Rare earth metals were little known before 1960, but in the sixty years since, it has become the foundation for our technologically driven society. You can find rare earth metals in nearly everything electronic from rechargeable batteries to missile guidance systems. There are no substitutes and if there is any supply chain squeezes, the manufacturing of all those convenient and necessary devices that make our life modern, would promptly grind to a halt.
Currently China holds all the cards with processing approximately 80% of the world’s rare earth elements. Even without trade spats, China’s dominance of the rare earth metals market is a little disconcerting. As such, governments in both Canada and the United States are actively seeking out safer sources. Rare earth metals is already a big market at USD$4.6 billion globally and its only going to get bigger as we switch to a world without fossil fuel. In fact, it is expected that rare earth demand will skyrocket 655% when EVs take over our roads.
Rare earth metals for the most part have had a good year with prices popping anywhere between 20 and 90%. Therefore it is no surprise that Canadian junior explorers are lining up to take advantage of the critical nature of these critical elements, but some juniors, like Vancouver-based Defense Metals (DEFN.V) are raising eyebrows with some impressive chemistry because extracting REEs from host rock is like getting your drunk friend to leave a rocking party. This ease of extraction places DEFN’s flagship Wicheeda project on the global map. Defense Metals is well ahead of its option obligations and is continuing to propel itself forward with some alacrity. When assay results come back in November from this summer’s drill campaign, Defense Metals and its investors may find themselves at the beginning of a financially joyful journey.
Equity.Guru’s Gaalen Engen, spoke with Defense Metals CEO and president, Craig Taylor, to get a quick look at the company, the Wicheeda property and its chemistry as well as what investors can look forward to over the next 12 months. Listen in!
Read more on Defense Metals:
Equity.Guru video: Defense Metals (DEFN.V) could thrive in face of U.S.- China trade war
Defense Metals (DEFN.V) metallurgical test results exceed expectations
Full disclosure: Defense Metals is an Equity.Guru marketing client
Processing rare earth elements creates low level radioactive waste the storage and disposal of which that needs to be taken into account especially in Canada with it’s legal framework requirements for aboriginal group and environmentalist intervener consultation that can drag out the approval process for lengthy periods.
Thanks for your feedback, Anthony, you are indeed correct. British Columbia ranks 14th in the world (we are definitely NOT the worst) in terms of permitting alacrity and only a little more than 70% of BC mining executives believe that they will receive a permit once applied for. This situation has grown more challenging over the last decade, but the Canadian government has been trying to put together a national mining plan that will streamline the process, eliminating unnecessary regulatory duplication and increasing transparency of the process in general. The first phase of this plan is to be implemented in 2020. It isn’t that we need less regulations, we just need to optimize the process so our permitting times fall in line with other mining jurisdictions like the United States. Also, 47% of Canadian junior explorers receive their permits within 3-6 months, so it isn’t untenable. So, yes there is a longer window in Canada which isn’t entirely certain. My answer to this is investors should pile on the due diligence before jumping on board any mining venture above the 49th parallel, but once permitted, they are mines just like any other and can make investors a tidy profit.