To my mind the quarterly report contains both positive information regarding Tomingley, as well as not so positive delays for the DP project.
The positives are;
- Tomingley is back to making a profit, and cash reserves have increased.
- Tomingley drilling is still occurring to expand the resource with more drilling results to be released "Further drilling at depth to probe the extent of high grade shoots is also intended. This drilling will take place over the coming two quarters"
- LOI for zirconium "Negotiations for offtake contracts and product pre-certification continue. This applies particularly to zirconia, where the latest very high purity material from the DPP at ANSTO will ensure the Company competes in virtually all downstream market areas"
- Increased demand for DP offtakes, "Significant changes have occurred in the Chinese manufacturing sector during the first quarter of 2017, and it is expected that the period of low prices and oversupply are now over for rare earths and zirconium materials. Price increases of 5-7% have been recorded for both praseodymium and neodymium oxides and their alloys since the beginning of the year, two of the key rare earths required for NdFeB permanent magnets. Continued strong and growing demand for magnets in large volume markets such as renewable energy wind power, electric vehicles, and robotics is expected to continue or exceed the impressive growth rates over the past year. "
- "A combination of higher raw materials prices and a government led environmental clean-up of industry has resulted in prices for zirconium oxychloride (ZOC) increasing by over 12% since the end of last year. ZOC is the base chemical for most downstream zirconium products and prices finished the quarter at close to US$1,700/t, or US$5,000 to US$5,500 on a 100% zirconia basis"
- "A shortage of premium zircon with uranium and thorium below ~300 ppm, needed to produce fused zirconia less than 500 ppm U+ Th, is also expected to witness premium pricing over other grades. "
- "Hafnium market supply is also under pressure with Toshiba announcing the bankruptcy of the business unit housing Westinghouse Electric Corporation (WEC), which produces hafnium free zirconium metal for nuclear reactor fuel assemblies. Combined with ongoing losses by Areva in France, the leading European supplier, it is easy to appreciate that hafnium supply has and will be constrained as it is a by-product from making hafnium free zirconium metal."
- Follow up drilling is planned for the Bodangora project but no timeline given, "Extensive zones of alteration and gold-copper mineralisation were recorded in several holes confirming the potential of this 15 km long corridor to potentially host significant deposits. Follow up drilling has been scheduled."
- The appointent of ",...Mr Alister MacDonald was appointed as General Manager-Marketing for the Alkane Group. "
The negatives are;
- Delay in the LOI with VTRE been converted to a firm agreement, "Due diligence of Vietnam Rare Earth JSC (VTRE) continued. The LOI of April 2016 has been extended to October 2017 to allow satisfactory time to complete the Toll Treatment Agreement and Marketing Agreement, and to agree on potential investment in VTRE" It was due this month.
- Delay in the engineering study by Outetec to "Outotec to refine the existing engineering to provide bankable level costing for the processing section of the project using the modularised build philosophy (ASX announcement 28 October 2016). This comprehensive task should allow the Company to quickly commence the construction phase following financing. Results of the work with Outotec are now expected in Q1 FY18" It was due this month and then June.
I would be interested to hear anyone else's take on the quarterly. Overall, it is positive as the company is making both progress and a profit but it appears that the DP is not going to get funding in the current year.
(20min delay)