at 38% based on the base case scenario. That NPV is expected to climb to $1.9 billion if silver were to climb to $27.50, and gold to $1,880, representing an IRR of 55%.

The projections are based on a large scale mine, with a mine life of 16 years. Annual production is slated for 26 million ounces of silver equivalent, with an AISC of $12.35 per ounce of silver equivalent. Payback meanwhile is estimated at 2.0 years for the base case, with initial CAPEX of $368 million.

Mine life has the potential to be expanded as well, with over 300 Mt of sulphide resources not included in the design pit, but are found within the resource pit shell. The project has a whole currently has a sulphide resource of 837 million ounces of silver equivalent on a measured and indicated basis at an average grade of 46 g/t, as well as an inferred resource of 119 million ounces of silver equivalent at 34 g/t.

An additional oxide resource of 74 million ounces of silver equivalent at 23 g/t on a measured and indicated basis, as well as 22 million ounces at a grade of 18 g/t on an inferred basis exists for the property.

A prefeasibility study is slated to be completed on the project in 2022, with the company viewing the project as a Tier 1 silver asset.

Discovery Silver last traded at $1.81 on the TSX Venture.


Information for this briefing was found via Sedar and Discovery Silver. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Discovery Silver Reports NPV Of US$1.2 Billion For Cordero appeared first on the deep dive.






Author: Jay Lutz

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Articles

Metalstech drops the Tlamino purchase option

 
Just a few weeks after announcing it had entered into an option agreement with Medgold Resources (MED.V) whereby Metalstech (MTC.AX) could acquire the…

Just a few weeks after announcing it had entered into an option agreement with Medgold Resources (MED.V) whereby Metalstech (MTC.AX) could acquire the Tlamino gold project in Serbia, Metalstech decided to terminate the option agreement as the project was ‘not a fit’.

This means the company remains fully focused on its flagship Sturec gold project in Slovakia where the company is continuing its aggressive drill program which will expand and increase the credibility level of the underground gold mineralization. Metalstech has recently appointed a Chief Permitting Officer and country manager which seems to indicate the company wants to keep the momentum going at Sturec.

Metalstech is also looking into obtaining a listing in London which could help the company’s financing efforts, considering it is working on an European project.


Disclosure: The author has no position in Metalstech. Metalstech is a sponsor of the website. Please read our disclaimer.


Author: CR Team

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Energy & Critical Metals

IPO Watch: Lithium explorer Winsome Resources listed today – here’s how it performed

Two companies IPOd today but the biggest winner was lithium explorer Winsome Resources (ASX:WR1) who listed after raising a tidy … Read More
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Two companies IPOd today but the biggest winner was lithium explorer Winsome Resources (ASX:WR1) who listed after raising a tidy $18 million at $0.20 per share.

The company’s shares were trading at 26 cents per share near close of play –  a healthy 30% above issue price.

Funds from the IPO will accelerate the company’s exploration at its three project areas – Cancet, Adina and Sirmac-Clappierin the James Bay Region of Quebec Province, Canada.

The aim is to establish a maiden resource of high quality spodumene concentrate that is suitable for conversion across multiple battery applications.

Notably, the most advanced project – Cancet – is a shallow, high grade lithium deposit and is strategically located close to established infrastructure and supply chains.

Plus, the company says that Quebec is one of the world’s most supportive, lowest risk mining regions, renowned for its world-class infrastructure and support for mining developments and is at the forefront of the North American push to develop its own EV battery supply chain.

Winsome managing director Chris Evans was previously MD of FireFinch (ASX:FFX) and COO of Altura Mining (ASX:AJM) – so it’s safe to say he knows what he’s talking about when he says it’s an exciting time to be exploring for lithium.

“Current trends show up to 10 times more lithium is required in the next decade to meet the demand and it is going to require a huge investment to get there,” Evans said.

“With more than 99 per cent of the world’s lithium reserves located in Australia, Argentina, Chile and China, our projects offer jurisdictional diversity and opportunity to contribute to the expanding North American battery industry.”


 

Biome Australia (ASX:BIO)

Also listing today was microbiome health company Biome Australia, who licences, develops and markets innovative, evidence-based, complementary medicines, including nutraceuticals (food-based vitamins and weight management products) and live biotherapeutics (probiotics).

The company IPOd at $8 million at $0.20 per share, and its shares were trading at 11 cents per share – a huuuge 41.25% drop below the issue price.

Biome will use the funds to accelerate new product development and commercialisation in the complementary medicines industry – which it says in Australia is estimated to be worth $5.69 billion.

The company currently distributes 22 products through more than 2,300 community pharmacies and a range of health practitioners and health food stores in Australia, New Zealand and the United Kingdom, with some of its products also available online.

“While supporting health professionals to improve patient health outcomes, Biome has doubled its revenue over each of the last two financial years, with annualised sales revenue to October 2021 showing continued growth,” chairman Ilario Faenza said.

It has a clear growth strategy that will be propelled by the IPO proceeds, accelerating commercialisation and product development.”


 

The post IPO Watch: Lithium explorer Winsome Resources listed today – here’s how it performed appeared first on Stockhead.



Author: Emma Davies

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