 Well, greetings everyone and a big hello to you, my friend John Kaiser just east of San Francisco city. How are you today? Gianni, I'm doing fantastic today. Glad to be on this special program with you talking about security of supply, which was a big deal back in 2009-2012 when we experienced rare earth mania 1.0. But I think it's going to become a much bigger deal going forward, given how the world has changed in the past decade. Absolutely. So let me give a bit of background for why I believe this is going to be a very, very much viewed video sought after. It's probably going to be shared with a lot of friends in the community. Anyone that follows commodities, natural resources, energy and innovation and technology and how all these things are coming together. Namely, what does it take to make it possible? And I recall from my background in electrical studies in the mid 1990s, a lot of the things they taught us were, they were science experiments. They simply were not commercially viable. I don't think anyone doubts that we are going into hyper adoption of modern energy schemes and the economies all over the world are looking for hyper efficiency in anything that consumes energy big or small. And so what we're going to talk about today is it's going to be a foundational, dare I even say a master class in rare earth elements, the 1.0 boom, but maybe more into the critical elements that make possible all these different things that you hear about batteries, wind power, electric vehicles, the integration of it all and what's even the most important thing is the security of supply. Where do they come from? And all the nuances. And I don't think there's anyone, there's probably three or four people in the world that have studied and written research on this topic. Anyone that has followed this space I think will be fascinated by the things that we talk about today. And as we boil that down and we don't even know how long this interview is going to go, it's going to be a back and forth. I hope you enjoy it. Great. Get a cup of coffee. You can turn it on and off over over one sitting or over a weekend. But we're going to go and start with the, give us a background. Rare earth elements that happened in 2010, 2011. Give us a baseline. What's the foundation on that, John? Well, I'll give you an even bigger baseline. And that is the super cycle that kicked in in 2003 when China finally started to come on stream as a major economic power. And the mining industry was blindsided by this. They did not anticipate it. And the demand for metals went up by an order of magnitude even. So we saw prices like copper go from 65, 70 cents a pound to as high as $4 a pound. And when it all came to an end with the 2008 crisis, the metal prices settled back at levels substantially higher than what was going on before. Now what enabled China to do so well was this whole concept of globalized trade. When the Cold War ended, all of a sudden, all this carving up of the world into communist and non-communist divisions, it ended. And it became a thing of who can produce the metal, the cheapest, and who will pay the most for it. So everything went all around the world to whoever wanted it. And it was in this context of globalization that the rare earth mania 1.0 happened. It was, I believe, a major blunder by China. They dominated rare earth production 90% or more. And they started introducing quotas to restrict the amount that could go offshore to the rest of the world. But then in 2010, they ended in a skirmish with Japan over the Senkandu Islands. And they escalated it and stopped shipping anything to Japan. And that triggered a panic because all of a sudden, the rare earths that were flowing freely from China at pretty cheap prices suddenly stayed in China. And to some degree, this was a strategy by China to force technology to move to China where they could have the access to these rare earths without worrying about it. And so magnet production and all that stuff is now mainly in China. And China won that battle. But the consequence of it was that rare earth prices went up 10, 20 fold. And the juniors in the rest of the world, which managed to grab all those projects that had been abandoned before, similar to what Ross Beatty did with his Lumina model ahead of the super cycle. And all of a sudden, these worthless copper deposits were in the money. All of a sudden, these deposits around the world were seriously in the money. Enormous capital flowed into the juniors. They spent a huge amount on economic studies, PEAs, all the way to feasibility studies. But not one of these projects really got to the level of production, except for Mountain Pass, which was the original world-class rare earth mine in California that Molycorp owned. And Molycorp went public in late July 2010, just in time to catch this wave. And that project had $1.6 billion sunk into it, but never really made it into full production. The world reacted to the high prices by engaging in thrifting R&D. So everybody figured out how to use less dysprosium in the neomagnets. And the Chinese finally realized we're destroying our own market. Everybody's even substituting out of rare earths as a result. And the prices have since crashed back to levels that prevailed before the blast-off in 2009. And this was a bubble, and everybody assumed globalization. China was violating the rules of globalization. This can't last. Everything will normalize, but it did normalize, except now we have something weird happening. We have de-globalization happening. And that changes the logic completely. Now, just so people understand that there was that project Mountain Pass, what was the value of that thing from peak to trough? Well, Molycorp went public at $14 IPO. They raised about $150 million or so, and they managed to raise another billion, billion to an equity. But the founders, they understood that this was a bubble. They sold up more than $2 billion worth of their founder's stock through secondary offerings. So this whole thing was a giant blowoff because everybody knew these prices were not sustainable. And at the end of the day, after they had acquired neomaterials, they had 250 million shares out, and they peaked at $79. So somewhere in there, it had a $10 to $20 billion market value. And the media was all over this. They loved this story about China putting the screws to the West. And here was this champion putting the old Mountain Pass back into production. But in the end, it died in bankruptcy. Yeah. You want to just adjust your camera just a little bit, John, just so your head is a little higher in the screen. I think that might help. Just a little bit. No, the other way. The other way. Yeah, there we go. Yeah, perfect. Now, the juniors, the people that followed down, these things were just parabolic. They went from pennies a share to dollars a share. It was just a phenomenal rise. And of course, the fantastic crash that came with it. Something that people often forget is that America and Europe were built predominantly on cheap oil and cheap commodity prices. So what happened is everyone forgot about the developing world. You used to count statistics with the OECD and maybe Taiwan and a couple other periphery countries, but it was not emerging markets. All of a sudden, these people started to consume things, China and Asia, Mexico, Thailand, Indonesia, all these different countries. And it was in a creeper effect. They paid for it. China ended up paying through the teeth for oil, for copper, for everything. We all recall that copper went, as you said, from 65, 70 cents a pound to $4 a pound. They were not happy about that. So in my view, they're a little bit more sophisticated. They're a little bit more strategic. They do have a really large strategic petroleum reserve, larger than the United States. With the United States is around 700 billion barrels. China is now around 1.1, 1.2 billion barrels, as we know. So when there's ever a discounting commodity prices, I will submit to people that they're able to absorb a little bit of this inventory to smooth out the price. Not that they're manipulating the market. They're just trying to not get taken over the coals again by traders and speculators. Ironically enough, that's exactly what's going to happen. Because if you have any commodity that stays at a low enough price for long enough, you end up having a void in expiration, a void in development, and you inevitably get a spike in that commodity price. And there's something that's developing, as we speak in my view, in copper, because demand is going to be very strong. The kegger growth rate for copper will be 3, 4, 5 percent at times in this decade simply because of the pervasive demand for copper throughout the global economy, namely its electrification. But there's something else that's happening. When you're looking at efficiency, to simply use less fossil fuels in the first place, you're talking about lightweighting materials. So this is a two-part question that we're going to go into. First of all, we need to dive a little bit deeper into this de-globalization. Who is going to be the price setter? Who owns these commodities? And then as you start to have more efficiency, when we talk about the lightweighting of steel or adopting from steel to sophisticated aluminum that's very strong and very light, there are two critical elements. So it separates them from rare earth elements. And of course, to make steel lighter and stronger, we're talking niobium. To make aluminum sophisticated, strong and light, we're talking about scandium. And that's really where this we're going to diverge, I think, a little bit from just rare earth elements because you don't want to get caught into these things, as some of the commentators that we know famously at conferences would joke with people. They would call not scandium, but scamium. Or it's so rare a material, they called it unobtainium and all the different names and jokes that they would come up with. This is different. I've been someone that tries to focus people on future trends. I've did it with lithium, electric vehicles, this energy pivot, copper, which is still a story that's ongoing. I've recently done it with helium because it's a commodity that's been taken up by big technology as a super coolant in servers rather than using more air conditioning. But what I'm trying to point out is that scandium, because of its use in sophisticated aluminum to make it stronger and lighter, if we can get supply. So there's a third part that we're going to talk about. So one, two, three, is the geopolitical situation. How does this work? And then of course, the chicken and egg, because if we don't have scandium, if we don't have the deposits, industry is not able to implement this scandium into sophisticated aluminum. So how can you put the first two together? The geopolitical situation and explaining to people how this niobium and scandium works. Okay. So the security of supply concept breaks down into two categories. One is supply that you're taking for granted gets disrupted for potential local civil wars, like say Congo, say they have a major war there and all of a sudden the cobalt supply out of Congo, which is 60%. Well-publicized story. Yes. And so that's another type of disruption. But a more worrisome type of disruption is what's brewing now. And that's a geopolitical disruption, which goes back to the old Cold War. And this is now being built as the new Cold War between the United States and China. And the attitude of the United States and everybody else during the globalization phase was that China would become eventually just like us. But that changed in 2012 when Xi Jinping became the leader, eventually leader for life. And he took a hard-nosed view of China as an autocracy run by the Communist Party. And it's become pretty clear that it is not going to be a democracy just like us. And so the United States has squared off against China, also acknowledging the fact that because they have a lower cost jurisdiction, lower labor costs, lower health and safety standards, lower environmental standards, they have an unfair edge in producing stuff, which has resulted in the hollowing out of the United States and the bypasses of all the populism that put Trump into place. And this is originally a Democrat idea of protectionism and being hostile towards free trade, where capital moves itself to wherever it gets the lowest price without caring about what's left behind, how the people left behind are affected. So no matter how this election turns out, this hostility towards China expanding its footprint is not going to go away. And as you alluded to, China has been very dependent on metals, and it's been pretty aggressive about bankrolling projects in places like Africa, taking over mines to make sure that it can ship the raw materials that it needs back home. In fact, even it's pushed into electric vehicles. It's not so much about worrying about climate change and so on. It's because their oil dependency is a major vulnerability. So they're firing all their electric vehicles with coal, which is very nasty for climate change, but they need to get away from oil dependency. But China is also a major supplier of a lot of metals, tungsten is one, antimony is another one. These are borrowing metals that go into the macroeconomy. They supply 80-85% of that. And then there's a rare earth, which we've already mentioned. If this conflict escalates, then we could see this supply disrupted. The other thing about security supply that's more of a feel-good thing is new technologies coming on stream, like electric vehicles and lithium ion batteries. All of a sudden you have new demand coming in, and it's a slow adoption curve that suddenly goes exponential, but the market is a supply and demand balanced thing. So in a lot of these metals we're seeing relatively low prices that make projects in other parts of the world like North America, hopeless to develop. There are dozens of rare earth deposits outside of China, but every single one of them at the current rare earth prices is marginal. So the question becomes, what's going to drive the price of these metals higher so that it is worthwhile for companies to acquire and develop them? Is it going to be a disruption of the supply or an escalation of demand due to new technologies coming on stream? And that's a big paradox that many of the companies out there that have these big deposits that don't quite work at the metal prices we have today are struggling with because the market says you need $30 cobalt to put your sunrise deposit, nickel cobalt scandium sunrise deposit into production, but it's 15 bucks right now. Yes, but in 2025-30, when the EV market goes exponential, you're going to need a lot more cobalt and the existing mine infrastructure can supply or even incrementally increase. So how do you overcome this problem that the future price will be higher and it takes three to five years to build and permit a mine? How do you get the capital in there now even though when you crunch the numbers the thing has a negative present value? So this is a huge problem that's hurting both the future and the juniors that have these projects and you almost need the negative type of... Low and behold they're floating mountain pass once again on it's the New York Stock Exchange? Yes and so mountain pass they built all three stages the flotation that produces a precat concentrate, the cracking segment that produces a sort of a mixed oxide mess because it all drops out together in one mess but you want separated rare earth oxides and they also had a separation plant but it never really got working properly and then when the rare earth prices crashed it didn't matter if it worked properly and right now they are taking or pushing it through the flotation circuit shipping it to China selling it for 100 million bucks a year on which they make 30 million bucks of profit and the Chinese do whatever it is and it doesn't actually come back to America so they've just kept this thing going as a cash flow thing after buying it out of the bankruptcy but last week they announced that they are going to merge with one of these blind pool shells on the New York Stock Exchange they're going to raise 300 million bucks at $10 the company's called MP Materials I don't know what they'll call themselves when they go public it'll probably happen in the fourth quarter and they will have about a 1.5 billion dollar valuation and their plan over the next two years is to refurbish these two circuits that never work properly and make America a turnkey producer of separated oxides so that magnet production and that is feasible in the United States now none of this makes sense if China continues to sell rare earths at the current cheap prices so embedded in this going public sometime in the fourth quarter of this year is the expectation that the conflict between China and the United States will escalate and we'll start seeing supply disruptions of rare earths and then there will be enormous pressure on them to hurry up and get this going again so that we can bring the supply chain closer to home rather than have it all originate in China and when this thing becomes public it'll be the first major stock that Robinhood traders that anybody investment funds can put into their portfolio and say this is my hedge against up this de-globalization process going out of control and there being severe shortages and I think in this iteration unlike the multi corp one from 2009 to 2012 this company is not just going to be a liquidity invent for the investors I think this company will become an American critical metals champion that acquires some of these other juniors in the first rare earth mania 1.0 iteration everybody was stabbing each other in the back because they knew they were only going to be displacing part of Chinese supply now it's potentially displacing all of Chinese supply plus with demand from the whole electric vehicle industry and that and wind turbines and that going through the roof the total demand will even eclipse what China is able to produce down the road so this time it'll be a longer running story with a better feel good type aspect to it and that's exactly the point one of the key things I want to underline in fact this cannot be underlined enough and I love it Don Cox always says this never invest in the story on page one that's the efficient market invest in the story on page 16 that's headed to page one so all of these planets are aligning you've got the scarcity of supply deglobalization hyper adoption of these modern energy schemes and these technologies that require more of these things and then you have a champion a leader like mountain pass or MP materials going public where if it's if it has adoption if it is on page one if it does have some kind of share price appreciation out of the get go this always trickles down into the next wave of companies that actually have a real project and a real concept and a lot of money that's been sunk there and they're trading at pennies per share and if we can start differentiating as I say these ones some of these lesser materials you cannot pronounce or we want to stay away from these things like unobtainium but because of the light weighting of steel and aluminum niobium and scandium are two commodities that you should be more familiar with and you'll start associating them maybe a little bit more like a lithium or like a cobalt doesn't mean they're going to have a huge market but the question is if it starts entering page one as a speculator and that's what I am I'm going to start looking at opportunities that are trading at pennies that if more attention is put to them I want to be part of that education process and I want to be ahead of the curve and that's where we are right now it's early days and and I think that some of the things that are happening in this space right now are going to be very exciting for speculators John please explain to people another potential game changer that's happening in the steel in the aluminum business you can go and vice versa I don't care the order but if you want to talk about what Rio Tinto has done in Quebec or some of the advancements in steel give give some give some color on that well the the light weighting concept that you mentioned wasn't one that was talked about a lot during rare earth media one point oh there it was all about the neomagnets that make hybrids and electric vehicles hydrogen fuel cell cars work they're all part of it they're also inside your laptops and and this this light weighting has to do with anything that moves and the ultimate light weighting metal for steel is niobium and you put less than 1% into steel and it strengthens it substantially and it also makes it corrosion resistant and those are two very important things and the niobium market is a three billion dollar market today it was nothing in the early 60s but that began to change when the cbmn family realized that the arasha deposit on which a resort was built because there was a hot spring association a resilient family correct yes it's a private private family uh they and ironically molly corp the old molly corp was actually part of this original deal but they didn't have the brains to to stay in it at the time and sold out their position but this deposit is a monster it's like five two hundred and fifty million tons of a two and a half percent niobium and dioxide and that's about five times higher than all other projects in deposits in the world this was a game changer when it came along and right now cbmn from arasha is about 80% of the supply and it could be 100% but it realized early on that there was reluctance amongst steel makers to adopt niobium as an alloying agent because they did not like dependency on a sole supplier which at that time brazil was a dictatorship and today it seems to want to become a dictatorship again and uh and and so they allow they they picked a price level that allowed projects like niobac in cobec to come on stream and iamgold had that for a while they sold it to a private company called magris about eight nine years ago and in 2010 while all the fuss was on the rare earth stuff a consortium of of japanese european korean steel makers put a billion bucks into cbmn and a chinese group put a billion bucks also into it and this was part of that went into the pockets of the cbmn family but the rest went into assuring that arasha could be scaled up and that there would be a stable price for niobium going forward so in terms of price appreciation you're not going to see anything except maybe inflation adjusted increases over time the price is 16 to 19 per pound for ferro niobium 40 to 45 per kilo in those units and cbmn will manage it they'll maintain their 80 supply and this space is growing at about a six cents compounded annual six and a half percent compounded annual growth rate so if you have a niobium project that's got high enough grade and proper recovery characteristics there is room to insert yourself into the future but for scandium it's a completely different story now i hold on a second i want people to understand crystal clear what's going to happen here so niobium niobium was effectively one deposit they had an uh let's say a holy alliance with people that required it so that the price would be stable for a long period of time and they fed industry but scandium and going into aluminum now this is a multi-deposit situation but there's a couple different types geology as well so there's the laterites which are you could talk about them and then you have some other opportunities where i think people should be they should really focus some attention on some of these other opportunities within that space but right now they do not have this alliance so to speak with the aluminum industry so the aluminum industry is looking who can give us this material over the next 20 or 30 years reliably at a decent price so that they can come together and that market can increase you know 10 or 20 fold so give us the background on what's going on with scandium so the the metallurgists have understood what scandium can do for aluminum since the 50s what if you if you alloy scandium into aluminum it bestows significant strength it bestows corrosion resistance and most importantly overlooked by most people is the it enhances its weldability with aluminum you have problems when you weld a joint the joint isn't as strong as the surrounding material unless you do special treatment afterwards which is why airplanes are all riveted together and not welded together because you can't have along these joints a weak point where shear will tear your tear your plane apart but the problem with scandium is that it's a dispersoid it's the very reason that plays the special role in aluminum and it can add enormous strength even at 0.1 percent contribution but it is more abundant in the earth's crust than lead and yet lead you know you get like 10 20% lead deposits but the dispersoid nature of scandium inhibits it from concentrating and until recently the richest deposit was the softy voli deposit in the ukraine that the soviets found next to an underground iron mine and it was enriched to a whipped you do 130 ppm which is about four times crustal abundance but they were able because they were a communist entity and care about costs this was a great supply for scandium and they built a mig fighter fleet out of aluminum scandium alloy and when the soviet union collapsed in 1989 or 90 it was over because it was not economic when there wasn't a military purpose for this anywhere and so the world lapsed back into this yetters scandium all over the place it's in the dirt in your backyard but it's way too expensive to put it into a concentrated form and make a master alloy out of it and feed it into the into your aluminum products and get that strength but in the mid 90s there were discoveries made in australia and new south wales and queensland where these laterite deposits were peculiarly enriched to 300 to 600 ppm and since then at least four of them have been taken to the feasibility level and now you have a potential for 1500 to 2000 per kilogram of scandium oxide to be available as almost an unlimited supply so this problem of having no resources to mine it has been solved but a new problem has emerged which is this chicken and the egg problem in that the current supply is somewhere between 15 and 25 tons per year some of it comes from a byproduct from the giant bionobal rare earth mine some of it comes from titanium dioxide waste stream stripping and you make your pigment and then the leftover stuff if you're using the sulfate process there is some scandium left which they are recovering some is recovered from uranium in situ leaching and and sumitomo has an operation where from a nickel cobalt deposit these things have 50 to 70 ppm and if they're able to recover a scandium from that operation but none of these sources are significantly scalable and this is just a pitiful 50 million dollar market so a company like scandium international wants to produce 35 tons per year that's that's that's more than that's doubling total supply but since it takes a couple years to build this and commission it and you have to raise the money in advance and the people have the money say well i want to have the the revenues guaranteed i want offtake agreements but the end users who need to roll out a new product line uh deploying this scandium alloy they're saying i have to wait how long to get this material i'm not committing it what if your chemical plant doesn't work what if you can't sell it to me then then i'm screwed so this all these companies have attempted to crack this chicken and the egg problem the scandium international had a two-year program of doing these letters of intent with end users experimenting with it showing them how to use it and the conclusion of most cases is yeah this would really work we could make money introducing this into our product lines but what we'll do a deal with you when you're producing it and they kind of crashed and burned at the end of last year with even Robert Friedland failed to crack the chicken egg problem from his sunrise nickel cobalt project it could produce 75 tons a year and if he got that up and running he would just stockpile it in a warehouse until the market evolved on its own okay so what what is Rio Tinto done in Quebec at their aluminum facility there okay so this this is the the game changer one of two game changers that have emerged this year you know scandium looked like a dead story at the end of end of last year but one of the developments that came out is that Rio Tinto which has for decades operated the lacteo iron titanium mine in Quebec it has an operation in Sorrel Tracy which is about 50 kilometers north of Montreal basically it's it's a furnace where they dump the iron titanium ore into it it completely melts they strip the iron out and the slag turns out to be 80% titanium dioxide and for decades they have been shipping this to the pigment makers who used the sulfate process and making a ton of money from this now when you hear of titanium you think of oh like special titanium metals and all that well titanium alloys are 3% of what titanium is used for 90 97% goes into paint whitening whitening products it's quite a boring story and most of it comes from heavy mineral sands which have ilmanite or rutile in it but pigment makers are using a chloride process increasingly for whatever reason and it requires 90 to 95% titanium dioxide feedstock so Rio Tinto had a problem on its hand in that the market for its 80% titanium slag was evaporating so they had to develop an upgrading process to bring it up to the 90 95% that everybody wanted and in the process their scientists figured out a way to recover the scandium because the lacteo deposit has 30 to 50 ppm of scandium in it and it ends up recording to the titanium slag so I estimate they haven't publicized any numbers but I've done some calculations I estimate that from sorrel tracy they could produce up to 50 tons of scandium oxide per year maybe more and of course Rio Tinto bought alkan it has its alkan division in Quebec so now it's in a position to recover the scandium on an as needed basis and the solution to the chicken and egg problem is to supply the market gradually instead of going from one big shot you know from 20 tons a year to suddenly make it in a 60 ton per year market and you need that kind of a minimum critical mass to develop a primary mind in the first place now you can increase this gradually and scandium international had realized too through it's a LOI program of the two years that the end users wanted to be getting bigger samples to test wanted to be getting this stuff even during the construction commissioning phase of the primary mind and so they said we'll build our own little melt shop and make master alloy which they figured out how to do but where do we source our source our scandium oxide well we can go to China they're selling a cheap right now because they don't have enough of it to bother doing anything China is the world's biggest aluminum producer and the biggest meter meter of you know lightweighted aluminum but they don't have enough of it to make it worth a while so so scandium international was in a pickle and they pursued their own strategy for solving this problem independently which I'll talk about a little later but the real tinto thing when this came out about a month and a half ago it was huge because now they could start cultivating this off-tape market without having to do any big capex this was a byproduct of a coming up with solution to a very big expect potentially expensive problem so now the market's looking and saying okay these guys can do it the chronos could probably do it with its talnes mine in in norway so we have potentially hundred tons of scandium coming from these two major magnetic titanium sources everything else is mineral sands and it doesn't really have a high high titanium scandium content so this this is a game changer and in my calculations and you know i looked at what the work that scandium international had done and i could see over a decade a thousand tons per annum demand evolving if the supply could be ramping up steadily and this is the jump starter the cracking of the chicken egg problem that will get scandium rolling all these companies that are sort of stranded and have pitiful valuations right now they are going to become much more interesting over the next couple years but this is an important thing to articulate now the aluminum industry what is aluminum it's effectively congealed electricity if you have cheap sources of electrical energy you think of norway canada iceland you can bring in the bauxite that material can come from anywhere in the world which is typically what happens it comes from uh africa predominantly and the market is massive so you're thinking right now people are listening well hold on a second these guys can spoon feed themselves reotento from one mine for one facility that's their internal company strategy so what i see coming together here if you could look at the tapestry you've got this geopolitical situation where people are trying to have some independence you have now a company like molly corp that's coming to be the poster child for these things to have a resurgence you have the entire innovation technology efficiency of global energy that's going into hyperdrive for either critical components and or the light weighting or the wanting to lightweight aluminum and steel where these things can survive in a very holy alliance where you you actually look at the the best deposits so if we look at those few scandium deposits there's not a lot of them there should be in my view as a speculator there should be a lot of interest for these projects to garner not just from speculators like myself that understands junior mining but actually generalist investors that go down the food chain that look at what's next and if we could differentiate now where are the four or five most developed most well-known scandium deposits they're actually i want to focus people's attention very selfishly here as an investor but to the province of cobec cobec has two opportunities one in a niobium but particularly one in scandium with with a company you've actually been to the project is my understanding some years ago in the 1.0 boom can you let's maybe talk about some opportunities that you have looked at or you've kicked some rocks or you understand from years past well but before we do that i want to articulate the other game changer thing that has emerged because we can't rely on real tento to actually follow through with this on any quick pace and it's the rapidity that is the key so the scandium international guys their cto willem divesting has experience with copper meat chain out from way back in the 70s and and and he realized that their loi strategy was not going to solve the chicken egg problem and he collected copper raffinates from a number of mines in arizona and elsewhere in the united states that do sxc w processing of copper and he determined that there's a significant amount of scandium in the waste stream that gets pumped back onto the pile and mixed with additional acid until the pile is depleted of copper and they filed a patent for a method of recovering not just scandium but other metals from this waste stream in late last year and they finally came out and told us about it in may and they are now negotiating with the the free port which is the largest of seven such operations and several others for deals to set up this waste stream cleaning operation and this is a huge deal because if they can get that scandium from that then they can feed their own melt shot so with these two parallel things going real tento is going to be looking over its shoulder and saying oh we can't take our time with this these scy guys if free port does a deal they're going to be able to produce a bunch of uh of scandium from this byproduct source also so so we better hurry along and of course what scy's goal is is to build up the off take order book the the in this gradualist manner because they already have the ningen mind permitted to go into production all that needs is a hundred million bucks and it's and it's almost shovel ready to get going so with these two tracks evolving um that opens up the space for these other projects there's several in australia the the owendale project that platina has a stony project the fleming team that's next to owendale and then of course robert friedland's uh uh sunrise project right now cleantech's focused on the the larger nickel cobalt uh scenario with this um 67 ppm scandium byproduct but right next to it is the original um what they used to call sierston it is the richest scandium deposit in the world but right now they're focused on the bigger picture thing but these things could all come on stream over the next five to six years each one adding 50 to 100 tons marching towards that the you know you know thousand tons per year but then the question comes okay so you get a hundred tons from from the the the the real tento style of titanium deposits uh uh you get maybe a hundred tons from all these other byproduct sources such as titanium dioxide waste stream stripping and and that maybe a hundred two hundred tons from red mud way way down the road but where do you get the additional primary supply that comes on stream five five five to ten years from now as it's now a no-brainer to put a 50 to 100 ton mine into production and that's where um the there are other magnetic deposits different from the the laterite deposits which are very expensive to process you have to throw acid heat and pressure basically an autoclave at them to put the scandium into solution but scandium international has the kibonini deposit in finland which is a a magnetic based thing it's lower grade but probably has better production characteristics but the one in Quebec that is the most interesting one is owned by imperial mining group it is called a crater lake deposit it used to be called misery lake i was actually at that site during my a site visit in 2009 when we went up to look at the strange lake project that quest rare metals had which was a heavy rare earth enriched deposit and this thing they don't have a resource estimate yet but they have a large system of uh uh uh scandium enriched in the sort of a 100 to 200 ppm range um that's not as high as those 300 to 600 ppm ones in in in australia they also report a little bit differently too right they're reporting in two different ways the imperial yeah they they see scandium oxide is 50 percent heavier than the scandium element and most the convention is to report the assays as elemental scandium so when we talk about 300 ppm that's actually 450 ppm scandium oxide and it's kind of like it muddies the water confuses things when you puff up your grade using uh uh a scandium oxide grades relative to what everybody else is doing but but that's neither here or there at the end of the day it's the scandium that counts the oxygen basically comes out of the air and adds itself to it uh a scandium metal you you have to end up making that in fact you blend scandium oxide it's a white powder into your aluminum melt and the oxygen the temp high temperature just blows off the oxygen so it disappears so it's just scandium that's uh in the um in in the aluminum alloy but the market prices it as an oxide because that's generally what you ship and transport it as yeah so continue with crater lake so you were you were at the site the the company um it's one of these examples so for for disclosure i own this one so i'm very selfishly motivated that people really understand imperial as a sub 10 cent share uh they just closing their financing right now and they are going to drill this 1500 meters this summer they will have enough drill density for a resource and they're also working towards completing an initial pea preliminary economic assessment and this will all happen for about a million and a half dollars which in my view is going to able that the company and the project to have a what should be a re-rating and a better understanding and this dovetails perfectly into this alignment of planets where you have mountain paths or mp materials going public you have this this strive towards the chicken and egg thing where you have these breakthroughs there is room for multiple deposits it's not about one or two but it's about an industry and potentially a larger company wanting to have exposure to something like this where i always believe a small company has a very difficult time building a mine they shouldn't do that it's a different skill set but if you can take a project um de-risk it to a certain point and create a fair or strategic partnership me as a shareholder i just want to see it get to that next level of de-risking which in most cases comes with some kind of a market cap appreciation so i'm going to follow the news very closely this summer but it's just interesting that you were actually at the project some years ago and maybe it was even before it was a discovery correct well it was recognized that it was a type of a ring it showed up as a ring structure in the uh magnetics and and it is a some sort of paralkalina intrusive complex that has had a collapsed structure around it and these things are sort of layered the different elements fractionate out at different levels and and what what's happened is it's collapsed inwards and so the layer in which the scangium got enriched are sort of uh sub vertical pointing down and they started drilling this off and they have very significant widths and this could be a very long-term supply uh it's its location is very remote they will never build a chemical plant up there to to to solve an extraction plant so they'll need to have a concentrator get it float it down to uh some concentrated level kind of like they do with mountain pass in stage one and then build a road and truck it farther south to set eels or somewhere like that where where there's lots of uh you know industrial capacity and set up your your plant there and this thing's great for Quebec because thanks to Quebec's hydroelectricity it has a strong aluminum smelting industry and so to be able to have a local source that's substantially large that I mean all these deposits Ningen I mean the the original operating scale would would operate for 200 years at that level so obviously there's expansion potential so Crater Lake I think will be a very important scandium resource in the future they do need to do the the more the the the final cracking and recovery metallurgy on that to finish the resource estimate so that we can see uh you know how much there is and how much they're going to target for mining and and so I could see something like this coming on stream five years from now the stock is is in the pennies because the market doesn't really understand the game-changing development for scandium that this Rio Tinto development that Sorrel Tracy represents and this strategy that scandium international is now pursuing with the copper leaching this chicken egg cracking solution is huge which is why I've become quite depressed after following the scanning space for 10 years but now I see it's it's like opening up light waiting is interesting to whether you're a climate change skeptic or believe climate change is real everybody likes to spend less money on fuel driving your car from here or there the aluminum industry would love to have an unlimited supply of scandium so that they can you know compete with steel because aluminum's problem is it's not very strong and some of these other series like lithium that they're very difficult to work with if it breaks it requires very complex equipment to repair whereas aluminum scandium alloy you make your Ford truck bed out of that and and and I say a missile drops from the sky and punctures the hole into it you'll be able to weld it back together again whereas with the lithium aluminum alloy no way can you do that so this this I this is a game changer and I think there'll be more deposits like kivonimi and crater lake discovered but you know you first have to look for those and you gotta go through the delineation cycle uh crater lake is at a point now where it deserves to be accelerated in terms of delineating the resource getting the metallurgy sorted out defining the economics starting the whole process of where are we going to build a plant and all coming on the backs of this game changing solution to the chicken egg problem yeah and I encourage so I guess from my understanding so um through this summer in this season they're going to do the drilling they're going to get enough data for this preliminary economic assessment and they're going to do what they're calling phase three metallurgy so phase two was for the flotation process and now the phase three is going to be for the hydro metallurgy on that project which is very important as you are already highlighted for us and um I guess this news flow will come over the next sort of three or four months but it'll be interesting to follow what will take place and all the things that we discussed about and also in Quebec niobium there's a there's something that you like within the niobium space as well correct well the niobect mine is is in southern Quebec and it's been operating since since the early 70s and it is very deep lots of it can operate for another 15 20 years but it's not really going to expand its supply the project that I'm following very closely is niobate metals which is just on the Ontario side of the of the border with Quebec in the James Bay lowlands and this was discovered in the mid 60s was taken to feasibility by Bechtel but they ended up never developing it because its location was remote niobect came on stream another deposit in brazil came on stream that's now owned by the chinese and so these three sources have pretty much uh uh dominated the supply in the world so nio not the james the james bay deposit uh similar grade to niobect coarser mineralogy so better recovery characteristics it's potentially the fourth one to come on stream and i've done the numbers on it that that company will also be putting out a pea later later this year hopefully in september which will give us the cost structure and this is important to emphasize with with projects like crater lake and and and and james bay with weird metals like niobium and scandium the key to these things is what is the cost structure for recovering what amount of material and once you know that then you know what the price is going to be and there's a lot of price insensitive stuff that can easily handle 1500 to 2000 dollars a kilo and i'm pretty sure real tend to nsl can division are going to identify these earlier price insensitive adopters that are very happy to pay 1500 to 2000 bucks and there's even innovations happening in the you know battery material space that could end up allowing an even higher price of scandium oxide to be completely viable to give people context as well on a kilogram basis you know copper is three dollars a pound or six dollars a kilogram so we're talking you know this material is very valuable whether it's a thousand or 1500 you know look at the price difference um let's wrap it up john it's been um it's been a good hour with you uh lots more to talk about lots of news to follow and let's see if these planets can align where there would be a we're not going to call it a rare earth element we're not going to call it a critical element we're going to call it uh innovation and technology and the things that make it possible and hyper efficiency and all the building blocks including the lesser ones like scandium and niobium and a security of supply where they will want to have these um these projects yeah so one final thing i'd like to say the scanning space is about taking a 50 million dollar market to two billion dollars over the next 10 to 15 years driven by projects that the juniors control and helped out by some of these things that Rio Tinto control which aren't scalable in the way primary supplies are most of the other critical metal space is about anxiety about disruption of supply about needing to have closer to home shorter supply chains uh in jurisdictions which are not going to get caught up in a new cold war conflict between china and the united states so one is something that you actually don't want to happen so it kind of means you got to be a pessimist and the other is a feel-good thing that wow this is something that's a win-win for everybody if it happens it's it's great for everybody which is why i love the fact that this chicken and egg problem finally looks like it's solved perfect well i'm a speculator and i speculated junior mining shares so i have one concern that can a sub 10 cent per share pico cap junior have an appreciation because some of these things we talked about become start entering the front page of newspapers and magazines around the world i'm speculating on it and uh i like scandium and of course for disclosure i own imperial so let's leave it at that and we'll do a follow-up in the coming months and see all this whole mp materials ipo goes live it sounds good and i am a shareholder of a scandium international okay very good so everyone knows right we're selfishly interested here okay thank you you have a conflict of interest okay talk to there john thank you gianny