Medallion sources rare earth minerals available as a byproduct of current heavy mineral sands operations or existing stockpiles
The magnet metals marketplace is fast-growing and critical to electric vehicle battery production
Major industrial companies are looking for alternatives to Chinese sources of magnet metals
The company’s management team has drastically de-risked its business model and offers significant upside
Who is Medallion Resources?
Unlike traditional rare earths mining, which can be laborious and expensive, Medallion is pioneering a process that extracts what is known as magnet metals, or more specifically neodymium and praseodymium (NdPr), from monazite.
Led by CEO Don Lay, who helped engineer several successful exits at companies like International Taurus Resources and American Bonanza, the team includes a mix of rare earths mining veterans and capital markets executives.
“Rare earth metals are a set of elements that are important for virtually everything electronic and modern in your life,” Lay said in a recent interview with Proactive.
Rare earths prices saw record highs in 2012, but then plummeted to uneconomic levels in the past few years. Now, however, a recent A$1.5 billion takeover bid for major NdPr producer Lynas Corporation Ltd by Australian conglomerate Wesfarmers Limited indicates that investor interest in the rare earths space is starting to increase in a big way.
$6 billion market opportunity
NdPr is the main ingredient for the powerful magnets needed in motors and generators of electric vehicles, wind turbines and a variety of clean energy applications.
The market for magnet metals is growing at a fast pace. According to Bloomberg research, the benchmark China prices of NdPr has increased by nearly 30% in the last two years, with no new significant mining projects in development to fill the shortfall.
Longer-term market forecasts for magnet-oriented rare earth oxides like NdPr are expected to reach over $6 billion by 2025, according to Adamas Intelligence.
“The market has tended to focus on lithium and cobalt as the two missing ingredients in batteries that are required in electric vehicles, but also you require an electric motor, or traction motor, which powers the vehicle itself,” said CEO Lay.
“You can’t make a lightweight powerful electric motor without permanent rare earth magnets. Those magnets need NdPr and those are found in good quantities in monazite, which is what we are looking to process.”
Unique business model
The business model is relatively simple but unique among its rare earths peers.
Medallion is developing an approach to create value from monazite by pioneering a new metallurgical process to extract magnet metals from the mining byproduct.
“It’s a very efficient operation compared to a hard rock mine because we are buying really concentrated material, processing it simply and selling that product,” said Lay in an interview.
In June 2017 Medallion partnered with US-based materials technology company Rare Earth Salts Separations and Refining LLC (RES). The partnership sees Medallion and RES jointly producing, marketing and sharing revenue from the sale of finished rare earth products.
Medallion supplies RES with the rare earth concentrate and RES then separates and refines into marketable products. The entire process takes place in North America.
The junior company also received a federal grant from the Government of Canada to support test work in partnership with the Saskatchewan Research Council that focuses on processing routes and analysis of major waste streams, including those containing radioactive elements that can be found in monazite.
What are some upcoming catalysts?
Medallion shareholders can expect news surrounding process development, strategic partnerships and financing to fill the company’s 2019 calendar.
On the marketing front, Medallion is looking to secure partners or customers to develop other markets and look into radiological waste analysis.
Having already raised close to C$600,000 to further metallurgical test programs, the junior is considering a strategic deal to supply feedstock to a third party.
The proceeds from its most recent financing are earmarked for process development work. Subsequent proceeds will be used for an economic study, likely a preliminary economic analysis, to show the value of the operation.
A global magnet metals producer
Medallion’s vision is to compete with the Chinese market as a global producer of magnet metals.
Lay and his team are no strangers to the task ahead. “Our long-term plan is to process available monazite,” he said. “It can be tricky to do so because it is slightly radioactive material, so it’s important that you can do it all safely, including transportation and disposal.
“It creates some challenges to getting the business, but we’ve been at this a long time.”
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