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The existential need for strategic and critical metals became apparent in 2018 with the U-S Department of the Interior’s listing of 35 mineral commodities considered critical to the economic and national security of the United States.
Enter Defense Metals Corp. (TSX-V.DEFN, OTCQB: DFMTF, Forum) – delivering the critical resources that ensure both the security of our homeland and the development of green technologies for our future.
Defense Metals is a mineral exploration company focused on the acquisition of mineral deposits containing metals and elements commonly used in the electric power market, military, national security, and the production of green energy technologies, such as, high strength alloys and rare earth magnets. The company has an option to acquire 100-percent of the 1,708-hectare Wicheeda Rare Earth Element Property located near Prince George BC.
In this intriguing investor video podcast, Stockhouse Media’s Dave Jackson was joined by joined by company CEO Craig Taylor to discuss rare earths element production, updates on development and progress at their Wicheeda project, and the company’s strong growth metrics set for 2021.
SH: Can you update our investor audience and your D-E-F-N shareholders on all the new company developments, especially in the wake of COVID-19?
CT: In the wake of COVID-19, nothing’s really delayed us at this point. We’re not doing anything on site until the summer, so we’ve not really been impacted by COVID-19, but as far as developments go, there’s a lot to talk about. We’ve just recently sent High-Grade concentrate to several potential MOU off-take partners in Asia. So those are with Canada customs right now, awaiting shipment out of Canada – we need an export license for that, and it’s a bit of a process and I had some questions the other day about that, and they were asking if we’re going to be using this concentrate to build nuclear weapons. So I replied “no” to that one, but that’s the sort of process we’re going through. I expect in two weeks, we’ll ship those offshore. Those will go to some of the biggest processors in the world and they already have our data on the concentrate.
So they’re comfortable what we have, but they do have to look at it, see it, feel it. And then there’ll be getting back to us, hopefully some offtake agreements. So that’s one catalyst moving forward. We’re going to be drilling in the summer, hoping to expand our resource further. We did a drill program last year and it actually doubled the value of our resource. We increased our tonnage by about 7 million times and our grade by 1%, which was very significant. We’re open in several directions, so we expect to expand on that once we get the thaw in the summer and are able to drill. We’ve also engaged SRK to do our PEA, and that’s very significant because SRK is one of the leaders in the world in rare-earths. They did Mountain Pass’ or MP Materials PEA and Mt. Pass is the only producing rare earth mine in North America. And they’ve recently raised over a billion dollars and they’re in the process of building a separation plant down in California, which is due to be complete in 2022. And it’s our hope that we’ll be a potential feed for them in the future.
SH: To our Stockhouse audience that might not know the difference, what is a rare earths element producer?
CT:Okay. In our instance, we have the elements Nd-Pr (neodymium and praseodymium). And so those are the two elements most in demand in this day and age, because those are the elements used in the high powered, lightweight magnets that you see in every single electric vehicle made. Those go in all the engines for the rotary engines. They’re also an active development in Maglev trains, and all of the wind turbines you see have about 900 pounds of magnets in them, as well as all many of your household items, such as your cell phone (they have small magnets in them), refrigeration systems, medical devices, and then a huge array of military components as well. And so part of the attempt by the Canadian, US, really Western governments in general, is to try and secure the supply chain because as the US spends, give or take one or $1.2 trillion on their military expenses, a lot of the components are made in China. So they’re trying to obviously alleviate that as much as possible.
SH: You just announced that Defense Metals is preparing additional high-grade rare earth element concentrate samples for evaluation by leading global rare earths producers. Can you expand on this initiative for our investor audience?
CT:Yes, I can. We went through a pilot plant process at SGS labs. We took 30 tons of ore from the mountain in January 2019, so it gets through bench scale processing on the hydromat and flotation side, we came up with fantastic results, which then propelled us to go through the pilot plant stage. We ran through that process, it was a couple of months, and we produced 1200 kilos of high-grade concentrate. And this really hasn’t been done. There are very few rare earths companies in North America that have gone that far through their processing, so now we’re at the stage where we can sell that concentrate, or at least send it out to potential customers for offtake agreements. So that’s what I alluded to earlier. They have to see it, touch it, feel it.
They already have the data. They know that we were getting in some cases, 97% extraction from our concentrate on the oxide level. So they’re very comfortable with testing it through their separation facilities, which are up and running in Asia. We don’t have any up and running in North America yet, and that’s the hope we have, that in the future, through a Mountain Pass, through Linus, through Energy Fuels, or SRC and Saskatchewan, those would be logical feeds that we can supply in the future. But at this stage they’re just not up and running. They haven’t got the government support like they do in China. And I think there’s real efforts being made to correct that, but let’s wait and see.
SH: Can you unpack the benefits of it, further?
CT:Well, it’s really imperative that you could have potential financing for ongoing project developments. You could have customers that are willing to take concentrate that we produce in the future from a facility that we make. So really to have that sort of strategic ally is what everyone wants to achieve the end game.
SH: Can you talk a bit about the timelines for export licenses from Canada?
CT:This is one factor that’s held us back a little bit in the COVID realm. They said, it’ll take up to five weeks to export. We started the process about two weeks ago. So I’m hoping that we’ll get it out the door in two to three weeks max. And then that’s a fairly quick shift to, to Asia and, and they’ll turn it around very quickly over there. So I’m thinking within four to six weeks we should have some good results or answers out of Asia.
SH: The Company looks set for strong growth in 2021. How are you placed to expand operations to meet this demand?
CT: Well, really, we’re just going to get our PEA and that’ll determine what sort of facility we’re going to be producing in the future, whether it’s via a full hydromat separation facility, a flotation facility outside of Prince George. And we’ll also expand on our resource just to show that we have more product that we can ship in the future.
SH: For company shareholders and potential investors, what kind of future development and progress can we expect at your Wicheeda project?
CT:Step one is the PEA, step two is going to be drilling to expand the resource, step three is going to be our pilot plants for the hydromat at SGS Labs, step four would be pre-feasibility and potential offtake agreements. So there’s about four or five catalysts within the next four months to look forward to.
SH: I have to mention your stock has had a very nice bump over the last 12 months…more than tripling in value What can you tell our investor audience regarding the current valuation of your stock and why you think it’s still a good buy right now?
CT:I think if you compare us, we’ve got a very similar geology to Mountain Pass and their market cap is in excess of a billion dollars. And right now we’re at about a 20 to $25 million market cap, and we actually follow them. If you watch their stock and our stock, they’ve fallen 40% from their peak. So we started to edge up recently as have they, and I think just the world awareness to the crisis that is critical minerals being produced in China, has really gained attention. And of course the electric vehicle boom. There’s no shortage of electric vehicles being made. Every single car manufacturer is giving themselves to electric production in the future, as well as governments. They’re, t banning gasoline powered engines by 2035 in a lot of cases. So, that’s going to be exponential growth as well as the green initiative by Biden and a lot of the other Western countries to increase wind farm generation, Maglev trains, and electric vehicles.
SH: What’s the long-term strategy and what milestones should investors be looking for in regard to developing the project?
CT:Well, I think long-term, we’d like to either be bought out by the likes of a Mountain pass or a Chinese company perhaps, or Energy Fuels, Linus, and anyone in North America, preferably. And then it’s just going to be an ongoing process through our PEA, our drilling or pilot plants and our pre-feasibility, as I was saying. So we’re getting close, we’ve done a lot of work over the last two years, and I think we’re going to be ready to make those decisions going forward.
SH: Can you tell our audience a little bit about your corporate management and board teams, along with the experience and innovative ideas they bring to the critical resources space?
CT:Yeah, I guess one of the interesting things we did is we hired Carl Wagner, who’s an ex-CIA agent who’s was very active in the government and sort of the perseverance of acquiring critical minerals deposits in North America. As the Department of Defense has shown a real interest in investing in these initiatives, they’ve invested in Mountain Pass, they’ve invested in Linus, they’ve invested in Energy Fuels. And so he keeps them up to speed given his military background. So, that was an interesting acquisition for us. We have Alex Knox, who actually has a history with rare earths spanning back to the seventies at the old Mountain Pass site. So those are two strategic individuals who were brought on board. Jamie Spratt we’ve recently acquired, and he’s been an analyst in Toronto for a number of years, and can help us on me, the money raising and Corp Dev side. So we’ve got a lot of expertise, and I think they’re going to be utilized more going forward.
For regular updates, visit defensemetals.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.