Dec 10, 2023
Richard Brescianini, is back with
Coffee with Samso Episode 191 and sharing with us the path forward
with Heavy Rare Earths Limited (ASX:
HRE).
I have always said that Richard
Brescianini, the Executive Director of Heavy Rare Minerals Limited,
is the best person when it comes to understanding how the Rare
Earth sector functions. Richard has had decades of experience
within the sector and in this Coffee with Samso, he shares with us
what is happening with HRE and what is the path forward in
2024.
The rare earth sector is
undergoing some reality checks and as investors look around, there
are only a real handful of companies left that can be considered as
real contenders. There is a rush to go to Brazil to chase the
so-called "ionic" projects but what everyone has to consider is
what will be the economics of the business.
In
this episode, Richard and I discuss what makes the business work.
The metal extraction is critical and we know the answer is acid.
The more acid we use, the more metals we get out. The cost of the
acid extraction is a big hurdle but don't forget all the other
aspects of the business.
Australian Clay Rare Earth
projects may appear to be lacking in properties that are beneficial
to having a good REE project, but they have lower jurisdiction
risks, and hence the cost of having a sustainable infrastructure
becomes challenging. Projects need to have consistency in all
aspects of the deposit, such as metallurgical factors and
grade.
We also discussed the other
projects such as Duke and Perinjori. There was some exploration
news on Duke and we had a good discussion on the merits of the
project.
Samso's
Conclusion
This Rare Earth sector requires
investors and companies to have a long-term view of
commercialisation. We all know that the challenge in working on
clay rare earth projects has been a long road and very challenging.
There have been many comments that the outcome for the companies
promoting these projects will end in tears. If you have been
following the markets you will be swayed with the depressed equity
market.
I must admit that I had similar
thoughts. My thoughts are whether the demand and the hype would be
sustained. I recently attended a Rare Earth Conference in Canberra
and I was surprised that I was super attentive over the 3 days. I
think I may have only missed one talk. What I took away from that
conference was a renewed enthusiasm for the
sector.
The main reason is that there
appears to have been a lot of money already spent. Furthermore,
there seems to be a lot more money that is in place to help create
a new downstream chain that is outside China. Before going to the
conference, I heard all the talk but one has to take all those
noise with some caution.
However, after the conference, I
am convinced that the talk is real and the demand for more REE is
believable. The establishment of the downstream process is in no
way near being completed but the process is there. The amount of
money that has been pledged to establish a non-China-aligned
downstream chain is staggering. The projected demand for REE for
our electrification journey appears to ensure the longevity of
companies such as HRE.
Hence, my opinion for those who
are interested in this sector should DYOR and look into what is
happening behind the noise you hear from the general stream of
news. Spend some time and look into what is happening in the real
REE world.
Chapters:
00:00 Start
00:20
Introduction
01:10 Cowalinya Exploration
Target
06:03 Could the geology create
issues for your Exploration Target at
Cowalinya?
09:05 All about the Duke
Project.
14:03 Do you think Duke could
have a different REE chemistry?
17:24 New Project -
Perenjori
22:32 Discussion about the
clay-hosted space
27:21 A second supply chain for
the rare earths market?
37:58 What are the immediate
goals for HRE to monetise the business?
44:17 What could disrupt the
planning?
47:21 What should investors be
looking out for?
52:05
Conclusion