Fantastic article @ArgylePinkLynas Lacaze gives pivotal thumbs...

Fantastic article @ArgylePink

Lynas Lacaze gives pivotal thumbs up to ionic clay-hosted rare earths.

Here’s the paragraphs that says it all for me:

“We do look at alternative resources (to the fabulous hard-rock Mt Weld deposit). Certainly ionic clay deposits with their preference for heavies (heavy rare earths for permanent magnet batteries) is of interest,” she said.

So there you have it. The owner of the world’s best hard-rock mine is interested in ionic clay deposits – the very thing the Chinese mine domestically and import from Myanmar to underpin their dominance of the critical industry.

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Breaking down to what Lynas' CEO actually means by ‘heavies’. To me, there is only 2 key elements, they are (with March prices):

• Dysprosium (Dy) - US $225.9 per kg
• Terbium (Tb) - US $1339.60 per kg

Apart from Neodymium and Praseodymium (March prices fetching only US $75.80 per kg), everything else is of little value to a projects modelling economics due to either limited markets or oversupply risks as a by-product.

Interestingly, LYC only reported on Nd and Pr sales in their last Quarterly. They justified this by stating the following: ‘Current pricing for Heavy Rare Earths has softened and we have chosen to retain some SEG product in inventory for future sale.’See LYC quarterly page 4 - 3rd paragraph.

It is possible that LYC needs to sell the higher cost heavies (Dy and Tb) to justify their business model or they've didn't produce a good product mix during that Quarter as per previous. Either way, there is no shame in keeping your cards close to your chest. However, this does feed into my argument (the elephant in the room) that, Dysprosium and Terbium are the controlling costs structures for the entire REE sector because they are almost entirely sourced economically from iconic clays – presently China via Myanmar. Hence, why VML (another hard rock project) announced last week that it had halted construction on it's half-finished rare earth processing facility in Saskatoon. Richard Crookes, stating that ‘…no market for what the facility aimed to produce’. Post #: 67479664

China can control the full range of key products (Pr, Nd, Dy, Tb) which present over 90% of the entire supply value. Their strategy could be to flood the market with Pr and Nd (which are usually found together in hard rock projects) to keep prices low. Take a loss on them to de-incentivise the competition with the view to slowdown investment into the sector but ultimately make it up with the higher value Dy and Tb oxides once markets return to favourable conditions.

Whatever the case, the spoiler of this strategy is 'proven' ionic-clay projects outside of China and Mynama. The other spoiler is if they are located in a 'sovereign-trusted' country.

AR3 is blessed by the fact that it ticks both those boxes. And judging by Lynas's endorsement, including Robert Gottliebsen recent article in The Australian Post #: 67204945, there literally is no other 'advanced' ionic-clay project at present who can fill the looming supply gap 'securely'.

Exciting times ahead!

AIMO, DYOR, GLTA(patient)H