12th Rare Earth Summit
May 27-28, 2021
Hangzhou, Zhejiang, China
11th Aluminum Raw Materials Summit
May 20-21, 2021
Hangzhou, Zhejiang, China
9th Magnesium Summit
April 15-16, 2021
Hangzhou, Zhejiang, China
13th World InBiGeGa Forum
March 25-26, 2021
Hangzhou, Zhejiang, China
7th World Antimony Forum
June 13-14, 2019
Changsha, Hunan, China
7th Refractory & Abrasive Materials Summit 2019
May 23-24, 2019
Qingdao, Shandong, China
10th Aluminum Raw Materials Summit
May 16-17, 2019
Zhengzhou, Henan, China
11th Rare Earth Summit
May 9-10, 2019
Qingdao, Shandong, China
8th Magnesium Summit
April 11-12, 2019
Zhuhai, Guangdong, China
12th World InBiGeGa Forum
March 14-15, 2019
Zhuhai, Guangdong, China
6th World Manganese & Selenium Forum
May 21-22, 2018
Hainan Sanya, China
Interview with Al Shefsky, President and CEO of Pele Mountain Resources
Pele Mountain Resources, a leader in Canadian rare earth development, is focused on the sustainable development of its 100-percent owned Eco Ridge Mine Rare Earths and Uranium Project. Eco Ridge is located in Elliot Lake, the only Canadian mining camp to have ever achieved commercial rare earth production. With well-understood geology, mineralogy, and metallurgy, excellent regional infrastructure, and strong local support, Eco Ridge is an ideal location for a safe, secure, and reliable long-term supply of critical rare earth and uranium.
Pele Mountain: Developing rare earth deposits in Canada
----Interview with Al Shefsky, President and CEO of Pele Mountain Resources
Asian Metal: Al, thank you very much for agreeing to this interview. We are very excited about the progress at Elliot Lake and enjoy the updates that have been coming from your office.
Just last week, government officials invited global companies to China to collaborate on rare earth developments around the world, including work inside of the country while the US, Japan and European Union have an official complaint filed with the WTO. What do you think will come of this complaint, and what could it mean for other junior miners and exploration companies like yourself?
Al Shefsky: China’s restriction of rare earth exports through the imposition of quotas, at a time when global demand is growing, has effectively caused the prices of rare earths outside of China to rise and to be relatively higher on many of the rare earths than the prices within China. The higher prices create a positive environment for emerging rare earth developers like Pele Mountain Resources.
One of the benefits that China realizes from rare earth export restrictions has been to attract users of rare earths to open new factories inside China. In effect, China is able to leverage its dominance in rare earth production to generate stronger domestic economic growth and employment, which creates a strong incentive for China to continue the practice of restricting exports. It is unclear what impact, if any, the World Trade Organization complaint may have on the export quotas.
China also needs to remediate the environmental impacts of rare earth processing, which have been substantial, and has responded by starting to consolidate the rare earth industry. Furthermore, China recognizes that its rare earth resources are finite, especially in the case of heavy rare earths. It is likely that China will continue to manage its rare earth resources to maximize the benefits to its nation, notwithstanding the complaint by America, Europe and Japan at the World Trade Organization.
China’s focus on environmental remediation, industry consolidation and management of scarce rare earth resources will likely lead to sustainable higher prices in the rest of the world. There will be exceptions, especially in the case of lanthanum and cerium which will become more readily available once Molycorp and Lynas and some of the other emerging producers achieve commercial production at their new operations.
Based on surging global demand for clean energy and other high tech and defense applications that depend on rare earths, we expect heavy rare earths and neodymium will continue to be in short supply outside of China for many years to come, which provides outstanding opportunities for emerging developers who can bring heavy rare earths and neodymium to the market.
Pele Mountain Resources is exceptionally well positioned as one of the clear leaders in the development of new sources of heavy rare earths and neodymium outside of China.
Asian Metal: What are the greatest challenges you are facing at present in order to bring your deposit into production, and what core competencies and advantages does the Elliot Lake deposit have?
Al Shefsky: The greatest challenge for Pele Mountain at present is the undervaluation of our market capitalization relative to the value of the Eco Ridge Mine Rare Earths and Uranium Project.
One of our core competencies is our world-class development team at Eco Ridge. The team is led by Roger Payne P. Eng., a 20-year veteran of the Elliot Lake mining camp, who served as General Manager of Rio Algom Limited in the 1990s. Permitting efforts are being led by SENES Consultants Limited (“SENES”) and Golder Associates Ltd. (“Golder”), both of which have provided consulting services to Pele during the past five years at Eco Ridge and have worked closely with Mr. Payne during his tenure at Rio Algom. Senes and Golder have comprehensive knowledge and experience regarding the regulatory processes pertinent to licensing, operating, and decommissioning mines in Elliot Lake. Roscoe Postle Associates Inc. and SNC-Lavalin Inc. are leading the mine design and mineral processing design engineering, respectively. Pele’s Rare Metals Advisory Board includes renowned industry experts Dr. Tony Mariano and Dr. William Bird.
Pele Mountain has several competitive advantages at our Eco Ridge Mine Rare Earths and Uranium Project. Firstly, it is one of the few North American rare earth deposits with a positive NI 43-101 Preliminary Economic Assessment, and a significant majority of its rare earth revenue comes from heavy rare earths and neodymium. There is significant diversified by-product revenue from uranium. The deposit also outcrops at surface for more than four kilometers and dips at a shallow angle in a consistent, predictable manner over a large area; geology, mineralogy (primarily monazite), and metallurgy are well-understood.
There is outstanding regional infrastructure in-place, including roads, railway, power, natural gas, airport and deep-water ports, and there is enthusiastic local support for the project and a highly-qualified local work force. Elliot Lake is a proven mining camp with more than 300-million pounds of historic U3O8 production, and it is the only Canadian mining camp to have achieved commercial rare earth production. It was one of the most important sources of heavy rare earths in North America, and at one time, produced 35% of the world’s supply of Yttrium. The Province of Ontario has already granted two renewable 21-year mining leases at Eco Ridge, giving Pele the exclusive right to mine the deposit.
Asian Metal: What ultimate role do you see Canadian companies playing to meet the international demand for rare earth materials? What type of support have you seen from provincial and national governments in Canada?
Al Shefsky: Canadian deposits will provide a globally significant amount of the high value heavy rare earths and neodymium. Elliot Lake is the only Canadian mining camp that has commercially produced rare earths in the past and with a robust Preliminary Economic Assessment (“PEA”), outstanding infrastructure, well understood geology, mineralogy and metallurgy and strong local support, Pele Mountain’s Eco Ridge Mine Project is the ideal location for a safe, secure and reliable long term supply of heavy rare earths and neodymium. We have received encouraging interest about the development of the project from the Local, Provincial and Federal levels of government.
Asian Metal: I see that your company anticipates expanding current resource estimates. Can you tell me more about this development and what it could mean for the project? What role do you see uranium production playing at Elliot Lake?
Al Shefsky: Our current NI 43-101 resources support an 11-year mine life at 9000t/d, which generated a net present value of USD1.02 billion at a 10% discount rate and an internal rate of return of 50% in our Preliminary Economic Assessment.
The mineral resources at Eco Ridge have excellent potential for upgrade and expansion, with lower-than-normal exploration risk in the historically drilled areas. The mineralized reefs of the Elliot Lake mining camp are well known for their consistency and size and, to-date, Pele has a 100-percent success rate in upgrading inferred to indicated at Eco Ridge. There is excellent potential to add substantial new mineral resources in areas beyond the Resource Wireframe where the deposit remains open down dip within and beyond historically drilled areas. The addition of mineral resources presents an opportunity to expand mine life and improve project economics.
Uranium production at our Eco Ridge Mine Project is expected to account for about one-third of project revenue and provide an important source of revenue diversification.
Asian Metal: Your company just updated its preliminary economic assessment. Can you please comment on some of the newest developments and give us your opinion on the progress of the project?
Al Shefsky: We are extremely pleased with the updated PEA for Eco Ridge. The implementation of an acid baking circuit has a tremendous impact on our mineral recoveries and anticipated rare earth production resulting in significantly improved financial and operational results relative to our 2011 PEA. Also, historically drilled deposit extensions and our recent discovery of substantial new mineralization in the hanging wall above the main conglomerate bed have the potential to extend mine life by several years. Our updated PEA demonstrates that Pele Mountain Resources is one of the clear leaders in the ongoing race to develop new sources of heavy rare earths and neodymium outside of China. We are focused on transitioning into the feasibility and licensing stages as we advance Eco Ridge toward development and production.
Asian Metal: It is clear that you anticipate doing some of the processing and concentration on-site in Ontario. What would your plans be to address the need to separate the rare earths and when should the public expect more developments in regard to this issue?
Al Shefsky: Our updated Preliminary Economic Assessment includes a processing circuit that produces a mixed rare earth carbonate concentrate on site in Elliot Lake. Our goal is to also build the separation capacity at the project in Elliot Lake to maximize the benefits to our shareholders, the local communities, the Province of Ontario and to Canada. We are also looking into other possibilities to facilitate separation including outsourcing and strategic alliances. We have included fees of USD535-million in our economic model to account for charges relating to separation and upgrading of concentrates to high purity oxides.
Asian Metal: Prices for many rare earths have continued to fall since July in 2011 although there has been some appreciation for some materials, specifically heavy rare earths, over the last two months. What is your view of the market, and where do you anticipate seeing the largest growth in demand?
Al Shefsky: We expect the prices of cerium and lanthanum to continue falling as new supplies from the emerging producers outside of China come to market and we have forecasted prices accordingly in our PEA. On the other hand, we agree with the assessment of the United States Department of Energy that Dysprosium, Neodymium, Yttrium, Terbium and Europium will remain critical for the next 5-15 years as a result of their importance in clean energy applications and the potential for supply disruptions. We believe that surging global demand for the critical rare earths will continue to support high prices.
Asian Metal: Thank you, Al, and we all look forward to hearing more about your project at the 2012 International Rare Earth Summit in San Francisco this may. Have a great day.
Just last week, government officials invited global companies to China to collaborate on rare earth developments around the world, including work inside of the country while the US, Japan and European Union have an official complaint filed with the WTO. What do you think will come of this complaint, and what could it mean for other junior miners and exploration companies like yourself?
Al Shefsky: China’s restriction of rare earth exports through the imposition of quotas, at a time when global demand is growing, has effectively caused the prices of rare earths outside of China to rise and to be relatively higher on many of the rare earths than the prices within China. The higher prices create a positive environment for emerging rare earth developers like Pele Mountain Resources.
One of the benefits that China realizes from rare earth export restrictions has been to attract users of rare earths to open new factories inside China. In effect, China is able to leverage its dominance in rare earth production to generate stronger domestic economic growth and employment, which creates a strong incentive for China to continue the practice of restricting exports. It is unclear what impact, if any, the World Trade Organization complaint may have on the export quotas.
China also needs to remediate the environmental impacts of rare earth processing, which have been substantial, and has responded by starting to consolidate the rare earth industry. Furthermore, China recognizes that its rare earth resources are finite, especially in the case of heavy rare earths. It is likely that China will continue to manage its rare earth resources to maximize the benefits to its nation, notwithstanding the complaint by America, Europe and Japan at the World Trade Organization.
China’s focus on environmental remediation, industry consolidation and management of scarce rare earth resources will likely lead to sustainable higher prices in the rest of the world. There will be exceptions, especially in the case of lanthanum and cerium which will become more readily available once Molycorp and Lynas and some of the other emerging producers achieve commercial production at their new operations.
Based on surging global demand for clean energy and other high tech and defense applications that depend on rare earths, we expect heavy rare earths and neodymium will continue to be in short supply outside of China for many years to come, which provides outstanding opportunities for emerging developers who can bring heavy rare earths and neodymium to the market.
Pele Mountain Resources is exceptionally well positioned as one of the clear leaders in the development of new sources of heavy rare earths and neodymium outside of China.
Asian Metal: What are the greatest challenges you are facing at present in order to bring your deposit into production, and what core competencies and advantages does the Elliot Lake deposit have?
Al Shefsky: The greatest challenge for Pele Mountain at present is the undervaluation of our market capitalization relative to the value of the Eco Ridge Mine Rare Earths and Uranium Project.
One of our core competencies is our world-class development team at Eco Ridge. The team is led by Roger Payne P. Eng., a 20-year veteran of the Elliot Lake mining camp, who served as General Manager of Rio Algom Limited in the 1990s. Permitting efforts are being led by SENES Consultants Limited (“SENES”) and Golder Associates Ltd. (“Golder”), both of which have provided consulting services to Pele during the past five years at Eco Ridge and have worked closely with Mr. Payne during his tenure at Rio Algom. Senes and Golder have comprehensive knowledge and experience regarding the regulatory processes pertinent to licensing, operating, and decommissioning mines in Elliot Lake. Roscoe Postle Associates Inc. and SNC-Lavalin Inc. are leading the mine design and mineral processing design engineering, respectively. Pele’s Rare Metals Advisory Board includes renowned industry experts Dr. Tony Mariano and Dr. William Bird.
Pele Mountain has several competitive advantages at our Eco Ridge Mine Rare Earths and Uranium Project. Firstly, it is one of the few North American rare earth deposits with a positive NI 43-101 Preliminary Economic Assessment, and a significant majority of its rare earth revenue comes from heavy rare earths and neodymium. There is significant diversified by-product revenue from uranium. The deposit also outcrops at surface for more than four kilometers and dips at a shallow angle in a consistent, predictable manner over a large area; geology, mineralogy (primarily monazite), and metallurgy are well-understood.
There is outstanding regional infrastructure in-place, including roads, railway, power, natural gas, airport and deep-water ports, and there is enthusiastic local support for the project and a highly-qualified local work force. Elliot Lake is a proven mining camp with more than 300-million pounds of historic U3O8 production, and it is the only Canadian mining camp to have achieved commercial rare earth production. It was one of the most important sources of heavy rare earths in North America, and at one time, produced 35% of the world’s supply of Yttrium. The Province of Ontario has already granted two renewable 21-year mining leases at Eco Ridge, giving Pele the exclusive right to mine the deposit.
Asian Metal: What ultimate role do you see Canadian companies playing to meet the international demand for rare earth materials? What type of support have you seen from provincial and national governments in Canada?
Al Shefsky: Canadian deposits will provide a globally significant amount of the high value heavy rare earths and neodymium. Elliot Lake is the only Canadian mining camp that has commercially produced rare earths in the past and with a robust Preliminary Economic Assessment (“PEA”), outstanding infrastructure, well understood geology, mineralogy and metallurgy and strong local support, Pele Mountain’s Eco Ridge Mine Project is the ideal location for a safe, secure and reliable long term supply of heavy rare earths and neodymium. We have received encouraging interest about the development of the project from the Local, Provincial and Federal levels of government.
Asian Metal: I see that your company anticipates expanding current resource estimates. Can you tell me more about this development and what it could mean for the project? What role do you see uranium production playing at Elliot Lake?
Al Shefsky: Our current NI 43-101 resources support an 11-year mine life at 9000t/d, which generated a net present value of USD1.02 billion at a 10% discount rate and an internal rate of return of 50% in our Preliminary Economic Assessment.
The mineral resources at Eco Ridge have excellent potential for upgrade and expansion, with lower-than-normal exploration risk in the historically drilled areas. The mineralized reefs of the Elliot Lake mining camp are well known for their consistency and size and, to-date, Pele has a 100-percent success rate in upgrading inferred to indicated at Eco Ridge. There is excellent potential to add substantial new mineral resources in areas beyond the Resource Wireframe where the deposit remains open down dip within and beyond historically drilled areas. The addition of mineral resources presents an opportunity to expand mine life and improve project economics.
Uranium production at our Eco Ridge Mine Project is expected to account for about one-third of project revenue and provide an important source of revenue diversification.
Asian Metal: Your company just updated its preliminary economic assessment. Can you please comment on some of the newest developments and give us your opinion on the progress of the project?
Al Shefsky: We are extremely pleased with the updated PEA for Eco Ridge. The implementation of an acid baking circuit has a tremendous impact on our mineral recoveries and anticipated rare earth production resulting in significantly improved financial and operational results relative to our 2011 PEA. Also, historically drilled deposit extensions and our recent discovery of substantial new mineralization in the hanging wall above the main conglomerate bed have the potential to extend mine life by several years. Our updated PEA demonstrates that Pele Mountain Resources is one of the clear leaders in the ongoing race to develop new sources of heavy rare earths and neodymium outside of China. We are focused on transitioning into the feasibility and licensing stages as we advance Eco Ridge toward development and production.
Asian Metal: It is clear that you anticipate doing some of the processing and concentration on-site in Ontario. What would your plans be to address the need to separate the rare earths and when should the public expect more developments in regard to this issue?
Al Shefsky: Our updated Preliminary Economic Assessment includes a processing circuit that produces a mixed rare earth carbonate concentrate on site in Elliot Lake. Our goal is to also build the separation capacity at the project in Elliot Lake to maximize the benefits to our shareholders, the local communities, the Province of Ontario and to Canada. We are also looking into other possibilities to facilitate separation including outsourcing and strategic alliances. We have included fees of USD535-million in our economic model to account for charges relating to separation and upgrading of concentrates to high purity oxides.
Asian Metal: Prices for many rare earths have continued to fall since July in 2011 although there has been some appreciation for some materials, specifically heavy rare earths, over the last two months. What is your view of the market, and where do you anticipate seeing the largest growth in demand?
Al Shefsky: We expect the prices of cerium and lanthanum to continue falling as new supplies from the emerging producers outside of China come to market and we have forecasted prices accordingly in our PEA. On the other hand, we agree with the assessment of the United States Department of Energy that Dysprosium, Neodymium, Yttrium, Terbium and Europium will remain critical for the next 5-15 years as a result of their importance in clean energy applications and the potential for supply disruptions. We believe that surging global demand for the critical rare earths will continue to support high prices.
Asian Metal: Thank you, Al, and we all look forward to hearing more about your project at the 2012 International Rare Earth Summit in San Francisco this may. Have a great day.