@RabbitTrap When you speak I always listen, and I thank you for your wonderful contributions.
As horrid as I have been with a well educated assumption that there has been a lack of disclosure from the Company over the past 10 months, the fact that Ian Chalmers is back brings me comfort.
The CR at $1.73 has rattled me and now I focusing my attention on the patterns of selling since the day of the release of the optimisation study.
'Western Australian critical minerals analyst Kingsley Jones argues that China is no longer pursuing a monopoly of rare-earth supply. Its strategy, he says, is one of ‘monopsony’, as the sole buyer of rare earths. China’s share of raw material supply has dropped from 85% to 60% as demand has outstripped the capacity of its own mines, some of which have been shut for environmental reasons'.It may be that China is focused largely on consumption and is not longer punishing end-users looking to diversify, instead in the current climate it suits their internal needs.
Also this statement hit home to me -
The economics of the Dubbo Toongi project is improved once the Zirconium and Hafnium metals component is monetized. This can be done through the Zirontech metal refining process that ASM acquired in South Korea.How I interpret the above statement is that our profit may not be realised from the rare earths, zirconium and hafnium oxides produced from Dubbo, which by the way if you look at the modified flow sheet we can not really produce either-or, on their lonesome.
Further to this Flow sheet, it is clear know that the South Koreans were integral in the design changes to create a suitable feedstock from Dubbo to suit their own operations in South Korea. ----So why Mid 2023 for the EPCM commencement-----
From Section 3.4.1 Page 36 of Dubbo Project Modification 1 Report State Significant Development 5251
'In order to provide suitable feed stock for the Applicant’s South Korean operations, as well as other customers, a range of modifications to the approved processing operations are required. The Applicant has recently completed an Optimisation Study and the following subsections present an overview of the principal components of the approved processing operations that would be modified.1 Figures 12 and 13 present the approved and proposed process flow sheets'.
Remember the September Quarterly and this piece of information:
This quarter, in partnership with ANSTO, ASM: o Finalised work relating to the Roast-CDD-Zr Precipitation pilot plant and the DHZ pilot plant operation; o Planned the Tb/Dy solvent extraction pilot plant program; and o Progressed the metallurgical simulation modelling for finalisation of the mass and energy balance before commencement of FEED.
ASM also collaborated with ANSTO to produce sample analysis for products representative of the current flowsheet. These were to support marketing engagement with interested product off-take customers.
The samples produced included: o Zirconium Basic Sulphate (ZBS); o Zirconia (ZrO2), produced from ZBS; o Dehafniated Zirconia (DHZ), produced from Dehafniated Zirconium Hydroxide; and o Hafnia (HfO2), produced from Hafnium Oxychloride.
The samples were assayed by a third party (Bureau Veritas) to provide independent analysis. A larger sample production program to provide actual samples to customers will commence in January 2023.
This may go some way to explaining the situation facing ASM which is precisely what Ian is telling us and that is - that the economics of Dubbo will only stand in conjunction with metalisation happening at the KMP. Monetisation at that point will support both Dubbo and Korea. So there is no one without the other or any talk of splitting the two cannot happen as it would make no financial sense with the pressure of competition for raw ingredients to be feed through the KMP.
To further justify the dependence of the KMP to the success of Dubbo is an extract from the Modification Report
In order to maximise the efficiency of the Applicant’s integrated supply chain, including its South Korean operations, a range of product refinement and value adding steps in addition to those approved are required. These include the following.
• Zirconium Basic Sulphate would be either: – calcined (roasted in the presence of oxygen) to produce Zirconia (ZrO2); or – passed to a dehafniated zirconia (DHZ) and hafnium (Hf) circuit using solvent extraction to produce products that are also calcine to produce dehafniated zirconia (DHZ) and Hafnia (HfO2).
• Niobium pentoxide (Nb2O5) produced by the approved Niobium circuit would be passed to an arc furnace with iron to produce ferroniobium metal.
• A proportion of the Rare Earth Element solutions produced by the approved solvent extraction circuit would be passed to individual rare earth element Precipitation and Calcination Circuits where a range of high purity rare earth element oxides would be produced.Now the above statement in the Modification report tends to support the work currently being done by Ian at ANSTO.
Section 12.5 from the Dubbo Project Optimisation Delivers Strong Financials markets the success of Dubbo with KMP in the production of NdFeB, the premium zirconia products, ferroniobium and hafnium products.Our flow sheet at Dubbo appears to me to be complex. The steps required to get a final oxide for Nd/Pr >99%, does not appear to be standalone either so that we can produce and feed he KMP, we are locked in to the production of Zirconia, De-hafniated Zirconia and Hafnia. Now can you see what we are doing at ANSTO is necessary, the sample analysis work against the new flow sheet of the above products is because we need to produce eventual samples for end-users to attract finance. In other words we may need the KMP in South Korea or others around the world operating at a nameplate producing various strip alloys and metals to realise robust profits. Dubbo alone with discounting selling separated oxides together with potential higher then expected operational costs (not to mention energy, transport, feedstock and repayments on CAPEX over at least quite easily 15 years makes it a tough sell.
Look at the complexity of producing Nd/Pr - Recoveries at Dubbo is from the Zr SX secondary extraction raffinate, where the solution carries impurities such as iron, aluminium and zinc, how deep into the mineralisation these impurities exist is hard to tell but they need to be precipitated out. Further steps for HREs include formation of HRE carbonate precipitates, which are leached in sulphuric acid and filtered, Filter cake then goes to the double sulphate precipitation area. The use of sodium chloride , heat by steam, thickeners, and sodium sulphate produce a combined rare earth element double sulphate. You then have caustic solution, and hydrochloric acid filtered to produce the REE chloride product. It is the REE chloride product that allows each rare earth to be separated to each individual rare earth product. However REE Chloride solutions, now these are low value and the chloride must be removed with the use of solvent extractions. NdPr for example is precipitated from the solution using oxalic acid. The precipitates are filtered and calcined to produce the saleable Nd/Pr.
IMO-
Hyundai were involved in the redesign of our flow sheet - fact, so hey should be knocking down our door to get the EPCD on the move.
Were they given sample analysis results from ANSTO originally in order to improve the flow sheet, remember the South Koreans at this stage were pushing hard and doing everything to stay in our good books.
Sometime after that they most likely undertook their own pre-feasibility work and sample analysis from original soil samples and although the mod flow sheet appears to work (or the mod would have been withdrawn by now) they can see significant time delay in getting Dubbo into production, if at all, due to the significant costs in construction and reliance on a what now appears to be a single metal plant based in South Korea.
The complex mineralogy and chemical composition at Dubbo would appear to have a higher operational expenditure than what is realised in the Optimisation study and this is nothing that can be easily interpreted from Adamas or Argus etc...So no real blame there.
If Hyundai back out, we have a mod DA that may be too complex for most. So where too from there?
Why give them the opportunity to back out by stating mid 2023 for potential EPCD commencement. We should be starting now, offtakes or no offtakes. It is only with this work can we really understand the complexity of what we are dealing with at Dubbo.
The design of the flow sheet will need to see RE Products, Zirconia, Dehafniated Zirconia and Hafnium Oxide produced together (separate products of course) but together in the process flowsheet as there are significant cost benefits in producing them together and 2. its the value add of all of these products combined that will monetise both Dubbo and South Korea. i.e. the money made from the sale of these products will pay all the bills for both Dubbo and KMP as well as some profit left over (well hopefully).
So we need long term offtakes for metal production at the KMP, regardless of 3rd Party feedstock.
We need new feedstock right now at KMP to keep the lights on.
We 100% require the full support of the South Korean Government. Without their support, and worse still assuming they obstruct our efforts to secure contracts and feedstock as we now may be in direct competition with KOMIR well that is not a good prospect.
Remember the 1997 movie 'Contact' with Matthew McConaughey and Jodie Foster. Well long story short they built this large array in the US, based on alien plans and technology found. Anyways a few days before Jodie Foster was meant to go into the centre of the array, someone blew the thing up. Poof (this word poof is a reference to a puff of smoke and not homosexuality), gone, billions of dollars and no way to rebuild. Now I am not saying that our KMP will blow up but it could still go Poof by way of we can't afford to keep the lights on or pay the wages of our talented people over there.
But, little did anyone know that the main investor, who was dying of cancer, envisaged the complexities of a catastrophic failure at the array in the US, and if so he would never find out if aliens existed before he died. So this bloke got together some money and built an identical array in Japan. Yes, the mission was a success, The mission whirls up and Jodie falls unconscious as she begins traveling back through a wormhole. She awakens to find herself on the floor of the pod, the mission control team repeatedly hailing her. She learns that, from outside the machine, it appears that the pod merely dropped through the machine's rings and landed in a safety net a few seconds. However, later on in a senate enquiry it was revealed that a recording device worn by Jodie only recorded static, yet it recorded 18 hours of it.
Do we have the ability to build another Metals Plant? It would need to be in Australia and my guess is Western Australia unless there is a State Government prepared to put up grant money and fast track the approvals to under 6 months.
But can we build it, do we know enough about the IP to construct and then commission? Its important, as long as ASM own the IP there is an advantage. We need as many of our technical team over there as possible. Even if we can get two of the full time ANSTO staff over to South Korea for 12 months under a secondment to fully understand any potential issues and help with commissioning. They would need to be across the RE metalisation, Zirconia production, Dehafniated Zirconia and Hafnium. Not to mention Titanium as well as NdFeB alloy.
But if true and it sounds that way that Dubbo combined with a Metal Plant is critical to value add and monetise both Dubbo and the Metal Plant and if true that there was any possibility that the Korean Government at least at the KOMIR level lost face with his superiors in backing the speedy construction of the KMP based on information not quite accurate at the time then either we need to work professionally with the South Korean Government to sort that out or begin construction here is Australia - whilst keeping the KMP grinding along so that we have people to bring home that can replicate the South Korean plant with their eyes closed.
ASM Price at posting:
$1.84 Sentiment: Buy Disclosure: Held
(20min delay)
