Tracy A. Moore, CEO, Canada Rare Earth Corp. (TSX.V: LL) Discusses Developing an Integrated Rare Earth Business, Generating Revenues and Positive Cash Flow by Producing, Sourcing and Selling
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 3/21/2022
We spoke with Tracy A. Moore, CEO and Director of Canada Rare Earth Corp. (TSX.V: LL). Canada Rare Earth Corp. is developing an integrated business, within the global rare earth industry. Its key focus is to generate revenues and positive cash flow, from a variety of profit centers, in the rare earth production and sales chain, by sourcing, adding value and selling rare earths, in all stages and forms.
The Company is in the process of establishing its own mining, concentrating and refinery capabilities, in addition to working with affiliated and third-party organizations. Plans for 2022 include resource development, expanding the supplier base of concentrates and oxides, continuing the process of acquiring a refinery, and solidifying, even further, the Company's customer base.
Canada Rare Earth Corp.
Dr. Allen Alper:
This is Dr. Allen Alper, Editor-in-Chief of Metals News, talking with Tracy A. Moore, CEO and Director of Canada Rare Earth Corporation. Tracy, could you give us an overview of your Company and what differentiates it others?
Tracy A. Moore: Canada Rare Earth is in business. We have sales, we make purchases, we have customers and simultaneously, we're developing a proprietary property, in South America and acquiring a completed rare earth refinery. What really differentiates us from others, is that we are in business and simultaneously developing proprietary streams.
We have three key elements to our business strategy. The first of which is resource development, based on multiple proprietary properties and augmented with exceptional third-party supply, which is immediately available.
Secondly, is the development of a value-added midstream processing capability. We're looking at acquiring a refinery and developing another as well. We're in discussions, with two national governments and some other prospective joint venture partners, to establish a rare earth business.
Thirdly, as I mentioned, we have sales of products to our solid customer base, and we are actively in discussions developing other prospective customers. As a result, we're actively looking to increase our supply, of readily available products, to sell into our solid and expanding customer base.
Dr. Allen Alper:
That sounds very good. I wonder if you could tell our readers/investors a little bit about the rare earth market, the uses of rare earths, and where you think it's going?
Tracy A. Moore:
We're in the rare earth business, and obviously we're in the business because we believe in the future. With increasing numbers of technologies that utilize and benefit from rare earths, we see the number of applications increasing and also the unit numbers of each application increasing. We believe that there is a good demand going forward for the rare earth elements.
Additionally, we believe we can capture a share of the existing market and a good amount of the future growth. There are many international businesses and national governments looking for alternate supply. They are extremely concerned about whether the supply of rare earth will be continuously and reliably available to them from current sources. They see strategic vulnerabilities, arising from possible adverse foreign actions, pandemics, global tensions, natural disasters and other events that could disrupt the access and distribution of these critical elements. We are positioning to provide an alternative and alleviate some of the uncertainty.
While we see good amount of demand today and an increasing amount of demand going-forward, we're solidly of the view that the secure, reliable and transparent supply we are building will help accelerate demand at an even faster rate.
Rare earths have many significant benefits that are applicable to an extremely broad range of applications. Our supply will help relieve some of this global angst regarding tenuous supply. From our perspective, we see demand increasing at an accelerating rate with security of supply. That looks promising to us.
Dr. Allen Alper:
That sounds very good. What role will rare earths play in the electrification of the world and electric vehicles, et cetera.
Tracy A. Moore:
Rare earth products are critical to many industries, including industrial, consumer, medical and military applications. There are many high-profile examples of where rare earths are utilized. They can be found in components that are integrated into electric vehicles, (for a number of reasons, which I’ll get into in a second,) but also wind turbines, telecommunications computers, medical equipment, cracking of oil, and many individual military applications, such as night-vision goggles through to high profile fighter jets and submarines.
Any one application doesn’t necessarily need a lot of rare earths, but each application can benefit significantly by the properties of these very unique minerals. For example, electric vehicles use permanent magnets which incorporate a number of rare earths, because they're so powerful. These magnets are smaller and lighter than others, which helps increase the range of electric vehicles. That's just one example of why rare earths are of interest to the manufacturers of electric vehicles. Rare earths are also used in many other applications in electric vehicles as well as hybrid and regular vehicles.
Dr. Allen Alper:
Oh, that sounds very good. Could you tell our readers/investors your primary plans and goals for 2022?
Tracy A. Moore:
We are simultaneously pursuing our three integrated and interdependent business elements: resource development, establishing rare earth processing facilities, and servicing our customer base. In particular, we are developing the processing capability of our large South American stockpile containing cassiterite, rare earths, zircon and ilmenite. This is not a question of whether we will process the tailings. Our focus is determining the scale of operations, the products we will produce and which part of the stockpile we will first process. For example, we are studying whether to produce a mixed concentrate or individual commercial mineral products.
We're also looking to expand our supply base of concentrates and oxides. We continue to have discussions with prospective suppliers, so that we can increase our supply, perhaps tenfold over and above the levels we've achieved in the past. That will go a long way towards satisfying the demand from our key and existing customer base, then we can bring on more customers.
We have also entered into and confirmed an exclusive distribution agreement for high purity and specialty rare earth oxide products, and we’ll be putting effort into selling those products. The increasing supply of concentrates and oxides will both help grow sales immediately, and also help feed concentrates into the refineries, we intend to develop or acquire and prepare us to sell the oxide products, derived from the refinery operations.
We're in the process of acquiring a refinery and we are looking at planning for an additional refinery, probably in South America. In addition, we've had discussions with several government groups and private corporations to consider establishing joint venture operations.
Thirdly, we're looking at solidifying our customer base, even further, by increasing our supply to them and, as I mentioned, with increasing supply we will be onboarding new clients, including those who have approached us.
So, we're very optimistic!
Dr. Allen Alper:
Oh, that sounds very good. Tracy, could you tell our readers/investors the primary reasons they should consider investing in Canada Rare Earth?
Tracy A. Moore:
Peers in the rare earth sector trade at 35 to 70 times trading earnings and have traded as high as 100 times. So, we are driving as fast as possible to become a profitable Company.
Dr. Allen Alper:
I appreciate estimates and forward looking statements are subject to variations. What do you think is the timing on all of this, Tracy?
Tracy A. Moore:
Well, for the stockpile project, it's being worked on now. I would hope that within several months we will have finalized our plans. Depending on the size and the scale, we would order equipment and perhaps, optimistically, be in operation later this year. As for the cash flowing from increased sales, we're looking at the very near future. Some pieces of the business have to come together, but it's being worked on, with great enthusiasm. We are very hopeful that in the near future, we will have significantly more sales and a reasonably strong, positive cash flow, based on those sales.
Dr. Allen Alper:
Well, that's very good. Is there anything else you'd like to add, Tracy?
Tracy A. Moore:
I think we've covered the main points. Well, we had a number of key accomplishments last year. One in particular, was hiring our Head of Global Trading, who is based in Hong Kong. Prior to joining us, he was responsible for completing over $2 billion of mineral commodities sales. He's a good person, capable, sees our vision, and he's definitely a key component of us going forward, in terms of expanding our commercial relevance to the world.
Dr. Allen Alper:
That sounds excellent! That's great! Anything else you'd like to add?
Tracy A. Moore:
I think that covers it all, unless you have some questions.
Dr. Allen Alper:
No, no, I think that all sounds good! We’ll publish your press releases as they come out so our readers/investors can follow your progress.
http://www.canadarareearth.com/
Tracy A. Moore
Chief Executive Officer
tmoore@canadarareearth.com
Peter Shearing
Chief Operating Officer
pshearing@canadarareearth.com
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