Northern Minerals to look at opportunities to increase the Browns Range's potential output

Asian Metal: Thanks for accepting the interview of Asian Metal, George! Although your company is well known, would you like to give a brief introduction of your company firstly?

George: Northern Minerals is an Australian Stock Exchange listed Company (ASX:NTU) and is focusing on the production of Heavy Rare Earths from its operation in Northern Western Australia at Browns Range. On the 27th of July 2018, the company officially opened the plant, which will produce 1,100t of Mixed Rare Earth Carbonate per annum over the initial three-year trial period.

Asian Metal: Would you like to introduce your Browns Range project?

George: The 100% owned Brown Range Project was discovered by Northern Minerals in 2010 and after 3 years of exploration, developed a 11-year JORC compliant Mineral Resource/ Ore Reserve that has significant upside. In 2015, the company completed a Definitive Feasibility Study which included a number of specific studies, such as flowsheet development. In early 2017, the Company decided to proceed with the development of a three-year Pilot Plant, which aims to demonstrate the economic and technical viability of the project. Northern Minerals has already mined a three-year stockpile, which has commenced processing through the beneficiation plant, producing a xenotime concentrate that will now be processed through the hydrometallurgical plant to produce a mixed Rare Earth Carbonate with a Dysprosium content of approximately 8.5%.

Asian Metal: I would like to offer my sincerest congratulations to you as the Browns Range Pilot Plant has been set up successfully and you are going to offer heavy rare earths. Would you please to introduce when you are going to offer material and the current production capacity of Brown Range Pilot Plant?

George: We expect our first shipment of product from Browns Range at the end of September 2018. We expect to produce approximately 1,100t of mixed Rare Earth Carbonate per annum. The annual capacity includes 50t of Dysprosium, 7t of Terbium and 4.5t of Lutetium.

Asian Metal: From what I understand, Browns Range Pilot Plant's first stage production will be sold to China, is it? Would you like to introduce your sales plan?

George: Our offtake partner for the Pilot Plant Project is Lianyugang Zeyu New Materials Sales Co Ltd (JFMAG). We are currently looking at opportunities to increase the potential output of the Pilot Plant through initiatives including mine grade increase through selective mining methods, ore sorting, increasing the annual throughput rate to 72,000t through improved regional road infrastructure. Should these initiatives yield increased tonnes, then these volumes will be offered to both the Chinese and non-Chinese markets.

Asian Metal: May I know what's the development prospect of Browns Range Pilot Plant in the coming years?

George: The key focus for Northern Minerals in 2019 is to commission the Pilot Plant and achieve the name plate capacity being 72,000t per annum. We obviously need to make sure that we produce a product that meets our customer's quality specification. We have commenced work on the initiatives mentioned in the previous question and have commenced investigations into separation technologies. Exploration will be a big part of our future with the need to increase the life of mine.

The three-year Pilot Plant Project is designed to assess the technical and economic feasibility of a full-scale development of Browns Range. If positive, the Company is anticipating a project scale approximately 10x larger than the Pilot Plant for a mine life of at least 11 years.

Asian Metal: As far as I know, Northern Minerals started the second round of exploration drilling at Browns Range. What are the preliminary drilling results?

George: We recently announced some preliminary results from our latest drilling program in late July. At our newest prospect Dazzler, we had a preliminary intersection of 19m @ 8% TREO based on portable XRF readings. That is the most significant intersection we have produced since 2010. More significant is the geological setting and this opens up more areas for future investigation at Browns Range.

Asian Metal: According to the information from Asian Metal, the Chinese dysprosium oxide 99.5%min prices climbed up in this Q1 but showed downward trend in general in Q2 and Q3. The current prices hover at RMB1,145-1,165/kg (USD168-171/kg) EXW D/P, almost the same as those of early this year. Actually, the current prices stand at similar levels of those in Q3 of 2010. The demand from NdFeB magnet industry is weak now, which results in slow buying activities in dysprosium oxide 99.5%min market. Would you like to share your opinion about the dysprosium oxide 99.5%min demand and price trend in the coming years?

George: From various industry end user participants, future demand for Dysprosium remains strong and concerns over future supply are being discussed. Some industry analysts believe that stockpiles of Dysprosium have declined in China and if this is correct and demand is set to rise, then economic theory will suggest that price should increase. We know that so many other factors affect pricing, so it is so hard to predict. Non-Chinese consumers are concerned about a 100% controlled Dysprosium supply chain, so what is the rest of the world doing about resolving this issue?

Asian Metal: It is well-known that the EV and HEV industries are the major and promising downstream industries of dysprosium. Would you like to introduce your opinion about the development prospect of EV and HEV industries?

George: The EV industry is on an accelerated path of dominating the transport industry. It is only a matter of time when we see EV’s reaching 30% of total vehicle production. Many countries around the world have set aggressive targets of 2030 to eliminate non-EV new vehicles. This places pressure on many critical materials, none more so than Dysprosium.

Asian Metal: Thanks for your time and support for Asian Metal. Wish you every success in your business.

George: Thank you for the opportunity to be interviewed, and look forward to updating you on the progress on the project in late 2018.