Episode 187 of Coffee with Samso is with Guy Le Page, Non-Executive Director of Mount Ridley Mines Limited (ASX: MRD). Mount Ridley is now at the business end of the Rare Earth journey.
Mount Ridley Mines is now focusing on the flow chart of the REE business. This is the money end, can you make the processing part cash flow positive?
When I had my first Coffee with Samso with Guy Le Page, in July 2022 (Mount Ridley Mines Limited (ASX:MRD) - A Rare Earth Story.), it became evident that the company had a strong focus on optimising their flow chart. The company was confident in their ability to achieve the desired tonnage and grade, but their primary emphasis was on the final stage.
In my view, one of the major benefits for companies like Mount Ridley is their project's location in the Esperance region. Numerous discussions have highlighted the region as the ideal site for the government to establish a Rare Earth Hub.
Check out the conversation in this Coffee with Samso and, as I always encourage, DYOR.
Chapters
00:00 Start
00:20 Introduction
01:10 Updates on the Mia Project
02:45 Beneficiation Results
03:55 Leach Test Results
04:59 Is Mia the main focus of Mount Ridley?
06:01 Mia prospect air-core drilling
06:37 Discussion about the soft REE market
09:05 Q&A from the public
09:19 Is MRD still going to list on the Frankfurt Exchange?
09:46 What is MRD’s strategic roadmap beyond 2023?
10:59 How is MRD taking a position for success amongst Esperance peers?
11:59 Is using HCL costly? And what about government grants?
13:03 Has MRD determined the controls in the clay-hosted REE project?
15:24 Prediction of the path of the REE market as we move forward
17:01 What makes MRD stand out?
18:20 Discussion about the REE market
20:17 Conclusion
Samso's Conclusion
When investing in the Clay Rare Earth sector, it is crucial to consider the economic viability of the processing flow sheet, and, while the industry has yet to determine its profitability, this does not mean it won't become a viable option. However, it is important to acknowledge that the industry is still in its early stages, and there will be a steep learning curve filled with uncertainty.
The industry has successfully identified the process of leaching out the Rare Earth Elements (REE), but the economic outcome in terms of profitability remains uncertain. The REE sector, including both hard rock and "Clay/ionic/alluvial" types, has gained attention in investment circles due to recent geopolitical developments.
China's dominance in this sector is widely recognised and understood. The previous discussion on REE in the investment community was short-lived in 2010, as the market experienced rapid fluctuations. However, the current rise of the REE sector has shown more resilience, having been present for a couple of years, largely due to the new "cold war" with China.
Balancing the REE sector will require time, and investors in this sector must cultivate patience, akin to the patience required for fishing. It is frustrating to continually emphasize that mining projects are measured in terms of years to decades, while investors, particularly new ones, expect quick results within weeks or months.
Unfortunately, such quick results are unlikely to occur. Regarding Mount Ridley, they have a solid strategy, and recent results indicate a viable business. However, the investment community needs to learn to be patient and learn to "PARK" their money.
PODCAST
About Guy Le Page
Non-Executive Director
B.A., BSc (Hons), MBA, MAusIMM, FFIN
Mr Le Page is currently a Director & Corporate Adviser of RM Corporate Finance specialising in resources. He is actively involved in a range of corporate initiatives from mergers and acquisitions, initial public offerings to valuations, consulting and corporate advisory roles.
Mr Le Page was Head of Research at Morgan Stockbroking Limited (Perth) prior to joining Tolhurst Noall as a Corporate Advisor in July of 1998. As Head of Research, Mr Le Page was responsible for the supervision of all Industrial and Resources Research. As a Resources Analyst, Mr Le Page published detailed research on various mineral exploration and mining companies listed on the Australian Securities Exchange. The majority of this research involved valuations of both exploration and production assets.
Prior to entering the stockbroking industry, he spent 10 years as an exploration and mining geologist in Australia, Canada and the United States. His experience spans gold and base metal exploration and mining geology, and he has acted as a consultant to private and public companies. This professional experience included the production of both technical and valuation reports for resource companies.
Mr Le Page holds a Bachelor of Arts, a Bachelor of Science and a Masters’ Degree in Business Administration from the University of Adelaide, a Bachelor of Applied Science (Hons) from the Curtin University of Technology and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.
About Mount Ridley Mines Limited (ASX:MRD)
Mount Ridley Mines Limited is undertaking the exploration of a significant deposit of valuable clay-hosted rare earth elements in Western Australia. The Project was initially acquired for its nickel and copper sulphides potential and is now recognised as being prospective for ionic clay REE deposits.
Currently, this style of deposit is mined and processed only in China and Myanmar.
In November 2020 Mount Ridley Mines Limited (“MRD”) commenced a review of data for its namesake Mount Ridley Project and surrounding area.
The review concluded that areas of the Biranup and Nornalup geological provinces in south-eastern Western Australia have the potential for REE mineralisation, and in particular, the style of mineralisation referred to as Ionic Adsorption Clay (IAC-REE).
Globally, deposits of IAC-REE are most significant in southern China and are the world’s main source of heavy Rare Earth Elements.
The Project
REE mineralisation occurs as large, horizontal, near surface, sheet-like lenses up to a depth of 89 metres. REE mineralisation is interpreted to be present within the in-situ saprolite clay horizon. Patchy lower grade zones occur within transported cover which may vector towards stronger REE mineralisation deeper within the regolith.
Geological Survey of Western Australia (DMIRS) mapping [Figure1] shows that the Mount Ridley Project REE mineralisation occurs within the weathered mantle (regolith) of the Recherche Super-suite, which is described as “granitic and mafic gneiss; may include intrusions of Esperance Super-suite”.
While the source of the REE mineralisation is currently unknown, a detailed sample and litho-geochemistry dataset from bottom of hole aircore samples has been established which includes whole-rock chemical analyses, sample pulps and some end-of-hole air core samples. These samples and data are being studied by the Company’s consultant geochemist to identify the primary rock-type and whether units are REE-enriched.
Re-assay of 950 air core samples (162 pending) returned significant REE values over an apparent strike in excess of 25 km with over 20 samples returning >1,000 ppm Mineralisation remains open in all directions with a peak value so far at the Keith’s Prospect from MRAC0711 with 10,461ppm (1.05%) from 23m downhole.
Significant REE intersections have been identified and grouped into 5 prospects – Winston’s, Keith’s, The Lake, Tyrell’s and Marcellus.
Planning underway for a 25,000m aircore program to test newly acquired tenements in addition to step-out and infill holes.
Disclaimer
The information or opinions provided herein do not constitute investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not take into consideration, nor have any regard to your specific investment objectives, financial situation, risk profile, tax position and particular, or unique needs and constraints. Read full Disclaimer.
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