This video with Andrew Trunks of Meteoric Resources and Andy discuss the vital importance of rare earth magnets and the implications of China’s control over their supply chain. It delves into the environmental and ethical considerations impacting production costs and highlights Meteoric Resources’ potential to become the world’s lowest-cost producer through its recent scoping study.
For more info on Meteoric Resources: https://meteoric.com.au/ ASX: MEI
00:00 China’s Control Over Rare Earth Magnets
05:57 Environmental and Ethical Concerns in Rare Earth Mining
06:30 Meteoric’s Competitive Edge in the Market
06:43 Scoping Study and Future Projections
Full Text Transcript: Meteoric Resources: Revealing China’s grip on rare earth magnet supply
Andrew Tunks, Meteoric Resources. How’s it going? It’s going great, Andrew. It’s great to meet you. It’s great to be, uh, great to meet you and great to be here. Um, so 2024 Rural Investment Symposium, how’s it going so far and tell me about it. Well,
it’s great to be back here. Last year was our first, uh, time at RIC Rural Investment Symposium.
We had a great time. We made it some crucial, uh, Introductions and met some crucial people and I’ll expand a little bit more on that in a minute, but um, we’re delighted to be back
Excellent. Um, what kind of flow are you seeing this year as opposed to the previous year? Is there more people or more excitement better?
I think there’s
more people. Um, I’d say excitement levels are similar I think the markets are tough at the moment. Generally speaking. I think you know, particularly in our field rare earths Um, I think the rare earth market has been tough. There’s, there’s a lot of politics around rare earth and China’s involvement, um, and domination of the sector.
And I think that creates investor uncertainty for many people. So, um, whereas last year we were very much a new kid on the block and we had lots of exciting news, um, this year I think the general investment philosophy around rare earth has changed a little bit. Prices are much lower. China has suppressed the prices.
Um, and that, that’s for that very reason to stop new companies like us coming into production. But it’s a cyclic thing. You know, they, they are so powerful in the industry that they can suppress the prices and, and it does, it is difficult for us. And the Western investment groups look so heavily towards, you know, short term investment return that they’re not prepared.
to wait for the cycle to change sometime. So it’s been a really tough few months, but it’s great to be here. Um, and I suppose on the back of some exciting news for us, like yesterday, we released our maiden scoping study. So we’ve only had the project for two years. Um, in that time, we’ve probably defined one of the world’s largest rare earth ore bodies.
So we’ve, we’ve been going hell for leather. And, um, you know, and it’s the Holy Trinity of the mining industry now. It’s, it’s the world’s largest contained rare earth ore body, certainly outside China. It’s the highest grade of any of the clay deposits and it has the best recovery of any of the clay deposits.
So it’s the largest with the highest grade with the best recovery. And it’s not often you get, uh, that trinity occurring together. So it’s an amazing project.
Yeah, no, it sounds like, and I want to get to that to the minute, but let’s talk about, you just said you think China’s suppressing rare earth, uh, Resources and minerals, minerals and resources.
When do you see that turning around, if you would, and give me a projection over the next six to 12 months, if you would.
So I think that the turnaround is the prices are depressed at the moment, to the extent that no one makes any money, right? So none of the existing producers, even in China, are making no money.
The, the, the ability of China to suppress the prices. is, is because they control not just the mining, but the whole supply chain. So they mine rare earths. They then, so they only mine about 60 percent of the rare earth around the globe, but then just about control well over 90 percent of all the post mining processing.
So they separate the rare earths into their individual components, they metallize the rare earths, they turn it into magnets, and then they use those magnets in electric cars. So, and then electric, uh, goods that they sell. So they control from mine through to product. And, and so what we’re saying is not just, so one, they’re dropping, they’ve dropped the price and, and it’s a Chinese price.
It’s published, you know, it’s controlled by China. So they have dropped the price. And what they’re talking about is under a, uh, a published policy called China 2025 is limiting the supply of rare earth magnets. So rare earth magnets, just for people who don’t understand, rare earth magnets are like any other magnet, like you played with when you were a kid, except they’re like between five and ten times more powerful.
And people might not know this, but every magnet, if you heat it up, and you pass a certain temperature, it loses its magnetism. Rare earth magnets go much higher temperature, so they are both more magnetic, and much higher temperature. So they’re great for defense applications, they’re great for Uh, high temperature engines, and because of, because of their extremely high magnetic power, they’re great for high performance things.
Like if you want your Tesla to go fast and far, you need rare earth magnets. The cheap Teslas use ferrite magnets, old school magnets, but they don’t go as fast and they don’t go as far. So um, and, so China control that whole supply chain. And what China is saying is, from 2025, you won’t be able to buy rare earth magnets off us anymore.
more. You’ll have to buy the car. You’ll have to buy the drive train. You’ll have to buy the vacuum cleaner, whatever that is, right? And that’s an enormous problem from the West because rare earth magnets are crucial in so many places and particularly in defense, but every EV, every, you know, high performance electric motor, every wind turbine or the electricity generation.
So rare earth magnets are crucial to us and China is saying, We’re going to stop selling them and, and very few are made in the West. So um, so they absolutely have control of the whole supply chain. So in terms of pricing, that’s a really interesting question. I believe that at some stage the West needs, the price needs to bifurcate.
China has a price, there’s a price in the West. The price in the West perhaps is a bit higher because it accounts for a higher responsibility around, around the environment, around people. Etc. The Chinese production and Myanmar production, which is right next door, has been incredibly polluting. It’s mined by small scale family collectives.
People can go on the internet and see this, you know, if you search on YouTube, you know, small scale rare earth mining in China, you’ll see some pretty horrid stuff. So, um, so that’s one of the reasons their cost base is so low, low. What meteoric represents, with its large tonnage, high grade, highest recovery, is the first deposit, in my opinion, in the West that really can compete at these super low prices.
And, um, we produced our scoping study yesterday. And really what it shows is that, um, under those projections, we would be the low cost producer on the planet. Not, not in the lowest quartile, but the low cost producer. And so it’s a very exciting project, albeit in a tough market.
Yeah, well about that, producing, give me a timeline here then, um, of when you’re looking to bring it, go into production.
Sure. So our, our internal goal within the company is first MREC 2027. So MREC is a mixed rare earth carbonate. That’s what we would produce from the mine and we believe we can have that into production by 2027. So we’re, we’re, Brazil has a great a set of policies around strategic minerals and an ability to bring them to the front of the queue for environmental licensing and government licensing.
So, um, we’re on that. This is an important project for Brazil as well. Sure. So we’re on that fast track process. We will, uh, according to that, we, all the environmental processes are state controlled and we would expect to get, uh, environmental sign off light in 2025. And that would lead to a, uh, financial investment decision, uh, at that time and then build throughout 2026, build the processing plant and in production and in mining by 2027.
So that’s pretty quick. That’s amazingly quick.
I agree. That’s
a very aggressive timeline, but we’re nearly 12 months into that timeline already and we’re right on schedule. So you need a
great jurisdiction to do that. And we don’t, yeah. And Brazil has been that for you as of right now.
Absolutely. And now that, and it’s interesting because that hasn’t always been my experience with Brazil.
I’ve been a gold explorer there for a long time, a micro cap gold explorer, and that’s tough because you’ve got a small project and it’s not, it’s, it’s not important on a world strategic basis and it’s not big enough. And so the environmental processing and the government, uh, Approvals around that they’re slow and they’re tough, but when you’ve got a world class project of something that’s really recognized as strategic value Yeah, then that’s a different ballgame and and the response that we’ve seen from both the state and the federal government Has been the best in my 30 years of the mining industry I’ve worked all over the world and I’ve never seen a government respond As quickly as Brazil has been able to both at the state level minister race You And Administrace is the name of our state, and that translates into English as General Mines.
Right? So what better state would you like to develop a mine in than one that’s called General Mines?
Right. Let’s talk about share structure here. One of, uh, my biggest, uh, concerns as a retail investor is, uh, how is the company protecting me, if you would, from things like dilution? So, if you would, tell me about what How many shares are outstanding, fully diluted?
Talk to me about warrants and how you’re protecting me as an investor. Sure.
So the company has been around for a very long time. The company first formed in Australia in 2004. And during that time, it’s explored for iron ore, diamonds, copper, gold, who knows what else, cobalt. I joined the company in 2018.
Um, and we refocused on gold in Brazil, and that’s how we got to Brazil. Um, and. But so, as is typical in Australian juniors that have been around for a long time, we have a lot of shares on issue, around 2 billion shares on issue. Um, there’s no outstanding, uh, warrants other than some staff performance rights.
So it’s not very many, so fully diluted, I think, uh, about 2. 1 billion, uh, shares. Um, current share price, about, uh, So a market cap of around three to four hundred million Australian dollars. Um, we have only, since the discovery of this process, uh, progress, program, sorry, we, which was about two years ago and our involvement in this project, we’ve only raised capital once.
Uh, we raised twenty million dollars, uh, at twelve and a half cents. Um, and that was around a year and a half ago. But what, what’s helped us since then is an injection of capital from the sale of a gold asset. So remember I said we’re in gold. We, we made a discovery. It did very well. It wasn’t big enough for us to develop and it was in the Amazon, which is tough, but a local company bought that office for 20 million.
So we got that cash injection. So we’ve still got, um, I think at the last quarter, about 27 million in the bank. Um, and Because of the strategic nature of this company, and particularly here in the U. S., where the U. S. is very aware of its exposure to China around rare earths and other critical minerals, crucial in defense.
So, we are working very hard with the U. S. government to try and find a way to secure funding for this project. So, and, um, potentially some of that money would be grant funding for specific projects. for specific projects within our projects, such as a pilot plan. Um, and, and there’ll be some to and fro on that, but, uh, that’s non dilutory money.
Um, so we’re very much looking forward to that. We’re also talking to the Brazilian National Development Bank and, and some Australian export credit finance groups. So all of that money potentially is grant money, which would be non dilutionary. Um, As part of the scoping study, we’ve published our capital cost around 300 million U.
S. Um, we already have, uh, an in principle agreement with Ex Im Bank, the U. S. Export Import Bank, to assist with the financing of that. So, at very competitive government rates. So, um, we’re also talking to a lot of different off take partners. Again, people who are nervous about China’s involvement in the sector.
and are looking to secure offtake that is outside the Chinese supply chain. And I think at the moment, that’s one of our biggest advantages. We are not associated with the Chinese supply chain at all. And we would like our product to not, you know, so there, there are a lot of mines outside China, but they all supply their material back into China.
Our goal is to remain completely independent. And I think funding will come with that because, because the West needs it. Yeah,
so Andrew, if people want to get in touch with you, uh, learn more about the company as well as invest in your stock, uh, what are you, what’s your company website and how do, uh, people buy your stock?
So we’re listed on the ASX, um, and the best way to do that if you’re a US citizen, probably through interactive brokers or, or, you know, a broker like Canaccord or Sprott. Um, we’re certainly covered by some of the major brokerage houses. Interactive Brokers we found is very good. Do not buy it on the OTC.
There is a very old OTC listing for this company. It’s completely defunct. Do not go there. Um, so that would be the best way. Contact me through our website, which is www. meteoric. com. au Um, and my name and my phone number are all over that website. And if people want to call me direct, always happy to talk to shareholders or potential shareholders about this project.
Excellent. I will put all of this in the show notes below on the channel as well as in the podcast on Apple and Spotify. Andrew, I just want to thank you so much for your time and telling us more about it.
It’s great to meet you, Andrew.
Great to meet you.
