The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Plan involves rare earths mine, metals separation and market North of 60 Mining News – September 13, 2019
A float plane touches down on Kendrick Bay in front of Ucore's Bokan Mountain rare earth elements project on Prince of Wales Island in Southeast Alaska.
A Tesla car being recharged. Electric vehicles require significantly more rare earths than similar cars with internal combustion engines.
Ucore Rare Metals Inc. has unveiled a three-tier strategy for delivering a non-Chinese source of rare earth elements to North American markets from its Bokan Mountain project in Alaska.
Called M3, for mines, metals and markets, Ucore's plan to meet the needs of an independent rare earth supply chain in the United States includes three initiatives: advancing its Bokan-Dotson Ridge rare earths project in Southeast Alaska to shovel-ready status; developing an associated facility to separate the rare earths found at Bokan into individual metals; and developing and cultivating a North American market for these REE.
"Current international events suggest that the U.S. is now on the threshold of a significant disruption to the domestic REE supply chain," said Ucore Rare Metals President and CEO Jim McKenzie. "Central to that crisis are heavy REE (HREE); materials indispensable to a host of American industries, including defense systems and artificial intelligence (AI)."
Most REE deposits contain some mixture of all the elements considered rare earths, which includes 15 lanthanides – the group of elements in their own row at the bottom of the periodic table –along with scandium and yttrium – a pair of elements that are commonly found in REE deposits and have similar characteristics.
While Ucore's Dotson Ridge deposit at Bokan Mountain is not the highest grade REE deposit in the U.S., it does have a particularly high concentration of the more highly sought after HREE.
Establish Bokan Mine
Towards the first tier of its strategy, Ucore has completed a preliminary economic assessment that considers mining the 4.79 million metric tons of indicated resource at Dotson Ridge that averages 0.6 percent (63.54 million pounds) total rare earth oxides.
While not particularly high-grade, this deposit has two important features – roughly 40 percent of the rare earths in the resource are the higher value heavy rare earth oxides; and the REE mineralization is concentrated in a swarm of steeply dipping veins.
The stark contrast between REE-enriched veins and barren rock allows for the use of an x-ray sorter to scan mined material as it heads up a conveyor and use a blast of high pressure air to reject REE-barren rocks before they drop into the grinder, reducing the mill feed by half.
The PEA, published early in 2013, proposes a 1,500-metric-tons-per-day underground mine, a 750-tpd mill and a state-of-the-art processing facility.
In essence, this doubles the grade of the material being processed and reduces the tailings by half.
After initial grinding, half of the remaining material can be skimmed by magnetic separation before getting a bath in nitric acid.
In addition to the economic advantages associated with purchasing and operating a smaller mill, this setup offers environmental benefits.
Although the PEA envisions a small facility to store tailings during the early stages of development, at a certain point the mine will consume all the tailings produced to fill underground voids, eliminating the need for further surface storage.
The mine envisioned in the PEA is expected to produce 2,500 tons of rare earth oxides per year during the first five years of full production; including an annual output of 105 tons of dysprosium oxide, 15 tons of terbium oxide, and 568 tons of yttrium oxide.
Ucore plans to update the mine plan considered in the PEA with current economic data and projections. Unlike the PEA, however, the new economic analysis will consider additional co-product metals from the mine, which is expected to increase the overall output.
Orca Holdings LLC, an Alaska-based company that is a major Ucore shareholder, is funding a re-evaluation study of co-products available in the existing Bokan flow sheet. Initial findings of this report are expected in the near term.
Critical metals separation
An important aspect to any rare earth project is the ability to separate the tightly interlocked rare earths into individual metals. China currently processes the bulk of the rare earth concentrates mined globally, even the ones mined at Mountain Pass, the only REE mine on U.S. soil.
In recent years, Ucore has focused much of its efforts on identifying and testing an efficient means of separating the rare earths at Bokan.
This search for a cutting edge REE separation technology led Ucore to IBC Advanced Technologies and that company's proprietary molecular recognition technology, commonly known as MRT.
The basic idea behind the MRT process is that "SuperLig resins" are engineered to grab ions based on various traits such as size, chemistry and geometry.
Using a solution derived from Bokan, IBC and Ucore demonstrated that this technology can efficiently pull out individual high-purity rare earth elements, including dysprosium to 99.99 percent purity.
After proving this technology works at the pilot plant scale, Ucore had planned to use it in the Strategic Metals Complex (SMC), a commercial scale REE separation facility slated to be built near the town of Ketchikan, which is about 35 miles from Bokan.
The two companies, however, landed on opposite sides of a legal battle over Ucore's bid to buy IBC. The court case has yet to be resolved.
With MRT tied up in court for the near-term, Ucore has decided to move ahead with the already proven solvent extraction (SX) technology for rare earth separation at the Strategic Metals Complex.
Ucore still aspires to incorporate MRT into SMC and this new and more efficient REE separation technology could be added to the processing facility once the legal battle is over.
"Such an approach effectively mitigates the current impasse but does not preclude the use of MRT in the mid-term," McKenzie wrote. "MRT, once legally liberated for use in REE applications, holds substantial promise as a complementary separation stage, potentially taking output product from SX circuits to otherwise impracticable levels of purity."
Marketing Bokan
The third component of Ucore's strategy to provide a domestic source of rare earths to help break China's near monopoly on the production of these elements involves a carefully planned outreach to best-in-class North American end users of this group of critical minerals.
China controls more than 80 percent of the global REE market and is buying rare earth and other critical mineral assets in South America, Africa, Australia and Greenland. This endeavor to maintain control of the market includes a minority ownership in the Mountain Pass REE mine in California.
"China is setting themselves up to control their technological needs domestically first and are beyond a doubt self-sufficient with REEs today," said Ucore Rare Metals Chairman Pat Ryan. "Their intent is to continue to control exports and pricing; the time is now to change the flow of world metals going to China and to set up North America for the next several decades of critical minerals infrastructure growth through Ucore's and other North American companies' initiatives."
Ucore's outreach initiative is focused on both the federal government and private sectors.
In recent years, the federal government has been increasingly involved in nurturing a domestic rare earth sector.
In July, President Donald Trump issued five official determinations under Section 303 of the Defense Production Act of 1950 declaring that domestic production, separation and manufacturing of rare earths is "essential to the national defense" of the U.S.
Title 3 of the Defense Production Act allows a U.S. President to incentivize the domestic industrial base with the goal of expanding the production and supply of critical materials and goods. Authorized incentives include loans, loan guarantees, direct purchases and purchase commitments, and the authority to procure and install equipment in private industrial facilities.
The Pentagon sent out letters asking the mining sector to provide plans for developing REE mines and processing facilities in the U.S. These memos also queried manufacturers about their requirements for this group of 17 essential elements.
Ucore was among the companies that responded to this query under Defense Production Act Title 3.
The company also recently met with senators Lisa Murkowski (R-Alaska) and Dan Sullivan (R-Alaska) in separate visits to Ketchikan, to discuss Bokan's promise as a secure domestic supply source for the rare earths essential to American defense and manufacturing sectors.
On the manufacturing side, the American automotive sector has become increasingly concerned over availability of parts containing rare earths if China restricts exports of these essential metals. This apprehension will likely increase as the sector transitions to a larger output of electric vehicles, which require more rare earths.
Beyond military and automotive, a wide range of products are improved by the unique characteristics of rare earths.
More information on the 17 rare earths and their applications can be found on page 40 of the Critical Minerals Alaska magazine.
Many consider Bokan a vital source of these essential elements.
"The Bokan-Dotson Ridge REE site is an excellent resource to support U.S. REE supply chain needs," said Jeff Green, president of J.A. Green & Company, a Washington DC-based government relations firm with specialized knowledge of defense contracting. "With its unique mineralization, especially for the heavy rare earths, it has high potential value in any effort to rebuild a domestic REE supply chain to meet both commercial and military requirements."
Ucore said its team has completed numerous meetings with industry front-runners in America and Japan exploring opportunities such as supply offtake agreements for rare earths mined and separated in Southeast Alaska.
Funding the initiative
To fund its three-tier initiative, Ucore is offering current shareholders the right to acquire additional company shares.
As part of this offering, Ucore is offering one right for every current share issued to acquire an additional share for C10 cents.
The rights and the common shares issuable upon exercise of the rights will be listed on the TSX Venture Exchange under the symbol UCU.RT beginning on Sept. 16 and trading of the rights will end at noon (Toronto time) on Oct. 23.
People who fully exercise their rights will be entitled to subscribe pro rata for additional shares, if available, that were not otherwise subscribed for in the rights offering.
If all the rights were exercised, Ucore would issue 284.13 million additional shares and raise C$28.4 million.
In combination with other funding initiatives, Ucore said it intends to use the majority of the proceeds from this offering to pursue its mines, metals and marketing strategy. The company also plans to use money raised to further strengthen and expand its intellectual property portfolio; continue to fund its research and development projects; and for general working capital.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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