Things that make me go Mmmmmm, page-13

Wow, that disjointed diatribe reads like chatGPT? Likewise, your threat to "Better not to respond to this reply my friend unless it is on topic!" is odd considering I'm the one pointing out factual discrepancies in HCk's SS assumptions and objecting to those substantiated opinions being diminished with outrageous accusations of working for others, sleight-of-hand trickery, running two accounts etc (aka Machiavellian). You may not like what I have to say, but I sincerely hope the HC mods respect my right to say it (he said nervously)...

I'm not upset in the slightest by robust debate... let the light in, sunshine is the best disinfectant for germs. Your main error is presuming history is relevant to the future with MP more so than conflating corporate mistakes with MP deposit quality. The seeds for Moly Corp's demise (owner of Mountain Pass deposit) were sewed when they spent $1.3B to buy Neo Materials at the top of the RE boom in 2012. That was corporate stupidity similar to HAS borrowing $150M to buy Neo Performance Metals in 2022 before NEO halved in value, all the while cum-raise, no cashflow and debt due in late 2025 (OK, so sometimes history rhymes).

Readers don't want the entire history from chatGPT here, a summary will do. Chinese exceptionalism in RE production and a desire to own the RE market drove prices down to loss making levels for both Moly Copr and Lynas by 2015 with no relief in sight. Moly Corp went under with large debts that were unsustainable, partly because they geared up to buy NEO in 2012, partly because MP wasn;t making cash at very low RE prices. Lynas got bailed out by the Japanese with essentially int free loans that have been continuously rolled forward despite also being loss making at the time. Fortunately, LYC didnt have large debts related to corporate M&A misadventures...

Fast forward to 2024 and Mountain Pass is closing in on rebuild of their cracking/leaching plant, building a new RE refinery plant (all subsidised by the US gov) and have plans to get into the RE-mag business (also with US gov help Im sure). Historical environmental breach's since the mines inception 70 years ago are irrelevant given they have permits and approvals today to operate in an acceptable manner. Fact that LYC was in merger talks recently with MP Materials (MP owner) is proof in the pudding that MP is one of the world's trophy deposits and RE companies ex-China... otherwise why would LYC be trying to tie up a merger with them???

IMHO, the RE market will be dominated by a handful of large companies with large deposits and the proven technical capability to actually run the complex and risky business of mine-to-RE-Oxide, if not also RE metal and Re magnets. It's not a very large market and for numerous reasons, but mostly geopolitical supply risk, the EV industry is moving away from reliance on RE-Perm_Mag motors. DyTb are the real bottlenecks, NdPr are likley to be over-produced in the chase for DyTb required for high-temperature uses that cannot be substituted. In a well supplied global RE market, even with government subsidies margin/profit will only accrue to those low on the cost curve... who wants to be an investor in a profitless zombie supplying critical minerals to industry for only a clap on the back for doing the west a favour?

Lynas is building out a Texas plant that will take an MREC like intermediate product from which U&Th has already been removed (eg Kalgoorlie cracking plant). You really don;t know what your talking about. ILU is cracking mineral sand monazite in WA... there is NO cheaper course of monazite than free bi-product mineral sands monazite. There is a lot of min sand monazite in the world being mined today and coming on line in the future, it used to be dumped right back in the pit but times are a changing right. The Brazilian ionic clay deposits are likely to be world class ex-China on cost and thus developed and sold into the west. Don;t carry on about Brazil sovereign risk like a pork chop, every country is sovereign risk these days with red tape, green tape, legal tape, resource rent taxes etc, Brazil will cliop the ticket of course but they won;t kill the goose...

This is an investment forum for cheap stocks not cheap shots I agree. The question readers want answered is what are the odds ARR gets cheaper of more valuable, and imo the answer to that question relies on the economics of the deposit. Like I said, investors will not be happy campers owning a loss making zombie that supplies US industry for free, so sorry but thank you very much. This is where I drill down into technical reports to see the sausage in the sizzle, reality from spin, risk vs upside. Investors are advised to consider perhaps management are motivated to gild the lily and buy time for a fairy to kiss them on the ass with technical breakthroughs that turn the BS into reality (that's the ASX junior playbook).

For example, acid bake/cracking is typically conducted in a rotary kiln at the same 600deg C as ARR needs to roast their con to drop out the Ce. Concentrated H2SO4 acid is added to the monazite con in the kiln and off-take gases captured and scrubbed, then the end product is simply washed with water for >90% REO recoveries. Concentrated acid is say 1.5t H2SO4 per tonne of water (~17 Mol) and the acid to con ratio in the kiln is ~2 or 2.5:1 max. Thus, 1.5t H2SO4 + 1t water = 2.5T per 1t con feed to kiln (2.5:1 ratio). At 60% TREO in the mon con kiln feed, there is 15x the REO per tonne of mon con vs ARR HCk con feed at 4% TREO. so, 15x less mon con tonnes required in acid bake than ARR 90deg vat leach feed for same REO product to leach tanks. Divided 1.5t by 15 = 100kg/t of H2SO4 per tonne of 60% TREO mon con for acid bake to produce the same quantity of REO in leach as 250kg/t H2SO4 produces for ARR. Yes rotary kiln acid bake is trickier and takes more care, but it should actually be cheaper than ARR leaching on acid and reagent cost on account of 15x less tonnes feed, 15x less leach liquor to process downstream, smaller plant, lower capex etc.

To technical sorry, my point being there are good parts to the ARR story and some concerning ones, including very high acid consumption on a shed load of tonnage leach feed. ARR says it's 'so much cheaper than acid bake leach', but is it really? Below is the ILU met flowsheet with the cracking pre water leach in one raotary kiln step... the rest is pretty much identical to the sort of processes ARR require to produce separated RE-Oxides. It's actually one simple step, so long as they get it technically right, and to be fair it is operationally tricky to run well.


Below is ARR's flowsheet, which includes an almost identical rotary kiln roaster to calcine the con feed pre-leach (except no acid addition, so ob's cheaper and simpler). Still I'm sure you see my point even if you can;t admit it... there isn't much difference between the two except ARR will have to process 15x as much tonnes of concentrate at 4% as the monazite guys. And thus part of my concerns that the costs just don't seem to stack up even if they solve all the technical problems the SS assumes will be resolved.