The Esperance region is fast developing into a rare earth region and Episode 69 is with Guy Le Page, non-executive director of Mount Ridley Mines Ltd (ASX:MRD).
The Mount Ridley Story is all about clay hosted rare earth elements (REE) deposits. The biggest question for all the clay REE projects relates to the timing of the unlocking of the metallurgical conundrum. It is not a big secret that there is a hurdle for these companies but whether it is a matter of time or market, that will be food for thought for investors.
The Mount Ridley Story
The clay hosted REE deposits that Mount Ridley has are located within a Fraser Range sub-basin, which is just 50km north of Esperance. Interestingly, it was initially acquired for its nickel and copper sulphides potential.
Figure 1: The Mount Ridley REE Project comprises 9 granted exploration licences in south-west Western Australia with an area of approximately 3,400 square kilometers. (Source: MRD Announcement, 14th February 2023).
Mount Ridley is one of many companies that is applying their trade in the Esperance region. Hence, the MRD story is with good company.
Figure 2: The Mount Ridley REE Project is well positioned with similar projects which have been proven to be mineralised and have known resources. (Source: MRD Presentation, December 2022).
The Company also holds approximately 18% of the Weld Ranges in the mid-west of Western Australia. Areas of the tenements are prospective iron and gold.
Rooster Talk Episode 69
Chapters
00:00 Start
00:20 Introduction
00:52 Update on the Mount Ridley Story.
02:05 Mount Ridley Tenement Holdings.
02:42 Any update on the REE sector?
03:25 Is the recent Molybdenum price surge a sign of things to come for commodities?
04:13 Are we looking at a change in sensitivities with supply crunch and price volatility?
05:06 Apparent pricing volatility.
06:11 Upcoming news for Mount Ridley.
07:17 Why buy Mount Ridley?
08:41 Conclusion
PODCAST
The Sensitivity of Supply Deficit and Price Volatility.
In this episode of Rooster Talk, one of the topics that was discussed was the current observation about the supply crunch. This is an interesting topic as the supply crunch of metals have been talked about for nearly 8 years. I remember writing about this topic in 2019 (see below) and the crunch sort of never came.
Samso Insights:
- Zinc Market- What happened to the price surge? - January 19, 2019
- Is the Commodity Market just getting used to a slowing Chinese Panda? - June 10, 2019
- Is the Commodities Shortage a Mirage? - June 18, 2019
- Shortages in Metals - March 14, 2020
- The Mystical Journey of the Commodity Price - Will it Continue? - June 18, 2021
One of the most compelling crunch that never eventuated and still has not, has been the Zinc story. Nickel and Copper kind of came of late but that is still a wait-and-see game. The point is that in the previous narratives, the hype never came to pass.
The last six months have shown that this may finally be happening... or is it? There was the nickel push and then there was the copper run recently. Uranium may be starting to lead, or may lead showing some signs of leading the pack. As Guy Le Page mentions in today's Rooster Talk, the surge in buying by the Sprott Uranium Fund may have created a catalyst for commentators to feed on.
Why are we talking about this topic? Well, the price of Molybdenum ran spectacularly in January 2023 and observers commented that this is due to China restarting production and the closure of mines in Peru.
Figure 3: The price chart of Molybdenum (Source: Trading Economics, 2023).
Hence, if this is the case, a nearly 95% jump in price would make any punter wake up. A surge like that because of a mine closure and of increasing production in China? On the REE front, according to Strategic Metals (TSX-V:SMD) Invest (www.strategicmetalsinvest.com), since January 2020, Dysprosium has increased by up to 78.25%, Neodymium 226% and Praseodymium 169.20%
Samso's Conclusion
The clay hosted REE journey is one that is intriguing and poses a lot of questions for potential investors. When will the unlocking of the Holy Grail happen? Will there be a market when that happens? Will the technology using these metals still be around?
Well, in my humble opinion, having lived many decades in the wonderful world of ours, I think this is our time in seeing a pivoting of industries. The world of electrification is here to stay and the world of efficiency in creating cleaner energy has been set in stone.
Although rare earths are not rare, the concentration of the resources and the application to downstream products are rare. The shift of dependence on one "nation" to produce products seems to be taking a back seat. The Esperance region is ideal for a new industry to emerge. It has all the important logistics like a port and a low density of population. It has the space to grow in size.
The good thing for companies like MRD is that the resource is almost a certainty. They have many players who, as a whole, will be able to play with the big boys. The unlocking of the metallurgical question will be exciting times for all involved. What investors need is to be patient, but this seems to be the biggest Achilles heel.
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
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 [1] 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 have 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.
[1] (DMIRS) Department of Mines, Industry Regulation and Safety 1:100,000 Interpreted Bedrock Geology.
Please let Samso know your thoughts and send any comments to info@Samso.com.au. Remember to Subscribe to the YouTube Channel, Samso Media and the mail list to stay informed and make comments where appropriate. Other than that, also feel free to provide a Review on Google.
For further information about Coffee with Samso and Rooster Talks visit: www.samso.com.au
About Samso
Samso is a renowned resource among the investment community for keen market analysis and insights into the companies and business trends that matter.
Investors seek out Samso for knowledgeable evaluations of current industry developments across a variety of business sectors and considered forecasts of future performances.
With a compelling format of relaxed online video interviews, Samso provides clear answers to questions they may not have the opportunity to ask and lays out the big picture to help them complete their investment research.
And in doing so, Samso also enables companies featured in interviews to build valuable engagement with their investment communities and customers.
Headed by industry veteran Noel Ong and based in Perth, Western Australia, Samso’s Coffee with Samso and Rooster Talk interviews both feature friendly conversations with business figures that give insights into Australian Stock Exchange (ASX) companies, related concepts and industry trends.
Noel Ong is a geologist with nearly 30 years of industry experience and a strong background in capital markets, corporate finance and the mineral resource sector. He was founder and managing director of ASX-listed company Siburan Resources Limited from 2009-2017 and has also been involved in several other ASX listings, providing advice, procuring projects and helping to raise capital.
He brings all this experience and expertise to the Samso interviews, where his engaging conversation style creates a relaxed dialogue, revealing insights that can pique investor interest.
Noel Ong travels across Australia to record the interviews, only requiring a coffee shop environment where they can be set up. The interviews are posted on Samso’s website and podcasts, YouTube and other relevant online environments where they can be shared among investment communities.
Samso also has a track record of developing successful business concepts in the Australasia region and provides bespoke research and counsel to businesses seeking to raise capital and procuring projects for ASX listings.
Disclaimer
The information contained in this article is the writer’s personal opinion and is provided for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. Read full disclaimer.