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Driven by robust demand for their green energy and military applications, rare earth element (REE) plays have the market’s attention.
One key player that it has so far overlooked, though, is
Defense Metals (DEFN.V; DFMTF.OTC) — a company with a deposit rich in the most critical REEs.
As you’re about to see, Defense currently trades at bargain levels…but that seems destined to change in the near future.
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The interesting thing about rare earth elements (REEs) is they aren’t actually all that rare.
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The fact is there’s plenty of REE mineralization scattered across the earth’s crust.
The problem is REE concentrations large enough to economically extract are rare — exceedingly rare.
That rarity explains why REE deposits are so valuable.
Many, many modern applications require them, which puts accessible, mineable REE orebodies at a premium.
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That is what makes Defense Metals (DEFN.V; DFMTF.OTC) and its Wicheeda REE deposit in central British Columbia so attractive1.
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Here’s a project with potentially economic grades of some of the most in-demand REEs…located in an area with a long mining history…and blessed with great infrastructure.
And here’s the important point: Given the global scramble to secure consistent REE supplies, Defense Metals’ overlooked story isn’t likely to stay overlooked for much longer.
Defense Metals is the REE play you’ll want to explore now, before the rest of the world discovers what’s happening.
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A Compelling REE Resource
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To have skin in the REE game, you have to have a quality resource, and Defense Metals’ Wicheeda deposit checks that box quite easily.
As of the most recent estimate in 2020, Wicheeda hosts an indicated resource of 4.89 million tonnes of 3.02% light rare-earth oxides (LREO) and an inferred resource of 12.1 million tonnes of 2.90% LREO.
As the table below demonstrates, Wicheeda’s bench-scale flotation mineral concentrate grades compare favorably to world class mines like Mountain Pass, Mt Weld and Bayan Obo.
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| 1 See Defense Metals News Release Dated October 23, 2019
2 Verbaan, N., Bradley, K., Brown, N., and Mackie, S., 2015 A review of hydrometallurgical flowsheets considered in current REE projects. In: Simandl G.J. and Neetz, M. (Eds.). Symposium on Strategic and Critical Materials Proceedings. November 13-14, 2015, Victoria, British Columbia Ministry of Energy and Mines, British Columbia Geological Survey Paper 2015-3, pp. 147-162
3 These are commercial operations and the results of Defense Metals’ current results are from controlled lab testing and are not comparable |
In addition to similar mineral concentrate grades, Wicheeda bench scale flotation testing also yielded 85.7% LREO recoveries.
Simply put, this is a fantastic REE resource — one made better by positive metallurgical test results.
And unlike many REE deposits, Wicheeda isn’t located in some far-flung location, but in a very accessible, mining friendly area of British Columbia.
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Rich In The Right Rare Earths
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The true benefit of that location becomes clear when you consider how desperate the world is to find reliable REE sources.
Key commercial applications for REEs include medical imaging, battery production and coatings for cameras and night-vision lenses. Key military applications include high-performance guidance control systems, electronic jamming devices, high-powered laser targeting, and fighter jet engine manufacture.
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And then there’s the uber-high-growth sector that is the electric vehicle market.
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EVs are considered a crucial component in the global effort to combat climate change — and their growing popularity is putting a premium on the REEs that help power their magnet-based motors.
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These motors are in every Tesla that comes off the manufacturing floor, and the key REE inputs for them are neodymium and praseodymium.
Why does that matter to Defense Metals and its investors?
Only this — out of all the key REEs, the rare metals of highest economic interest at Wicheeda are neodymium and praseodymium.
In other words, just as market demand for these key REEs is exploding, Defense Metals boasts a deposit tailor-made to meet that demand.
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Offtake Partners Are Coming Calling
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Need proof that Wicheeda’s resource is marketable?
Well consider that in just the last month, Defense Metals has had requests to ship concentrate samples to four of the world’s biggest REE processors.
Defense’s goal is to use these samples as the starting point for negotiations on a possible offtake agreement that can help finance Wicheeda towards a potential production decision.
That these processors are making overtures at Wicheeda’s stage of development speaks volumes for how in-demand new REE supplies are in the global economy.
The myriad crucial commercial and military applications that REEs support make them necessary, almost regardless of cost.
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With offtake partners beginning to express interest and management steadily moving Wicheeda along the development curve, now is a great time to begin taking a closer look at Defense Metals.
Considering that the company’ s current market cap hovers around C$20 million, it’s easy to see why DEFN makes such a compelling lever on the world’s scramble to secure stable supplies of REEs.
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Bottom line: very few exploration-stage REE companies are this far advanced.
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The trends driving REE demand are irrefutable and irresistible — as is the investment argument for Defense Metals at or near current levels.
| | | | [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).
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, 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
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