Can you expand on Western Rare Earths’ work in Arizona as the subsidiary of American Rare Earths Limited?

Our flagship Arizona property, the La Paz Rare Earth and Scandium project, has the potential to be the largest rare earths project in North America. It has a near negligible, low thorium content. Thorium is a major challenge for most rare earth mining projects in the west due to the coproduction of radioactive waste and concomitant radon off-gas. Our access to the site is excellent, as it has an existing road that goes through the heart of the project area. There are high voltage transmission lines nearby, and in this mining-friendly jurisdiction, mining has primacy on water rights. Finally, La Paz has a profile that has responded very well to wet high intensity magnetic separation, meaning we save on capex and opex costs.

We were able to expand the JORC Resource to 170 million t at La Paz, up from 135 million t after some drilling in 2021. At that same time, we did some reconnaissance drilling at about 4 km southwest based on some favorable surface sampling. We believe we have found what could be a much larger twin ore body. The next step is an aggressive drilling campaign in that area.

Why is it strategically important for the US to decrease its reliance on foreign production of rare earths?

China currently is the largest holder of rare earth reserves and is a net importer of rare earths as they control about 80% of all midstream processing. This processing represents the separation of rare earths from each other, the purification of individual oxides, and the production of metals that will be used for downstream manufacturing, notably in the electric vehicle motor market. China therefore has a strong grip on the supply chain to feed domestic manufacturers. A key point of contention is national defense. Rare earth magnets are used to manufacture electric motors in cruise missiles, submarines, fighter jets and other defense technologies. China is also the largest manufacturer of electric vehicles, wind turbines, air conditioning and refrigeration, so it is possible that their own manufacturing ecosystem could consume 100% of the rare earths magnets they produce, making manufacturing in the US and Europe very challenging.

What needs to be done to establish a domestic supply chain for rare earths?

At American Rare Earths and our US subsidiary, Western Rare Earths, we believe there is both market pull and government push to ensure a complete supply chain of rare earths in the US. The US is keen to collaborate with its allies, particularly in North America, to make a more complete supply chain here. The Bipartisan Infrastructure Law, the Chips-Plus Package and the Inflation Reduction Act also bring about substantial incentives and resources. The volume of materials needed is going to increase, so the supply chain needs to be short, secure and domestic.

The real void in our industry is in the midstream, particularly extraction, separation, and purification technologies. The federal government has rightly focused money for programs in the Department of Energy (DoE) and the Department of Defense (DoD) to incentivize and help set up the midstream processing. Key pieces of those efforts to help the supply chain in the US are the continued support of the Critical Materials Institute, of which we are Team Members. This yields us access to the top researchers in the country that have been working on the rare earths supply chain for over a decade. They are bringing forward some exciting technologies that we have been able to partner on. This has enabled us to be beneficiaries of both DoE and DoD funding in support of that R&D work to operationalize the supply chain with greener, cleaner technologies.

What can we expect to see from your team in the coming months?

In the wake of reporting data from the drilling campaigns we did in Arizona and Wyoming in spring 2022, we will be drilling for a maiden resource at our Halleck Creek project and drilling to expand the Resource at the La Paz project. In parallel, we are working on our R&D collaborations in extraction, separation and purification; two funded by DoE funds and one by DoD funding.