Be naive to make those assertions, just stick to discussing the stock.
"Ion adsorption deposits occur in temperate and tropical weathering climates. The key ingredients are most-often an underlying granite, although deposits also form on alkaline rocks (Estrade et al., 2019), and the existence, prior to weathering, of soluble REE-bearing minerals in the granite, such as REE fluorcarbonates, eudialyte and allanite."
Also, in relation to basket value. Which again i'll educate.
There's typically 3 figures that get thrown around and to ensure we're talking about the same ones i'll talk through them for the benefit of the forum.
1) Head grade Basket value. Or commonly referred to just as basket Value.
This is just an arbitrary method companies use to try an ascertain how "valuable" their basket is it. The computation is dividing all the elements up and treating them as a percentage of the total TREO value. Each elements percentage is then multiplied by the 100% value for each individual oxide. If this is the figure you or other are referring to; i agree that it does not practically relate back to real revenues. As there is no account for the change in the recoveries and it is also isolated from the grade to which the REO exist.
2) In ground value. Typically referred to as in-situ value. This is not too dissimilar to the above, but the difference here is the figures uses the actual PPM values and multiplies them by the 100% value for the element. usually presented per tonne or per kg. Again, this is metric that hard rock projects often use because the higher TREO values. By default if you have 1% TREO = 10,000 you will have more rare earth in that tonne of dirt compared to a project at 0.1% TREO = 1,000ppm. Identical baskets with different grades would have a linear relationship between their in ground values. aka 10 times more grade, 10 times higher in ground value. This is generally where conversations break down in the ionic clay vs hard rock. Why because despite the in ground value being much lower for ionic clays they are cheaper to process. Hence why 250-300ppm can be an acceptable cut-off grade for ionic clays whereas hard rock projects typically are above 1%.
3) Concentrate basket. This is the actual value/revenue one could expect to receive for their processed product. To derive this accurately you need to have the recoveries for each element and you need to know to what level concentration the product will be produced to. Ionic clays target 90% TREO content whilst hard-rocks target 35-45% (unless they refine/separation). This works on a similar principle to item 2 but now assess the quantity of each REO element in the product.
Whilst some continue to undermine the method as fictitious and misleading - either through naivety or some other agenda led tirade, i have proven is validity many times over the previous 2-3 year. in Post #:64940647 there is evidence to support it, one can fairly accurately deduce how much their product would be worth for sale on a per/kg basis. I have been able to accurate reflect companies revenues based on this methodology - which is used in industry and as validated by others. I place a caveat on this always - by acknowledging that revenue (whilst good to know) is not the entire side of the equation and that the all in sustaining cost is required to fill the gap and tell you just how profitable the project might be.
By way of explanation these are the infamous tables which fairly accurately allow one to analyse REO stocks pretty quickly.
(2) is the in-situ value.
(3) is the concentrate value.
blue columns denote un-processed (head grade) orange is post processed items.
So this can help one to understand what drives the different revenues. AR3 and ABX have very similar TREO 720ppm compared to 790ppm. But ABX in ground value is much higher. Why? well it has a better % of the valuable elements and recovers them better. Dy,Tb, Tm, even some of the Lu/Y etc.
Note the Ca/La content. These are typically worthless elements and so common across many of the true ionic clay projects is that they have a large percentage of HREO compared to hard rock projects.
Where does MEI sit? Well we only had table 2 from the announcement to go off from a composition and TREO perspective. And as mentioned the grades are very good (for clay) and so the in ground value is high. It means every tonne of the MEI dirt has double the AR3 value and almost double the ABX. What's driving this is the TREO grade, not the composition. We can tell this because it's 4 times higher in grade, you would expect in ground value would be 4 times more. So again we can see why this is the case noting that a large portion of the TREO is in La/Ce which are the low value elements. And so despite AR3 or ABX being 3-4 times lower in grade, they actually have some high value elements at similar or higher ppm. Tb and Dy specifically for ABX.
We don't know how MEI will recover. So the orange columns are just for illustration purposes only.
I have just placed 60% across all the elements as a demonstration. Note* when you get the recovery information back having low La and Ce recoveries is favourable - it means you don't dilute your final concentrate basket with low value elements.
For again illustration purposes this is what occurs when i use the AR3 recoveries. The value of revenue per/kg goes up because the Ce is not recovered and thus the composition now has a larger percentage of better value elements.
I will at this point indicate that recoveries of course also impact how many tonnes you get out the back end verse how many you throw in the front. Because MEI has a very high head grade, they could afford and be able to get away with lower recoveries. Essentially, at 4 times the grade you could have half the recoveries AR3 does, and you would still get double the amount of tonnes of TREO out the back end. You revenue on a p/kg concentrate produced remains the same. You just simply are producing less of them.
Again to demonstrate, i have halved the recoveries. The concentrate revenue is the same. Why? Because the composition of that concentrate is the same. What has changed is that say instead of producing 4000tpa if you halved the recoveries you would produce 2000tpa. So again, you can take those calculations further if you knew what the front end design was etc.
Anyways, the key part here is the ionic leach results (if that's what the preliminary met work is that's due for release will indicate). If the deposit has little ionic material and/or a very large part isn't colloidal and therefore liberated under a mild acid dosing arrangement then it's unlikely to be viable. (ITM an example of a project that had/has ionic material present but not enough, and then the acid dosing didn't lift the recoveries with it) - the company opted to concentrate on graphite and figure this out in the background - but that's an example of what can happen.
If a decent portion is ionic, and/or a large part leaches under leach conditions which aren't stupidly acidic and ideally using cost effective acid choices without a large acid consumption rate then this project will be very economic, and I would happily be a long term investor. (at the right price).
For context there are around 20-22 stocks with rare earths in clay. none of them are viable unless ionic and even some that are ionic still aren't viable IMO (itm, abx, ar3, (too small, too deep or too much acid). MEI has excellent grades and strip ratio seems quite good across the drill hits. It's composition of basket is very LREO biased, especially compared to other proven ionic clay projects. But what it sacrifices there, it would make up for it on the head grade perspective.
The missing link in between is the metallurgical extraction rates which hopefully holders and outside observers alike don't have to wait very long for.
P.S for you china, it would be great to leave the previous 3 years of personal vendetta, outside of these threads and cease with the inaccurate, low level snipes as to my investing ethics and credibility of opinions.
I don't have anyone blocked on HC because people are entitled to comment. Though my willingness to comment constructively moving forward will be a reflection of the respect lent.
SF2TH
MEI Price at posting:
4.5¢ Sentiment: None Disclosure: Not Held
(20min delay)