| This company could soar as it loosens China’s death grip on REEs | | | Please find below a special message from our advertising sponsor, Defense Metals. Golden Opportunities is a free service that gives you valuable investment intelligence all year long at no charge, and advertisements allow us to continue sending these reports. | |
| The Rare-Earth Company Capitalizing On Two Irreversible Trends | |
The “Green Revolution” and increasingly tense U.S.-China relations are driving the demand for North American sources of rare earth element (REE) production and processing.
It’s a confluence of trends that’s putting Defense Metals (DEFN.V; DFMTF.OTC) squarely on investors’ radar screens.
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China has had a choke-hold on rare earth element production for years.
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But with REEs becoming more valuable by the year for both green energy and defense applications, the rest of the world is actively looking to break that choke-hold.
The need is particularly acute in the U.S., where the intensifying cold war with China and the Biden administration’s ambitious green energy plan are putting a premium on the need for domestic — or at least North American — sources of these elements.
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And while speculation on U.S. moves to wean itself from China’s REEs has sent some stocks higher, there are still some ways to play this trend.
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With a still-tiny market cap and a sizeable resource rich in two of the most strategic rare-earth elements, Defense Metals (DEFN.V; DFMTC.OTC) is making itself a go-to play in the entire sector. 1
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A Powerful National Security Driver
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Defense Metal’s British-Columbia-based Wicheeda REE project puts the company at the confluence of the resource security and Green Revolution trends.
On the resource security front, the need for domestic supplies of REEs is stark.
These elements are irreplaceable in a variety of defense applications, including:
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• guidance and control systems
• electronic jamming devices
• high-powered laser targeting
• line-of-sight laser communications
• next-generation fighter jet manufacturing
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And yet these mission-critical applications are currently at the mercy of China’s dominance in REE production and processing.
China controls over 80% of the market.
Even with a recent change of U.S. administration, the focus continues to be on finding more geopolitically friendly sources of supply.
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Vital To The Green Revolution As Well
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Then there’s the Biden administration’s push on climate change.
As an opening salvo on that effort, the president recently announced an intent to change over the government’s vehicle fleet to electric vehicles (EVs).
Whatever one thinks about the practicality of this program, it’s a fact that, if acted upon, it will put a premium on domestic manufacture of EVs.
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The U.S. government currently has more than 645,000 vehicles in its fleet, and one of the key inputs for the magnets within EV motors is the REE neodymium.
You can be sure that, in implementing this fleet change, a premium will be put on finding non-China sources of this and other key inputs.
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A North American Resource Rich In Key REEs
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And when the government goes looking for potential sources of those REEs, its gaze should fall naturally upon the sizeable (and easily-accessible) resource Defense Metals has outlined in central British Columbia.
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Located on a forest road that connects to nearby Highway 97, its Wicheeda project has all the makings of a critical source of U.S. REE supply.
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Nearby infrastructure includes a major hydroelectric power line, a gas pipeline and a trained workforce.
This accessibility gives Wicheeda an advantage over many other REE deposits, which tend to be in remote places.
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According to the most recent, 2020 resource estimate for Wicheeda, it contains an indicated resource of 4.89 million tonnes grading 3.02% light rare earth oxide (LREO) and an inferred resource grading 12.1 million tonnes of 2.90% LREO.
Flotation pilot-plant processing of a 26-tonne bulk sample of Wicheeda REE material yielded a mineral concentrate averaging 51.6% LREO, including 7.4% NdPr oxide (neodymium-praseodymium) at average recoveries of 77.3%.2
Neodymium and praseodymium are two critical magnet REEs that are in especially high demand.
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Everything’s Moving In
Defense Metals’ Direction
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Moreover, events both external and internal are very much moving in the company’s direction.
On the external side, the Biden administration has awarded a Defense Production Act Title III agreement to Australian company Lynas Rare Earths to set up an LREE separation plant in Hondo, Texas.
Lack of end-product processing capacity in the U.S. has kept past resources in North America from getting to the production stage.
Assuming this plant gets built, Defense Metals should have a ready-made buyer for the LREE concentrate it would produce at Wicheeda.
Which brings us to the series of internal catalysts set to power the company in the days just ahead:
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• First up will be a preliminary economic assessment (PEA), expected to be completed in the first half of 2021
• Initiation of a hydrometallurgical pilot-plant test using high-grade mineral concentrate generated from the 26-tonne flotation pilot plant
• Subject to recommendations of the PEA, drilling designed to upgrade existing resource categories and potentially expand the Wicheeda REE deposit to the north
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The REE story is already beginning to catch fire and the best of the stories in this sector are poised for big runs.
But it’s hard to think of a single company out there with a resource and string of value-creating catalysts like those in Defense Metals’ near future.
The time to discover this opportunity is now, before it makes headlines. Click below to learn more….
| | | | [1] National Instrument 43-101 Technical Report on the Wicheeda Property, British Columbia, effective June 27, 2020 and prepared by APEX Geoscience Ltd. (Steven J. Nicholls, B.A. Sc., MAIG and Kristopher J. Raffle, B.Sc., P.Geo) is available under Defense Metals’ profile on SEDAR (www.sedar.com).
[2] See Defense Metals News Release dated September 23, 2020
Scientific and Technical Information
The scientific and technical information contained in this document has been reviewed and approved by Kristopher J. Raffle, P.Geo. (BC) Principal and Consultant of APEX Geoscience Ltd. of Edmonton, AB, a director of Defense Metals and a “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Technical Report
National Instrument 43-101 Technical Report on the Wicheeda Property, British Columbia, effective June 27, 2020 and prepared by APEX Geoscience Ltd. (Steven J. Nicholls, B.A. Sc., MAIG and Kristopher J. Raffle, B.Sc., P.Geo) is available under Defense Metals’ profile on SEDAR (www.sedar.com).
Forward-Looking Information
This document includes certain statements that constitute “forward-looking information or statements” within the meaning of applicable securities law, including without limitation, Defense Metals’ expectations for its deposit, plans for its project, completion of the PEA, as well as other statements relating to the technical, financial and business prospects of Defense Metals and other matters. Readers are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to
put undue reliance on forward-looking statements due to the inherent uncertainty of such statements. Forward-looking statements address future events and conditions and are necessarily based upon a number of estimates and assumptions. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Forward-looking statements are subject to a variety of risks and uncertainties, which could cause
actual events, level of activity, performance or results to differ materially from those reflected in the forward-looking statements, including, without limitation: (i) risks related to rare earth elements, and other commodity price fluctuations; (ii) risks and uncertainties relating to the interpretation of exploration results; (iii) risks related to the inherent uncertainty of exploration and cost estimates and the potential for unexpected costs and expenses; (iv) that resource exploration and development is a
speculative business; (v) that Defense Metals may lose or abandon its property interests or may fail to receive necessary licences and permits; (vi) that environmental laws and regulations may become more onerous; (vii) that Defense Metals may not be able to raise additional funds when necessary; (viii) the possibility that future exploration, development or mining results will not be consistent with Defense Metals expectations; (ix) exploration and development risks, including risks
related to accidents, equipment breakdowns, labour disputes or other unanticipated difficulties with or interruptions in exploration and development; (x) competition; (xi) the potential for delays in exploration or development activities or the completion of geologic reports or studies; (xii) the uncertainty of profitability based upon Defense Metals history of losses; (xiii) risks related to environmental regulation and liability; (xiv) risks associated with failure to maintain community acceptance, agreements and permissions (generally referred
to as “social licence”), including local First Nations; (xv) risks relating to obtaining and maintaining all necessary government permits, approvals and authorizations relating to the continued exploration and development of Defense Metals projects; (xvi) risks related to the outcome of legal actions; (xvii) political and regulatory risks associated with mining and exploration; (xix) risks related to current global financial conditions; and (xx) other risks and uncertainties related to Defense Metals prospects, properties
and business strategy. These risks, as well as others, could cause actual results and events to vary significantly. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, continued availability of capital and financing and general economic, market or business conditions, the loss of key directors, employees, advisors or consultants, adverse weather conditions, increase in costs, equipment failures, government regulations and
policies, litigation, decrease in the price of REE, the impact of Covid-19 or other viruses and diseases on the Company’s ability to operate, failure of counterparties to perform their contractual obligations and fees charged by service providers. Investors are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements.
Sources:
· www.sedar.com
· www.defensemetals.com
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is not a registered investment adviser and does not purport to offer personalized investment related advice; the publisher does not determine the suitability of advice and recommendations contained herein for any reader. Each person must separately determine whether such advice and recommendations are suitable and whether they fit within such person’s goals and portfolio. The advertiser featured in this edition of Golden
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