Hi everyone, I have been absent for a while but have had an interest in rare earths for a while and hence IXR.
I apologise if I am regurgitating some material here, but I am not across all the threads yet.
Finally bought in this week...feels like I just ran into a burning building while everyone is running out!
I know things look bleak, however I think IXR is stuck in this orphan period, where the original euphoria of the strategy has died down, and the market wants to see binding deals and dollars come in the door.
The problem is, the market has been waiting so long, they have lost faith.
It happens....
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Insinuated promises have been made...the dangling of the carrot for future funding, offtakes and JV's the constant attraction for investors to hang in there and hope that news flow will come, and that news flow, will be solid....yet it doesn't come....or if it does is shrouded in fluff with little substance.
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I believe there is a robust amount of work going on behind the scenes and I feel they have latched onto the UK government like a pit bull and will not let go.
So I am expecting a lot more on this front.
This behind the scenes work bears little fruit until disclosed...and I believe that is where we are now... in a kind of limbo period.
In a few interviews, I have seen the frustration on Tim's face and have heard the frustration in his voice and have no doubt the wheels are turning, just not as fast as he or the market would like.
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The macro is not helping either, with little liquidity earmarked by institutions for the small to mid cap riskier equities.
They are currently more inclined to preserve capital and earn 5-6% risk free.
I have been told by a couple of fund managers that when interest rates are cut, and they can no longer earn these yields safely , they then chase alpha and pivot a portion of their funds back into riskier assets.
Canada have just cut with the ECB widely tipped to be next, and of course the US will follow.
Then it's hopefully a race to slash rates, which will see a substantial increase in liquidity for the smaller caps.
As for Australia, figures announced recently state this has been the lowest growing quarter since COVID, a pathetic 0.1%
Next will be contraction, and hopefully staving off recession by the slashing of rates.
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However, there is a geopolitical event favourably affecting ex China rare earths, and that is the Chinese tensions with the US over Taiwan.
I have seen a lot more chatter recently about rare earths, as well as graphite and of course semiconductors, which is what all this fuss is really about anyway.
This, more than any other geo political conflict at the moment, may force the world to accelerate decoupling from China.
Particularly in the areas that China is supremely dominant-semiconductors, graphite and rare earths amongst others.
These are certainly on the DOD's radar and their strategic military applications.
Particularly when China continues to tighten its grip on these commodities and IP and in effect weaponizing them.
China announced a ban of rare earth extraction and separation technologies on December 21, 2023.
This has significant implications for U.S./EU national, economic, and rare earth security.
Um..... Lucky we have our own IP.....
As for IXR, although our resource is in Africa, and its basket is not of the highest concentrations, it's big, advanced and has great levels of heavies, which China of course lacks. Heavies is where its at if you want to decouple.
Uganda itself, is mid tier in terms of doing business in Africa.
Not the best but certainly not the worst and could be way worse.
It could be as bad as the DRC.....but it's not.
There is however strong local support, as the mining legislation has recently been ratified.
But, it is Africa, and will attract the usual government and ministerial 'patronage', that the dark continent understands as just the way they do business....and the Chinese are well versed at that...
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So, I get the feeling Makuutu is taking a back seat.
Maybe that's too strong a phrase.
Not a back seat but less impetus by the company.
Some of you noticed the lack of comms about it in the last webinar.
There's not enough in the coffers to march full steam ahead into all their projects...so recycling will take point...
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The money maker, the magnet for ESG friendly national/EU funding and support, (excuse the pun) will be attracted by Ionic Tech and the patented technology it has developed to recycle magnets...spent, end of life or active.
The process can reduce them to oxides for sale to LCM, or any other magnet material manufacturers, of which the western world has very few.
So I guess its fortunate that we are involved with them, no matter what your personal opinion of them is.
Cheap, modular and easily scalable....and we own the IP.
This gives you the ability to set up in an industrial park in most western jurisdictions very easily...a lot easier than developing a mine to production.
This then is perfect for ESG friendly jurisdictions like the US, Canada, and Europe.
It allows for what would be waste and landfill, to become the exact critical elements, so desperately needed, by a secure, domestic supply. It just works on multiple levels.
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Speaking of levels, not much is said about Northern Ireland's status in the EU.
Northern Ireland and the rest of the UK left the EU on 31 January 2020.
However, under the terms of the EU-UK agreements, special arrangements apply in Northern Ireland.
Under the Windsor Framework, Northern Ireland remains aligned with EU single market rules for goods and therefore maintains access to this market.
Yep, next level....
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In my view, This is the path forward for the company, and it looks as though they are seeing it too.
I think the way the new Chairman put it was short circuiting the Chinese rare earth supply chain, which is exactly what this can do.
Essentially the, feedstock for Ionic Tech will come from the scrap market- wind turbines, MRI's, EV motors, old generators ...any source of permanent magnets. Consider this the material that would normally come from a mine. A mine whose land has to found, pegged, explored, permitted, JORC'd, study afters study, PFS, DFS, BFS, FID, FEED, designed, financed, built with processing on site....just like at Makuutu.
Big time and Big money...
Yep, time for a short circuit...
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And as the EU has recently legislated as part of the CRMA that this magnetic feedstock from the sources previously mentioned CANNOT leave the EU, it then secures our supply.
Already on the UK governments radar, in a country with massive onshore and offshore wind generation, as well as Germany, Scandinavia and the rest of the EU, we really do have somewhat of a first mover advantage in recycling most rare earths as required by the market.
Some have mentioned Heraues, but I ask you, how many rare earths does their process manufacture?
Well.....just NdFeB magnets oxides, as far as I can tell, and please correct me if I have this wrong.
These will make the bulk of sales world wide and do huge volumes, however, please remember, China has the stranglehold on light rare earths.
They have supply, they have processing, they have refining and manufacturing.
So far, Belfast can produce NdPr, Sc, SmCo, and heavy's- Tb, Dy and Ho...a little more than one trick pony Heraues.
Granted, They are more advanced in timeline and do have the tonnage on us, but with some hard work and funding, we'll get there.
Not that it matters, the market in Europe and North America will be huge, as they move away from Chinese supply and will be supportive and pay a premium for domestic supply.
Heraues, IXR et al...build them all...the world is going to need it.
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Strategic project designation....
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And because the EU wants to recycle 25% of this material by 2030, you need to getting these projects up and progressing NOW.
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Then there's Brazil with VMM, which I can see growing, but way off in the future, as they are still proving up the Colossus resource...which will be Colossal. A foothold in South America with a monster resource...not bad...
So a few fingers in a few pies and lots going on.
But nailing down Ionic Tech, and scaling to commercial size in Europe and North America, IMHO will be the company maker.
Cheers everyone...
