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Rare Earth Investing… Read The Fine Print!
There is a fundamental truth that some analysts, advisors and investors in the Rare Earths space don’t yet fully appreciate. Simple, tried and true methods for valuing resources in the ground won’t apply to many of the Rare Earth companies they favour. Although they might not fully appreciate the significance of it now, they sure will soon when they watch many of their favoured companies attempt the difficult transition to the next phase of their development. This phase entails setting out to master the extremely complex process of separating the individual REEs from their ore.
The simple fact of the matter is having Rare Earth Elements in a property is one thing, but having the capability, knowhow, facilities and expertise to separate them is altogether another. Companies that can do this will add significant value for their shareholders. But doing so is definitely not an easy or fast process. For example, it took 10 years for the Soviet scientists to crack the geological code to separate all 15 elements at the Kyrgyz Metallurgical Plant (KCMP) facilities that Stans Energy just purchased.
The significance of what Stans Energy has accomplished through their purchase of the Heavy Rare Earth processing facilities, equipment and rail terminal has been lost on many pundits in the market. Not only did Stans buy the HREE facilities and equipment for a fraction of the purchase price that other companies have budgeted to build their processing facilities for, but in this purchase Stans has acquired an extensive and extremely detailed records room of files that describes in meticulous detail the separation processes that are proven to work – for all 15 REEs. Stans will not only be able to rely on this blue print, but they also have the distinct advantage of having many of the people who operated and worked in their open pit mine and the processing facility still living in the communities nearby.
These detailed processing records were the result of the Soviet practice of having two assistants for each scientist who worked at the facilities. Stans has also secured a very solid relationship with the Leading Russian Chemical and Metallurgical Institute in Moscow (VNIIHT) who will assist the company in developing their enhanced metallurgical processes. This institute and the former workers in the plant know what they are doing and unlike many other companies in this space, they will not be starting from scratch. Stans Energy has “known and proven” hydro metallurgical processes for all 15 REEs whereas some other companies in this space could very well be looking through the Yellow Pages directories to try to figure it out. Stans has stated that they will be focusing their attention on the processing of the more valuable and scarcer Heavy Rare Earths.
Investors in the Rare Earth space cannot discount the significance of what Stans Energy’s management team has accomplished with their purchase of the HREE processing facilities. They would be well served to take a hard look at whether other REE companies they may be interested in have their own metallurgy figured out and whether they have the team of experts in place to make this happen.
Rob Mackay, President and CEO of Stans Energy recently stated “What most analysts in this space neglect to advise their investors to do is to ask what I consider to be the most important question when investing in HREE stocks. That question is . . . Does the company have an industrial scale Hydro metallurgical process that works? From my research so far, the answer for this is no!”
Mackay went on to say . . . “We have spent a lot of time over the past 6 months learning how difficult it is to separate HREE’s from a hard rock deposit. I remember back to one of my first conversations with one of our company’s advisors (Jim Allen) who spent most of his geological career in REE’s. Jim said that you can have 5% grades but unless you can separate them they are worthless. I also recently asked Jim Hedrick – a retired REE expert with the USGS who also is an advisor to Stans – to comment on separation of HREE’s in hard rock. He confirmed that without proven hydro metallurgy they are all just rocks.”
In an excerpt from a Dec 9th, 2010 paper written by Karl A. Gschneidener, Jr., from Ames Laboratory at the Iowa State University, entitled The Rare Earth Crisis – The Lack of an Intellectual Infrastructure, Mr. Gschniedener states that:
“. . . today there is a serious lack of technically trained personnel with the appropriate expertise and experience to bring the entire rare earth industry from mining to original equipment manufacturers (OEMs) up to full speed in the next five years.”
This topic was discussed in more detail in an October 2010 Kidela Capital Group Blog – Mining is the easy bit: Separating rare earth elements is where the complexity comes in. This blog was written a few months before Stans Energy announced their purchase of the HREE processing facilities.
Given the attention the Rare Earth space has garnered lately, this will no doubt prove to be a pivotal year in the HREE market and investors will need to be on the watch for terminology in company reports that state . . . “more metallurgical testing is required.”
Those five words are extremely important and should spur investors to investigate further. Having a significant grade and tonnage deposit of Rare Earths – and – also having the hydro metallurgy to actually extract the REEs in viable quantities are two completely different components of success. And investors shouldn’t let anyone – no matter who they are and how many subscribers they have – tell you otherwise.
TheInvestar.com posted this article on Stans earlier today:
'Revisiting Stans Energy':
http://theinvestar.com/articles/2011_02_07.htm
Food for Thought, for Rare Earth Investors
In the global race to develop new sources of Rare Earths (REs), there are now hundreds of companies jostling for attention and recognition amongst investors. With all this competition in the Rare Earth Element (REE) space, it becomes much more difficult for the better companies to stand out from the pack.
While many companies claim to be in the RE business, most of them are a long way off from getting their REEs out of the ground and into a processing facility, due to the regulatory quagmire and tremendous costs and complexities associated with mining and processing.
Yes, how does an investor begin to separate the valuable companies who are real players in this space from the other companies who want to ride the Rare Earth wave? One of the best ways to narrow your search is to follow the people who are very good at finding value in crowded markets.
Taking stock, in Rare Earths
In a recent issue of Money Sense magazine, you’ll see a list with the Hulbert Financial Digest’s top performing investment newsletters in North America. At the top of the list is Outstanding Investments, with 21.8 % annualized return on stock picks over the past 10 years. Mr. Byron King, a former geologist and business lawyer, authors the widely-read newsletter.
Here’s a sample of what the Mr. King had to say in his latest release about a company Kidela Capital Group Inc. works with, Stans Energy Corp (TSX-V:RUU)
‘With Stans, you’re getting the real McCoy. Stans has the Right Stuff. Stans has real rocks, a real mine, a real processing plant, real technical people and — most importantly — unduplicable sets of real relationships with the right people in the right places.’
‘Stans is a country mile ahead of the non-Chinese competition. There’s Stans. Then there’s everybody else.’
‘When word hits Wall Street about this tiny Canadian company’s giant $14 billion discovery of rare earths in the former Soviet Union, it’s likely to send its stock price into the stratosphere!’
Another way to ferret out the great new stocks is to follow the successful fund managers. Canada’s best performing hedge fund manager of the past year is Mr. Steven Palmer. Mr. Palmer is the president of Toronto-based AlphaNorth Asset Management Inc. He credits Stans Energy for helping his fund earn triple-digit gains from surging resource stocks.
‘This is what we did with rare earths,” Palmer told the Globe and Mail newspaper, on January 26. “We were positioned last summer with our biggest weightings in a couple of rare-earth names — Stans Energy Corp. and Ucore Rare Metals Inc. — and they have been star performers.’
Why the buzz about Stans Energy? With the demand for Heavy Rare Earth Elements (HREEs) anticipated to outstrip supply by 2014, it is the only company poised to become a leading producer of HREEs.
Stans has 100% ownership of an open pit mine that historically produced 50% HREEs and 50% LREEs, and it’s just purchased an REE processing facility nearby. This REE complex in Kyrgyzstan in the former Soviet Union supplied 80% of all REEs for the Soviets for almost 30 years, and was only 1/3 mined using historical estimates.
Moving Rare Earths by rail
Stans has a number of other advantages in addition to their most likely being the first HREE-focused producer. The company recently purchased a HREE production complex which is close to a skilled labour pool – the town of Orlovka. Many of the people who worked at the mine and facility still live there. And even more interesting is that the purchase agreement included a rail terminal – a critical link to the extensive Asian train network that Stans will use to supply its REE complex and transport its finished products out to the world.
There is an old adage: do what successful people do and you will increase your chances of success. In the Rare Earth space, Byron King and Steve Palmer are two very successful people who are worth following.
IC Potash announces commencement of preparation of the Ochoa Project Prefeasibility Study
IC Potash Corp. announced today the commencement of the Ochoa Project Sulphate of Potash (“SOP”) Pre-feasibility Study. Through this study and concurrent environmental work, the company will establish the engineering basis for mining, processing, and marketing of SOP. This study should be completed within approximately 9 months and the primary goal is to be in production for 2014. The Ochoa property consists of over 100,000 acres of federal subsurface potassium prospecting permits and State of New Mexico Potassium mining leases.
IC Potash intends to become the lowest-cost producer of this premium, non-chloride-based potash fertilizer. Sulfate of potash sells at a 40% premium over the price of regular potash since it is better for saline and dry soils, and gentler on delicate crops such as fruit, vegetables, tobacco and horticultural plants.
The pre-feasibility team includes seven groups of accomplished professionals. The lead engineering firm will be Gustavson Associates, LLC who will provide the mining and processing plans. Mineral processing optimization and confirmation will be carried out by a team of highly experienced potash processing chemical engineers. Pilot testing work will be managed by Hazen Research, Inc. whose objectives will include the optimization of SOP recovery. Hydrology and environmental work will be overseen by Intera Geosciences and Engineering who provides expertise in water resource management. Processing equipment design and selection work will be handled by FLSmidth whose experience includes ore control and emissions systems. Rock mechanics work will be carried out by Advanced Terra Testing who has expertise in the provision of physical test data for mining engineering projects. SOP marketing and pricing work will be administered by CRU, a leading business consultancy for the fertilizer industry.
For more information please see the press release below.
IC Potash announces commencement of preparation of the Ochoa Project Prefeasibility Study
TORONTO, February 2, 2011 – IC Potash Corp. (“ICP” or the “Company”) (TSXV: ICP; OTCQX: ICPTF) is pleased to announce the commencement of the Ochoa Project Sulphate of Potash (“SOP”) Pre-feasibility Study. Through this study and concurrent environmental work, the Company will establish the engineering basis for the Ochoa Project for mining, processing, and SOP marketing.
This announcement complements recent operating progress including two successful drill programs, the establishment of substantial measured and indicated resources, and the completion of the Preliminary Economic Assessment, which indicated that the project has a projected Net Present Value of $1.4 billion with a discount rate of 10% and production level of 660,000 short tons.
Mr. Sidney Himmel, President and Chief Executive Officer of IC Potash stated: “I am very pleased with the operational progress made to date. We are on plan with our primary strategic goal to be in production for 2014. To achieve that, we have assembled an excellent team of accomplished professionals to complete this study and will now move quickly to establish the economic engineering parameters for the Project.”
Pre-Feasibility Team:
* Lead Engineering Firm and Project Manager: The lead engineering firm will be Gustavson Associates, LLC. of Colorado (“Gustavson”). Gustavson will provide the mining and processing plans, and initial detailed engineering. Gustavson is a global consulting firm consisting of mining engineers, geologists, economists and geophysicists.
* Mineral Processing: Process optimization and confirmation will be carried out by a team of highly experienced potash processing chemical engineers. This highly experienced team has worked with numerous global corporations as consultants and represents some of the leading authorities on the processing of potassium salts. Collectively, the team has over 100 years of experience directly related potash salt processing.
* Pilot Testing: Hazen Research, Inc. (“Hazen”) of Golden, Colorado, will perform bench scale and pilot process testing, including the evaluation of prior work carried out by the Bureau of Mines, and prior corporate pilot plant testing of polyhalite to SOP processing. The objectives will include the optimization of SOP recovery, including the minimization of water usage and required acreage for solar evaporation. Hazen’s professional staff includes over 150 highly trained professionals in the fields of chemical and metallurgical engineering. Hazen has internationally recognized expertise in pilot plants, minerals beneficiation, physical separations, thermal processing, and hydrometallurgy.
* Hydrology and Environmental Work: The hydrology work will be managed by Intera Geosciences and Engineering (“Intera”) of New Mexico. Intera is highly experienced in water resource management related to water supply, quality, rights, transfers, and management. Intera has expertise in the south-western United States with clients including industry and state, federal, and municipal agencies, and has expertise in providing models of hydrologic system conditions.
* Processing Equipment Design and Selection: This work will be carried out by FLSmidth, a leading supplier of equipment and services to the global minerals industry, employing more than 10,000 people world-wide. Product expertise includes ore feeding, sizing, crushing, and milling, automation and control systems including mix optimization, conveyor engineering, and expertise in emissions and water systems.
* Rock Mechanics: This work will be carried out by Advanced Terra Testing of Colorado (“ATT”). ATT has expertise in the provision of physical test data for mining engineering projects word wide, including rock mechanics and geosynthetics.
* SOP Marketing and Pricing: This work will be carried out by CRU. CRU, formerly known as British Sulphur Consultants, is the leading business consultancy and publisher for the fertilizer and chemical industries. The company forecasts fertilizer markets internationally. CRU has established a worldwide reputation in minerals and chemicals consulting over a period of 50 years.
Randy Foote, Chief Operating Officer of the Company stated: “With the team of engineering, hydrological, processing, and marketing professionals in place, I am fully confident that we are on the right path towards the development of a major Sulphate of Potash production facility. We believe that this study should be completed within approximately 9 months. I am very excited to be managing the engineering planning and design with this team of professionals, with many of whom I have worked with in the past in potash production.”
All scientific and technical disclosures in this press release have been prepared under the supervision of William J Crowl, a consultant to IC Potash who is a Qualified Person within the meaning of National Instrument 43-101.
About IC Potash Corp.
IC Potash intends to become a primary producer of Sulphate of Potash (“SOP”) by mining its 100%-owned Polyhalite Ochoa property in New Mexico. SOP is a non-chloride based potash fertilizer that sells at a substantial premium over the price of Muriate of Potash (“MOP”), the most widely used fertilizer in the world. Typically SOP sells at a premium of over 40% to MOP. ICP is focused on being the lowest cost producer of SOP in the world. The SOP market is approximately six million tonnes per year and SOP is a significant fertilizer in the fruit, vegetable, tobacco, potato, and horticultural industries, and for agriculture in saline and dry soils and soils in which there is much agriculture with varieties of crops, such as for example in China, India, the Mediterranean, and the United States. ICP’s Ochoa property consists of over 100,000 acres of federal subsurface potassium prospecting permits and State of New Mexico Potassium mining leases.
Forward-Looking Statements
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of ICP, including, but not limited to, risks associated with mineral exploration and mining activities, the impact of general economic conditions, industry conditions, dependence upon regulatory approvals, and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
Please visit www.icpotash.com or contact: Sidney Himmel, 1-416-624-3781?
IC Potash: On the Cusp of Something Big
Global food shortages; increased world population and urbanization; destructive natural disasters like unprecedented floods that wipe away hundreds of thousands of acres of farmland—all headlines on the six o’clock news. The mounting pressure on farmers to grow more food on less land is starting to become unmanageable in selected parts of the world. Food producers are desperate to find new fertilizers and methods that will boost their crop yields. This global need shows no sign of easing off. A failure to meet this growing demand is virtually unimaginable.
The ‘Father of Fertilizer’ German chemist Justus von Leibig was right on the mark in the 19th century when he stated that inorganic materials were the vital forces behind healthy crops. Today, his comments can be rephrased as “feed the crops so the crops can feed the world.” The spotlight is starting to get quite a bit brighter on companies that will be able to provide effective fertilizers and their practical importance is growing as is their market value. One just has to look at how the world media has focused their energies on exploring the multi-billion dollar mergers and attempted takeovers in the potash industry. Australia’s BHP Billiton’s failed pursuit of Canada`s Potash Corp. made investors sit up and begin to take notice. And the recent union of Russian potash giant Uralkali with Silvinit effectively created the second largest potash corporation in the world.
Yes, there definitely is a buzz in the market, and given the macro-dynamics at play, the demand for fertilizer – and the companies who produce it – isn’t likely to end anytime soon. Rather, we may now be witnessing just the start of the ride. With this as a backdrop, we would like to introduce you to our newest client, IC Potash Corp.
A premium product
IC Potash plans to be a leading producer of sulfate of potash (SOP) fertilizer. This premium potash contains lower amounts of chloride than regular potash, giving it a distinct market advantage. SOP is gentler on leaf-bearing crops, such as fruit and vegetables, and is particularly effective in dry or saline soils, such as those in China and India. For these and several other reasons, this specialty fertilizer is in high demand and it sells for a 50% premium over regular potash.
The future is very bright for SOP even though regular potash currently accounts for 89% of world potash fertilizer consumption and SOP only accounts for 10%. The long-term growth rate of SOP sales is expected to rise by 3% to 4% which represents 200,000 to 250,000 tons per year. SOP is even predicted to experience the strongest growth of all fertilizer products. Plus, as it is sheltered from volatile production costs it has a more stable pricing outlook than regular potash.
IC Potash is building its infrastructure and processing models to be the lowest-cost producer of SOP fertilizer. To accomplish this, the company will be utilizing the most inexpensive method of manufacturing in the industry. Their mining site in New Mexico – which is the birthplace of the US potash industry – turns polyhalite ore into three different forms of SOP that can be customized to soil and crop conditions.
IC Potash holds 21 federal sub-surface polyhalite prospecting permits in southeast New Mexico. This site, named The Ochoa Project, covers over 113,000 acres and is 100% owned by the company. ICP’s neighbours, The Mosaic Company and Intrepid Potash, are dominant players in this industry as well. The company released good news on January 17, 2011 relating to a NI 43-101-compliant preliminary economic assessment. ICP’s base production level is expected to be 660,000 tons per year, with their operating costs projected to be $164 per ton. The company’s capital costs to bring the project fully into production are planned to be $662 million.
Good for everyone
IC Potash doesn’t just mine a first-rate product; it employs first-rate people. CEO Sidney Himmel is a former investment banker, specializing in mining companies. CFO Kevin Strong was previously a regional manager of the TSX Venture Exchange. COO Randy Foote has 27 years of experience in the U.S. potash industry, and their chief exploration and development officer, Patrick Okita, holds a PhD in geology. Dr. Okita has previously worked with BHP Billiton and the U.S. Geological Survey while Mr. Foote has held positions with Intrepid Potash.
Not only is SOP good for farmers but investors seem to be benefiting as well. Aside from these two benefactors, SOP can lay claim to also being good for the average person. Yes, this is a bold claim, but true; regular potash only contains potassium while SOP contains both potassium and sulfur. Food fertilized with SOP contains high levels of these two important nutrients which are beneficial to human health. Fruits, vegetables, grains and nuts are all good sources of these elements. And they also happen to be good for a healthy heart and body.
Now more than ever before, finding the right fertilizer to help farmers is essential to our world’s population state of health. IC Potash is poised to be a major player in the potassium fertilizer industry. And when that happens, it will mean more nutritious and delicious food on kitchen tables around the world.
Stans Energy is Taking Off in the Rare Earth Space
With China pulling back and the U.S. and other former producers scrambling to get back in the game, it looks like there’s a new heavy hitter on the Rare Earth field.
Stans Energy Corporation, announced a year ago it was buying a Rare Earth Element (REE) mine called Kutessay II in the former Soviet territory of Kyrgyzstan. Now, Stans is expanding its Rare Earth (RE) presence with a deal to acquire a REE processing facility next door to its mine. The complex itself is a rarity – the only one of its kind outside of China focused primarily on processing the more precious Heavy Rare Earth Elements (HREE).
On January 13th, 2011, Stans Energy announced that it had reached an exclusive agreement with the owners of the Kyrgyz Chemical Metallurgical Plant (KCMP) to buy 100% of KCMP’s RE processing complex along with a nearby private rail terminal.
Location, location, location…
KCMP’s potential and together with its strategic location only 40 kilometers away from Kutessay II, were no doubt key selling points. For almost three decades, the complex Stans is buying had produced 80% of the former Soviet Union’s total RE product supply.
Much of the facility has been mothballed since the 1990’s, although a small amount of processing was performed as recently as 2009. According to Stans, the Soviets spent decades and countless millions to perfect the complex separation and extraction techniques at KCMP. That technology and valuable equipment is now effectively owned by the shareholders of Stans Energy. The company plans to call on the Russian institutes who designed and built KCMP to help retrofit and refurbish their new facility.
Stans’ REE processing complex is located near the town of Orlovka, where many residents have either worked at KCMP or in the Kutessay II mine. This valuable labour pool also represents a tremendous base of experience that will play an essential role in helping to get the facilities ready for what’s to come.
Railway to the world
Another attractive feature of the agreement is the rail terminal that is only a short drive away from the KCMP plants and Stans Energy’s own REE mine. During the Soviet era, this mine was used to supply the processing complex and transport its final products out to markets throughout the vast former Soviet Union. The terminal included in this sale is connected to the Central Asian Rail Network, which is linked to Russia and other REE markets such as China, South Korea and even (by ferry) to Japan. Acquiring this existing rail infrastructure represents a huge cost savings for Stans, since they will not have to spend millions of Capex dollars of to build a transportation network to get its products to market.
With this deal, Stans Energy has firmly established itself as a force within the Rare Earth space. Stans has not only expanded its supply chain, but it now has a proven facility where it can process output from its own REE mine. They have added processing capacity at a fraction of the cost other Rare Earth companies have budgeted for building their own REE processing plants.
Moving forward and leveraging their existing partnership agreement with prominent Russian metallurgical institutes, Stans will have the expertise needed to get their facilities refurbished and back in operation.
Stans has made tremendous strides to add the necessary infrastructure it needs to get its Rare Earth out of the ground, processed and to end users. With developments like this, Stans Energy is poised to solidify itself as a major HREE producer . . . the only one in the world outside of China!
Yes, Stans can now be considered a serious player in this industry – all within 12 months. One has to wonder “What’s next on Stans Energy’s agenda?”
Interview with Robert Mackay, President & CEO of Stans Energy Corp.
On January 13th, 2011 Stans Energy Corp. announced the acquisition of a Heavy Rare Earth (HRE) processing complex, including a private rail terminal near their Rare Earth (RE) open pit mine in Kyrgyzstan. Kidela contacted Robert Mackay, President & CEO of the company and asked him a few questions related to this purchase. Here is what Robert Mackay told us...
Kidela: Stans Energy has just announced a major development in the International Rare Earth space with the announcement that the company is buying a Rare Earth (RE) processing facility in Central Asia — the Kyrgyz Chemical-Metallurgical Plant or KCMP, in Kyrgyzstan, in addition to its own private rail terminal. What’s the significance of this news?
Robert: We believe that with this purchase we have added significant value for our shareholders at a fraction of cost that other RE companies have budgeted for the construction of a RE processing facility. This acquisition enables us to process the concentrate from our RE mine, Kutessay II, at Stans Energy’s own processing plant, which is only 40 km away and transport it via rail to our buyers. KCMP helps Stans gain a first-mover advantage among future RE producers – specifically Heavy RE producers. We are very confident that in the coming years the separation of final Heavy Rare Earth Oxides and Metals is where the real value will be created in this sector.
Kidela: The plant seems to be a rarity in the Rare Earth field, as you’ve said that it is the only one of its kind outside of China which is primarily focused on processing the more precious Heavy Rare Earths. Please elaborate on why your focus will be on the processing of HREEs as opposed to LREEs.
Robert: KCMP is the only plant in the world outside of China I am aware of that has processed every HREE into oxides, metals and alloys. This plant also had a very successful track record of producing these high quality products for a variety of Soviet industries over a span of 30 years. With this purchase, we now have access to the important and valuable data records that were compiled during the decades that the plant was in operation. These records significantly decreases the technology risk associated with producing final high quality RE products. Given the sensitivity of the HREE production process, we recognize that many control mechanisms are necessary and without these historical records the level of testing that would need to be carried out to perfect the new processes within the plant would be very time consuming and expensive. So, by making this acquisition we believe that we have saved our company a great deal of time and money – which are two very precious commodities in the RE race. One last point . . . although there have been improvements in some technology and equipment designs since the plant was in production, much of the equipment on site still applies to modern day best practises. We are very confident that by focusing our efforts to refurbish KCMP, we can effectively accelerate our strategic business development plans to secure buyers of our final REE products.
Kidela: The facility and your mine are in the former Soviet republic of Kyrgyzstan. We understand a prominent Russian Metallurgical Institute will be involved in helping with the retrofit of the facility – could you elaborate?
Robert: Yes, you are correct in that we have a consulting agreement with the Leading Russian Research Institute of Chemical Technology (Russian acronym – VNIIHT). VNIIHT is an extremely well respected Chemical and Metallurgical organization. This state owned institute works with mining companies to assist them through all stages of their mining and processing development. We are extremely pleased to be working with the VNIIHT experts to help rebuild a new rare earth supply chain. We have received excellent input on how we can enhance the efficiencies of the metallurgical process and ramp up our output. Additionally, we will be consulting with the other Russian Institutes who designed the original expansion of the facilities.
Kidela: Can you tell us a bit about this facility, and the long history of Rare Earth mining in the area?
Robert: This facility is part of a complex that spans close to one million sq. ft. of space. The size and scope of this complex provides us with a number of production options going forward. With this purchase, Stans Energy will benefit from the Soviet practice of overbuilding their technological facilities. Just prior to the close of the mine, the Soviets built an extension to Plant 3 and brought in new equipment that was never installed and has been kept in storage ever since.
Kidela: Can you tell us about a few of the advantages you see in re-opening the plant in the area?
Robert: Yes, two significant advantages come to mind. The first is the people – fortunately, there hasn’t been excessive out migration of the population in that area. Many of the local residents either worked in the Kutessay II mine or at the REE processing facility. As a matter of fact, the former head of technology is the person who took us on our last tour of the facility. We are very excited to provide future opportunities to several former workers, many of whom have a tremendous base of education and experience with chemical technologies. The second reason would have to be the infrastructure. There is power, paved roads, additional buildings, a rail terminal, cranes, you name it.
Kidela: You say processing Rare Earths is very difficult and time consuming and can involve hundreds of complex steps. What can you tell us about your plans related to the equipment and the technological processes that will be used at the KCMP plant?
Robert: I’m not a RE technology expert and that is why upon the completion of this acquisition, we will be bringing in qualified consultants who are. One of our advisors, Dr. Valery Kosynkin, is one of the few people in this world who have designed and built an operational RE mine and final process. Valery will be directly involved in making sure we have the best equipment and solvents available in order to be successful. We are confident that our ability to master the complexity of REE extraction will be one of our competitive strengths. I’m not minimizing the difficulty, it is just that I am confident in our team’s ability to attract those who really understand this process – both from a practical and theoretical viewpoint. I believe Stans will be able to address any bottlenecks while also enhancing the efficiencies of extraction and I am eager to put this plan into action.
Kidela: What’s the timeline for getting the facility up and running?
Robert: We will have a better idea of that after our next trip. I leave for that trip this weekend.
Kidela: Now that you have acquired this facility and you get it functional again, what’s next for Stans Energy?
Robert: We have had an aggressive development schedule and looking forward that schedule doesn’t ease off. All I can tell you is that we know exactly where we are headed and we are confident that acquiring this processing facility now – just a little over one year from the day we bought the Kuttesay II mine – will demonstrate to our shareholders that we can, and are executing on our strategic plans.
IC Potash Files NI 43-101 PEA, Provides Corporate Update for Ochoa Project
IC Potash has made significant strides to become the lowest-cost producer of this premium, non-chloride-based potash fertilizer. Sulfate of potash sells at a 50% premium over the price of regular potash since it is better for saline and dry soils, and gentler on delicate crops such as fruit, vegetables, tobacco and horticultural plants.
IC Potash just filed a Canadian National Instrument 43-101-compliant technical report with the System for Electronic Document Analysis and Retrieval. This technical report is a significant milestone in the company’s development plans. The report describes the preliminary economic assessment of the company’s 100 % – owned Ochoa Project in New Mexico.
The bulk sampling program of sulfate of potash has commenced. The pre-feasibility study will begin imminently, estimating to require nine months and $3 million to complete. Environmental permitting work is to commence in the first quarter. The base case production level is expected to be 660,000 tons per year and the mine life is expected to be 40 years. The capital cost is $662 million with the operating cost projected to be $164 per ton.
For all the details, refer to the press release below.
IC POTASH FILES 43-101 PRELIMINARY ECONOMIC ASSESSMENT TECHNICAL REPORT FOR OCHOA PROJECT AND PROVIDES CORPORATE UPDATE
TORONTO, January 17, 2011 /CNW/ – IC Potash Corp. (“IC Potash” or the “Company”) (TSXV: ICP; OTCQX:ICPTF) is filing today on SEDAR (www.sedar.com) a Canadian National Instrument 43-101 compliant Preliminary Economic Assessment Technical Report of the Company’s 100 % – owned Ochoa Sulphate of Potash (“SOP”) Project (the “Preliminary Economic Assessment” or “PEA”). The project is located in south east New Mexico. The PEA report was prepared by Gustavson Associates of Lakewood, Colorado (“Gustavson”).
Other corporate update information:
* Bulk sampling program commenced;
* Pre-feasibility study to commence imminently;
* Environmental work to commence in first quarter; and
* Stock options awarded.
The bulk sampling program has commenced. Metallurgical testing and optimization will commence this January using potash resource previously obtained. Testing will include the optimization of calcination, leaching, solar evaporation and crystallization procedures. Testing will be carried out by Hazen Research, Inc. of Golden Colorado. Hazen has completed over 10,000 projects for clients, including pilot and demonstration plants and has expertise in industrial minerals processing, as well as in mineral hydrometallurgy, pyrometallurgy, inorganic chemicals, and commercial metals. “The completion of the report, which was announced on January 5 of this year, is a major achievement for IC Potash,” Mr. Sidney Himmel, the President and Chief Executive Officer of the Company, stated. “We are finalizing the assembly of the team to prepare the Pre-Feasibility Study. It is estimated that this study will require nine months to complete at an estimated cost of $3 million. Our mission is to develop a long-life, low cost mine to produce Sulphate of Potash, the premium quality potash of the world. We continue to move rapidly in that direction. The recommendations of the PEA include the completion of a pre-feasibility study, the commencement of environmental permitting work, and the obtaining of a sufficient bulk sample for metallurgical testing and process optimization. We are moving rapidly in all these directions with the goal of being one of the first junior companies to put a potash mine into production. And in this case it is based on Sulphate of Potash, the world’s quality potash which is sold at a premium price”
As previously reported, the PEA projects a base case production level of 660,000 tons per year of SOP, a mine life of 40 years and a capital cost of $662 million. Operating cost is projected to be $164 per ton. All dollars are in United States currency. Summary data for the project are:
* Internal rate of Return of 25% on a pre-tax basis based on a 100% equity case;
* Net Present Value of US $1.4 billion using a pre-tax discount rate of 10% and no debt;
* Net Present Value of US$2.1 billion using a pre-tax discount rate of 8% and no debt;
* Operating production cost of US$164 per ton of SOP;
* Capital cost of $662 million which includes a general contingency of $97 million and engineering and procurement and management costs of $48 million;
* Measured mineral resource of 239,000,000 tons at a grade of 82.7% polyhalite equivalent to 23.4% Sulphate of Potash, and indicated resource of 461,000,000 tons at a grade of 82.4% polyhalite equivalent to 23.4 % Sulphate of Potash, each of which with a cut-off thickness of 5 feet.
* Underground mining at a rate sufficient to produce 3.29 million tons of ore per year;
* Average mining extraction rate of 85%;
* Average metallurgical recovery of 85%
* Mine life of 40 years;
* The SOP sales price forecasts were provided by CRU, formerly known as British Sulphur Consultants. SOP prices for 2015 were forecast at $508 per short ton and subsequently varied upwards and downwards for projected macroeconomic trends and anticipated changes in SOP supply and demand. For 2025 and thereafter a price of $717 per short ton is used in the projections.
* While the project has the potential to produce SOP and other fertilizer minerals such as Magnesium Sulphate, the study included only SOP as this fertilizer mineral is readily marketable in a very robust market.
The PEA contains information on resource, proposed mining methods, mineral processing, hydrology, and entry into the Sulphate of Potash markets.
All scientific and technical disclosures in this press release have been prepared under the supervision of William J. Crowl, a consultant to IC Potash who is a Qualified Person within the meaning of National Instrument 43-101. The Qualified Persons in respect of the Preliminary Economic Assessment were William J. Crowl, R.G., Donald E. Hulse, P.E., Terre A. Lane, MAusIMM, Deepak Malhotra, MAusIMM.
The PEA is preliminary in nature. Although the PEA includes measured and indicated mineral resources, it also includes inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the projections in the PEA will be realized.
Awarding of Stock Options:
The Company granted on January 13, 2011, at a board meeting held after close of business, 700,000 options to acquire common shares of the Company (the “Options”) pursuant to the stock option plan of the Company and subject to regulatory approval. The Options were granted to an officer and to a consultant to the Company. The Options expire on January 13, 2016 and have an exercise price of $1.42, the closing price of the stock on the TSXV prior to the grant.
Forward-Looking Statements
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company, including, but not limited to, risks associated with mineral exploration and mining activities, the impact of general economic conditions, industry conditions, dependence upon regulatory approvals, and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
About IC Potash
IC Potash intends to become a primary producer of Sulphate of Potash (“SOP”) by mining its 100%-owned potash Ochoa property in New Mexico. SOP is a non-chloride based potash fertilizer that sells at a substantial premium over the price of Muriate of Potash (“MOP”), the most widely used fertilizer in the world. Typically SOP sells at a premium of 50% to MOP. ICP is focused on being the lowest cost producer of SOP in the world. The SOP market is six million tonnes per year. SOP is a significant fertilizer in the fruit, vegetable, tobacco, potato, and horticultural industries, and for agriculture in saline and dry soils and soils in which there is much agriculture with varieties of crops. Much of the agricultural soil in China, India, and the United States is salty. ICP’s Ochoa property consists of over 100,000 acres of federal subsurface potassium prospecting permits and State of New Mexico Potassium mining leases.
For further information: please visit www.icpotash.com or contact Sidney Himmel at 1-416-624-3781.
News from Stans Energy today...
Stans Energy Corp. Acquires Past-Producing Heavy Rare Earth
Processing Facility and Rail Terminal
Symbol - TSX-V: RUU
January 13, 2011
Stans Energy Corp. (TSX-V: RUU) (‘Stans’ or the ‘Company’) has reached an exclusive agreement with the majority owners of the Kyrgyz Chemical Metallurgical Plant (KCMP) (See Feb. 8, 2010 press release for option agreement details), to purchase 100% of KCMP’s Rare Earth (RE) processing complex, including a private rail terminal, for a total of $5,500,000 USD. The exclusive agreement is subject to a legal due diligence period and TSX Venture Exchange approval.
For almost three decades this facility produced 80% of the former Soviet Union’s RE products. The RE processing complex and the rail terminal were used to produce and transport materials, equipment, chemicals and final product to and from markets when the Kutessay II RE mine was last in production. The Kutessay II mine is now 100% owned by Stans Energy. At that time the processing facilities comprised of four individual plants that were part of a much larger industrial complex.
Historical Production Flow Sheet
Plant 1
Much of the past technology used in Plant 1 would not be used today, as newer Sorption technology has proved to be more efficient and less damaging to the environment when removing radioactive materials. Plant 1 has been decommissioned and will not be used in Stans’ new design.
Historically, RE feed from the Kutessay II mine was brought to Plant 1 to be refined into a new, higher grade concentrate. At this stage, the radioactivity was removed through roasting. Modern technologies have made this step redundant.
Plant 2
Plant 2 separated the mixed rare earth solution from Plant 1 and produced light rare earth (LRE) concentrate (La, Ce, Pr, Nd), middle rare earth (MRE) concentrate (Sm, Eu, Gd), heavy rare earth (HRE) concentrate (Tb, Dy, Ho, Er, Tm, Yb, Lu) and Yttrium Oxide. The equipment in Plant 2 is intact, but has been removed from the building and stored at a location 4 km away for security purposes. Stans intends to refurbish and reassemble Plant 2.
Plant 3
Plant 3 separated the MRE and HRE concentrates into final oxides, metals and alloys. This Plant was where the various complexing, elutriation, and regeneration solutions were prepared. The process was carried out on a batch system where the conditions in the ion exchange columns (linear flow, solution, complexing, elutriating solution concentration solution, etc.) were specific for each REE. The Rare Earths were then precipitated as the oxalate (carbonate), filtered and washed and then dried and calcined to rare earth oxide (REO). The RE metal section involved the production of metals from the REOs through various electrical, induction and arc furnaces.
The Soviets never used Plant 3 to its full capacity as uses for HREEs were limited between 1965 and 1990. In the late 80s, the Soviets initiated plans for the Plant’s expansion to process 3-4 times the amount at which it was operating. The industrial building expansion was completed when the Plant stopped operating in 1991, and some new equipment is on site but not installed.
The Plant continued to process remaining small amounts of HRE concentrate into final metals up until 2009. The last of its HREE concentrate and final products were sold in 2010. Plant 3 is in good working condition.
Plant 4
Plant 4 separated light rare earth concentrate from Plant 2 into individual rare earth oxides. Like Plant 2, much of the equipment from Plant 4 was removed and stored at a secure location. A feasibility study will determine whether Stans Energy sells light rare earth concentrate derived from Plant 2, or reassembles Plant 4 to produce final oxides.
Rail Terminal
The newly purchased rail terminal connects to the Central Asian Rail Network, which connects to Russia and all countries in Asia including China, Korea, and by ferry to Japan. The purchase of the Rail Terminal includes a gantry crane, two warehouses, two offices, and a weigh station. The land purchased with the rail terminal amounts to 143,500 m2. The rail terminal is roughly 15 km from the KMCP Processing Plants by paved road, and is roughly 35 km away from the Kutessay II mine by paved road.
Equipment Inventory and Industrial Space
In an independent assessment of the equipment, it was determined that 97% of the equipment purchased that was previously used for processing rare earths were in either good, or satisfactory operating condition, and only 3% required repair. Stans is currently compiling and translating a full list of the inventory included in the purchase to be posted to its website at a later date. The total industrial space in Plants 2 and 3 is 21,812 m2.
Capacity Old & New
Previously, the entire plant operated at approximately 500 mt/annum of final rare earth product. During its time in operation, its capacity varied depending on which products were needed and at what purities. 120 different final rare earth products were produced, including oxides, metals and alloys of all lanthanides with purities up to 99.99%. In the late 80s, the Soviets initiated plans to expand the operating capacity to 1500 mt, but never finished the expansion. Stans Energy will provide its estimates to expand the capacity of the processing complex at a later date. A feasibility study will commence shortly to determine the optimal scale at which to bring Kutessay II back into production.
Upon the completion of the transaction, Stans Energy will engage the Russian Institutes that designed and built KCMP to help redesign and refurbish the Facilities to create a new, efficient rare earth supply source. New technologies and solvents that were unavailable during the Soviet era will be tested in an effort to improve the Plant’s efficiency.
Stans Energy is currently in discussions with interested parties related to financing the purchase of the RE processing complex and other business initiatives.
Robert Mackay, President and CEO, stated, “The acquisition of the KCMP RE Processing Plants and Rail Terminal is the culmination of many months of hard work and due diligence by Stans Energy and a variety of consulting parties. Owning a processing facility is the next significant step in the implementation of our business plan to become a major developer and producer of HREEs. It is my hope that restarting this facility will help to reestablish the once vibrant community in the town of Orlovka, where KCMP is located.”
For additional information, please contact:
Robert Mackay
President and CEO, Stans Energy Corp.
Ph. 647 426 1865
Email: robert@stansenergy.com
Jonathan Buick
Investor Relations, The Buick Group
Ph. 416 915 0915
Email: jbuick@buickgroup.com
This release may contain "forward-looking statements" within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this document. The Company disclaims any intention or obligation to update or revise any oral or written forward-looking information and statements whether as a result of new information, future events or otherwise, except as required by applicable law. Accordingly, readers should not place undue reliance on forward looking statements.
The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Stans Energy Corp. Reports on Round Table Rare Earth Meeting at the Canadian Embassy in Moscow
In November, 2010, Stans Energy Corp (TSX-V: RUU) (‘Stans’ or the ‘Company’), in cooperation with the Canadian Embassy in Russia, organized a round table discussion to start a trilateral business initiative between Russia, Kyrgyzstan, and Canada to create a new rare earth products supply chain. There were 19 individual invitees representing the Russian Subsoil Agency, its Licensing Department, The Russian Academy of Sciences, Ministry of Natural Resources of the Russian Federation, The All-Russian Research Institute of Chemical Technology (VNIIHT), Macleod Dixon law firm, The Embassy of the Kyrgyz Republic, Stifel Nicolaus Weisel, Cisco Systems, International Trade Canada and Stans Energy Corp.
The meeting outlined the tasks that need to be accomplished to achieve the goal of securing a rare earth supply to the participating countries and to the world experiencing a supply shortage. We would like to acknowledge constructive input provide by Vice-President of Russian Academy of Science, Academician Nikolai Laverov, who was in charge of the Soviet Union Rare-Earth production program.
Pursuant to Stans’ press release on September 13, 2010, Stans and its Russian partners are completing their survey of the Rare Earth potential of Russia, and will continue further due diligence on selected heavy rare earth properties for joint acquisition.
For additional information, please contact:
Robert Mackay
President and CEO, Stans Energy Corp.
Ph. 647 426 1865
Email: robert@stansenergy.com
Jonathan Buick
Investor Relations, The Buick Group
Ph. 416 915 0915
Email: jbuick@buickgroup.com
Report Compares Quest and Other Top Rare Earth Element Mining Companies
In a new 14 page report, we have taken a comparative look at 10 of the top Rare Earth Element mining companies around the world. The information within was obtained from publicly available sources and it has been categorized into simplified lists of specific information relating to key benchmarks.
Some of the things you'll find inside include companies, locations, feasibility, mining licenses, milling capabilities, production timelines, infrastructure, REO values, and much more.
The report is very comprehensive, yet easy to digest. To get your copy, simply go to:
http://www.kidela.com/ree-comparisons
Report Compares Great Western and Other Top Rare Earth Element Mining Companies
In a new 14 page report, we have taken a comparative look at 10 of the top Rare Earth Element mining companies around the world. The information within was obtained from publicly available sources and it has been categorized into simplified lists of specific information relating to key benchmarks.
Some of the things you'll find inside include companies, locations, feasibility, mining licenses, milling capabilities, production timelines, infrastructure, REO values, and much more.
The report is very comprehensive, yet easy to digest. To get your copy, simply go to:
http://www.kidela.com/ree-comparisons
Report Compares Avalon and Other Top Rare Earth Element Mining Companies
In a new 14 page report, we have taken a comparative look at 10 of the top Rare Earth Element mining companies around the world. The information within was obtained from publicly available sources and it has been categorized into simplified lists of specific information relating to key benchmarks.
Some of the things you'll find inside include companies, locations, feasibility, mining licenses, milling capabilities, production timelines, infrastructure, REO values, and much more.
The report is very comprehensive, yet easy to digest. To get your copy, simply go to:
http://www.kidela.com/ree-comparisons
Stans Energy Corp is already gaining significant recognition as one of the leading Heavy Rare Earth companies outside of China. This recognition comes from their favourable and very high ratio of Heavy to Light Rare Earths that is unlike many other projects around the world.
In addition to their Heavy to Light REE ratio, Stans already has: a mining license; an exclusive option on a HREE processing facility 40 km away; and an existing and extensive infrastructure in place at their mine site. This infrastructure was used to support their open pit mine site during the first 30 years of production. Under the soviet method of mining, their Kutessay II REE mine is estimated to have a 75 year mine life. Stans is working on a design that will scale up their production at the site by over three times as compared to the soviet design. Accurate mine life estimates will be reported once a feasibility study is completed in 2011.
However, today the company pulled the covers back to unveil another tremendous asset they hold for their shareholders. Stans has announced that they have undertaken the process to carry out an important JORC study on their potentially very large Beryllium deposit called Kalesay.
Stans also owns a very important mining licence for the Kalesay Beryllium Deposit that they acquired in December of 2009. The Kalesay Deposit is located just 200 metres (m) east of their Kutessay II past-producing rare earth mine. This means that all of the existing infrastructure that helps to make their REE deposit so attractive could also be used for the Beryllium Deposit as well. This would definitely reduce the company’s capital development costs which are factored into any future feasibility study.
Given the historical tonnage estimates at the site (which the JORC will quantify) and the current market price of Beryllium, Stans Energy’s Beryllium deposit could end up being worth several billions of dollars.
For full details, head over to: http://www.kidela.com/stans-energy-corp/jorc-kalesay-beryllium-deposit
Can America Regain the Rare Earth Elements Crown?
Read the full article at: http://www.kidela.com/kidela/can-america-regain-the-rare-earth-elements-crown
A rare earth element is like air. It only seems to become important when you are running out.
Can America Regain the Rare Earth Emelents Crown?With China suddenly cutting back on exports while controlling 95 percent of the world’s production of rare earth elements, the United States and other countries suddenly finds themselves vulnerable. This vulnerability has to do with the stability of the supply of these strategic commodities. Countries from around the world have suddenly woken up to the realization that the future of their high technology industries could be in the hands of one supplier – China.
In the USA, this realization comes at a time when the Obama administration has committed the United States to replacing more than a million gasoline powered cars with hybrid and electric cars by 2015. These cars – referred to as “green” vehicles – use A LOT of rare earth elements in their power trains. Reducing the US’s reliance on foreign oil is one motivation for moving to green cars. However, given the current situation, and unless alternative supply sources are found – soon – it appears that the US might be replacing a dependence on one commodity (oil) for reliance on a much more difficult to find and more expensive one (Rare Earth Elements – REEs). And these REEs are almost exclusively available from its main trade rival. Somewhat belatedly the USA has discovered the looming crisis in rare earth availability and has only recently begun to look at securing domestic supplies and rebuilding its supply chain.
“If we don’t think this through, we could be trading a troubling dependence on Middle
Eastern oil for a troubling dependence on Chinese neodymium.”
Irving Mintzer, Senior Adviser, Potomac Energy Fund
American rare earth dominance ends only recently
And yet, it didn’t have to be this way. Given China’s near monopoly in rare earths production it might come as a surprise to learn that the United States was the world’s leading producer of rare earths as recently as 1995.
Until 1948, most of the world’s rare earths were mined in India and Brazil. In the 1950s, South Africa assumed the status of world’s leading rare earth source, but a single mine in the United States eventually overtook South Africa’s production output. From the late 1950s, into the mid-1980s the Mountain Pass rare earth mine in California was the world’s leading producer of REEs.
The deposits at Mountain Pass were discovered in 1950 by two prospectors who found a radioactive outcrop and assumed they had located a source of uranium. The prospectors were disappointed to learn that their claim did not contain uranium but rather flouro-carbonate bastnaesite. This mineral was completely worthless to them but was very interesting to the US Geological Survey. The Geological Survey undertook further surveys and discovered non-radioactive deposit of bastnaesite. One of the two original prospectors who found the deposit worked for MolyCorp and he persuaded the company to claim the land although it didn’t exactly know what to do with its rare earth ore. MolyCorp spent the next two decades developing a market for the rare earth elements found in its mine: Cerium, lanthanum, samarium, gadolinium, neodymium, praseodymium and europium.
Throughout the 1970s and 1980s, the Mountain Pass mine produced more than 70 percent of the world’s supply of these valuable minerals. At the peak of its operations, the mine produced 20,000 tonnes of rare earth oxides a year.
However, during the mid-90’s commodity prices bottomed out and the mine found it increasingly difficult to compete with cheaper Chinese imported rare earths. In 1998, after hundreds of thousands of gallons of water carrying radioactive waste spilled into and around Ivanpah Dry Lake, the chemical processing at the mine was stopped and the mine shut its doors. After the California mined closed, China assumed the mantle of world leader in rare earth extraction.
Whether focusing on REEs was a deliberate and clever trade strategy or a happy accident, China now had firm control of the world supply of REEs. And while demand remained stable and China exported its REEs at low price points, the US became complacent. Remaining REE stockpiles around the country were sold off and the US as a whole let the REE market completely get away from them.
Scrambling to catch up
Fast forward to 2010, and we find that the demand for rare earths has risen considerably given all of the recent discoveries of additional technological uses for the minerals. Just as REE demand has started to ramp up, China began to restrict exports. The US, like other nations, is scrambling to react and get back in the game. However, ramping up a dormant industry is costly and requires a great deal of time. Obtaining a mining license and the associated environmental permits can be described as a regulatory equivalent of a very long cross country steeple chase.
“When you stop mining in this country, as investment goes down, expertise
on cutting-edge technologies is exported as well.”
Carol Raulston, National Mining Association.
Restarting a mine is no easy task. Environmental regulations in 2010 are considerably more stringent than they were back in the 1970s, costs are multiples of what they were and there is also the challenge to find the expertise needed to mine and process these elements.
While there may be a number of prospective rare earth element sites around the world, the challenge mining companies have is that they have to pay for and put the infrastructure and processes into place necessary to mine and process them.
Until that time, relying solely on Chinese exports does not seem to be an option for the US any longer. The supply chain for a number of commercial and defense related industries has already begun to break down. A Government Accountability Office (GAO) report from April 2010 identified four rare earth element shortages that have already caused some kind of weapon system production delay.
The US government is examining its options. Some of these include: stockpiling REEs supplies, securing other suppliers from around the world and allocating and redirecting REE purchases for defense and national security purposes.
US mining industry lobbies for domestic support
Given its past dominance, it is argued the US has the reserves and capacity to more than meet its domestic needs. Similar efforts have been undertaken in Canada and Australia and both countries are in the early stages of rebuilding the necessary infrastructure.
According to the U.S. Geological Survey, there are 13 million tons of extractable rare earths in the United States, 5.4 million in Australia, and 19 million in Russia and neighboring countries. In 2009, China had 36 million tons.
The US mining industry is acutely aware of the challenges in restarting the US rare earth industry including securing large amounts of investment capital in this rough economic climate. Other challenges include the need to develop and implement advanced mining techniques, and the need to meet stringent environmental impact stipulations. There is also a pressing need for greater domestic research and development efforts related to refining techniques. The process will be a long one and it is has been expected that the return of the US REE industry to former levels will take a decade or more.
“I would say conservatively the earliest that we could open a mine has to be six to seven years.”
Edward Cowle, President and CEO U.S. Rare Earths
Not your grandfather’s rare earth mine
MolyCorp’s rare-earth separation plant at Mountain Pass, resumed operations in 2007. This year, MolyCorp began using stockpiled rock that was mined under a previous permit and employed new separation technologies. The company expects to sell 3,000 tons of rare earths in 2011 and by 2012. MolyCorp expects to eventually produce 20,000 tons a year, and produce rare-earth products at half the cost of the Chinese. However, the company cannot use the processes used in the mine’s heyday: processes that are both economically and environmentally unsustainable. According to the company, their new techniques are both more environmentally sound and save money, techniques such as eliminating the production of waste saltwater. MolyCorp will use a closed-loop system, converting the waste back into the acids and bases required for separation and eliminating the need to buy and transport dangerous chemicals. The company will also install a natural-gas power co-generation facility on site to cut energy costs.
To continue reading, please visit: Read the full article at: http://www.kidela.com/kidela/can-america-regain-the-rare-earth-elements-crown
Lithium One Announces Joint Venture in Argentina with Multi-National Korean Partners
In 2008, Warren Buffett surprised everyone by investing in a little known Chinese Lithium battery production company – BYD. When studying the implications of this investment, people began to realize that this lithium battery manufacturer was also expanding into car manufacturing. By manufacturing lithium powered electric vehicles, BYD planned to transform the auto industry in China.
Patrick Highsmith – President and CEO of Lithium One puts the transition that is taking place in the auto industry into perspective. “Toyota is projecting production of 2.5 million lithium-powered hybrid cars by 2015, and between 2015 and 2020 they expect hybrids to phase out and full electric to come on. A general point of view is that at least 10% of the cars sold in 2020 will be either hybrid or electric. This is 6 to 8 million vehicles.” Estimates are that full electric cars will require approximately 10 times more lithium than a hybrid car which will do much to increase lithium demand.
Battery and auto makers in Korea and Japan have responded by setting out to secure a consistent source of their own lithium supply. In addition to hybrid electric cars, lithium is used in the pharmaceutical industry, air conditioning systems, alloys for aerospace applications, aluminum production, in greases, and ceramics and glass. Lithium is relatively abundant, however ensuring that the supply of the mineral meets the rigorous specifications of end users with respect to the quality and purity is essential.
Lithium is so important to the future economies of producing nations that they have set out to lock up consistent and secure sources of supplies. For example, Korea has designated Lithium as a strategic commodity and has launched an initiative named Battery 2020. The South Korean government is backing this initiative with 15 trillion won ($12.5 billion U.S.) in an effort to have their nation become the world’s dominant rechargeable battery producer within the next ten years.
Lithium One (TSXv: LI), a Canadian based Lithium mining company, has taken a bold step into the ring after announcing the addition of a group of Korean heavyweights to the joint venture that will develop LI’s Lithium project in Argentina.
LI’s partners in this development project include: the Korea Resource Corporation, (“KORES”) which is a state-owned corporation of the Government of the Republic of Korea. Its mandate is to pursue resource development opportunities to supply Korea’s expanding industrial economy. GS Caltex Corporation (“GS Caltex”) is one of the largest energy companies in Korea and is jointly owned by GS Holdings and Chevron. GS Caltex’s goal is to become a globally competitive total energy service provider. And last but not least, LG International Corp. (“LG International”). This arm of the LG Group specializes in natural resources exploration and development projects, and is the trading company for the LG Group.
“Demand for lithium is increasing from the current market of 100,000 tons Li2CO3 equivalent.
Overall demand for lithium is growing at a rate of 4-5% per year while demand for lithium
destined for battery usage is predicted to grow by 20% per year.”
- USGS
Patrick Highsmith commented on this agreement by saying “We have a relationship with a government that has named lithium as a strategic commodity and a country that produces 38% of the world’s rechargeable batteries and also has the fastest growing automotive company in the world (Hyundai).”
Highsmith may have his timing down pat as today The General Electric Co. (GE) announced that they “ . . .will purchase 25,000 electric vehicles by 2015, a move that marks the largest ever electric vehicle commitment.” 12,000 of those vehicles will be the GM Volt, which are powered by cells from LG’s lithium ion battery company, Compact Power.
Realizing that LI now is in business with some of the world’s largest companies who are hungry for lithium, and given that Warren Buffet recognized early on that lithium can be at the heart of a great investment, it will be interesting to see what fortunes the quest for lithium will power next.
For more on this story, visit Kidela:
http://www.kidela.com/lithium-one/joint-venture-argentina-korean-partners
Homopolar Motor – Powering the Future?
Our goal in creating this short video was to provide a simple yet practical demonstration of how Rare Earth Elements – in this case Neodymium in a magnet – really could one day be an integral component in a clean energy solution for the world.
You can view this short video at Kidela.com:
http://www.kidela.com/kidela/homopolar-motor
TheInvestar's Matthew B. Smith recently sat down with Stans Energy CEO, Robert Mackay. They discussed Stans' REE projects, the upcoming JORC, future goals, and a whole lot more. It's very much with the read.
http://www.stansenergy.com/press-releases/robert-mackay-stans-energy-investar-interview/
Quick Video: The Rare Earth Element (REE) Market
In this short video (1:23 long), we take a look at the REE Market.
Watch the Video: http://www.kidela.com/stans-energy-corp/rare-earth-element-ree-market
Video: VNIIHT Partnership with Stans Energy
The Russian Leading Research Institute of Chemical Technology (legal Russian acronym – VNIIHT) is a state owned research institute that specializes in the development of advanced technologies for exploration, processing and production of rare earth, rare-metals, precious metals, and uranium ores.
On September 13, 2010 Stans Energy Corp. signed a memorandum with VNIIHT to jointly peruse the potential rare earth acquisitions.
Watch the Video at: http://www.kidela.com/stans-energy-corp/vniiht-partnership-stans-energy
A Quick Look at the Infrastructure of Stans Energy (Video)
In this short video (only 55 seconds), we take a close look at Stans Energy’s infrastructure. Stans’ Kutessay II mine has a lot going for it, with paved roads, rail nearby, electrical power and a source of water. This gives Stans a significant time, cost and resource allocation advantage over others.
Watch the Video: http://www.kidela.com/stans-energy-corp/video-stans-energy-infrastructure
Video: The Properties of Stans Energy
In this short video, we take a look at the properties of Stans Energy, including the Kutessay II mine and Kutessay III mineralized zone. You’ll also be able to read our notes, which include the key bullet points and takeaways.
To watch the video, click the link below:
http://www.kidela.com/stans-energy-corp/mining-properties-kutessay-ii-iii
Quick Video: The Advantages of Stans Energy
Stans Energy has many advantages on its side. In a new video (link below), we break these advantages down into a clear and concise format. We also share some key points and takeaways for your reference.
http://www.kidela.com/stans-energy-corp/advantages-of-stans-energy-corp-video
Stans Energy 'Quick Facts' Videos
Check out these 'Quick Facts' videos on Stans Energy. Very much worth the watch if you have a few free moments:
http://www.stansenergy.com/more/quick-facts/
Stans Energy Chair Rodney Irwin Meets Kyrgyz President Otunbayeva
The Kyrgyz Opportunities Forum, held September 23 in New York City, provided the perfect opportunity for President of the Kyrgyz Republic H.E. Roza Otunbayeva to meet with investors and business people working within the Republic.
President Otunbayeva was in New York to discuss opportunities for cooperation, investment and trade with both US and Canadian companies. She attended the Forum, organized by the Kyrgyz-North America Trade Council and Chadbourne & Park LLP.
The conference brought together a wide variety of delegates who came to New York to network and hear presentations by speakers such as Ambassador Robert O. Blake, Assistant Secretary of State, South and Central Asian Affairs, at the U.S. Department of State; Rodney Irwin, Chairman of the Board of Stans Energy Corp, Frank Herbert from Centerra Gold; Hugh Mckinnon from Kentor Gold; and speakers and representatives from a number of Kyrgyz government agencies.
Rodney Irwin, who is not only Chairman of Stans Energy, but also Canada’s Former Ambassador to Russia and the current Honorary Consul of the Kyrgyz Republic for Canada also presented.
Read the full article at http://www.kidela.com/stans-energy-corp/stans-energy-robert-irwin-kyrgyz-president-roza-otunbayeva
Stans Energy's Robert Mackay (and other execs) Discuss Perspectives on Business in Kyrgyzstan:
http://www.kidela.com/stans-energy-corp/centerra-stans-energy-and-chaarat-executives-our-perspective-on-business-in-kyrgyzstan