Heavy Rare Earths Limited (ASX: HRE) - Preparing for 2024.
Richard Brescianini, is back with Coffee with Samso Episode 191 and sharing with us the path forward with Heavy Rare Earths Limited (ASX: HRE).
I have always said that Richard Brescianini, the Executive Director of Heavy Rare Minerals Limited, is the best person when it comes to understanding how the Rare Earth sector functions. Richard has had decades of experience within the sector and in this Coffee with Samso, he shares with us what is happening with HRE and what is the path forward in 2024.
The rare earth sector is undergoing some reality checks and as investors look around, there are only a real handful of companies left that can be considered as real contenders. There is a rush to go to Brazil to chase the so-called "ionic" projects but what everyone has to consider is what will be the economics of the business.
In this episode, Richard and I discuss what makes the business work. The metal extraction is critical and we know the answer is acid. The more acid we use, the more metals we get out. The cost of the acid extraction is a big hurdle but don't forget all the other aspects of the business.
Australian Clay Rare Earth projects may appear to be lacking in properties that are beneficial to having a good REE project, but they have lower jurisdiction risks, and hence the cost of having a sustainable infrastructure becomes challenging. Projects need to have consistency in all aspects of the deposit, such as metallurgical factors and grade.
We also discussed the other projects such as Duke and Perinjori. There was some exploration news on Duke and we had a good discussion on the merits of the project.
Samso's Conclusion
This Rare Earth sector requires investors and companies to have a long-term view of commercialisation. We all know that the challenge in working on clay rare earth projects has been a long road and very challenging. There have been many comments that the outcome for the companies promoting these projects will end in tears. If you have been following the markets you will be swayed with the depressed equity market.
I must admit that I had similar thoughts. My thoughts are whether the demand and the hype would be sustained. I recently attended a Rare Earth Conference in Canberra and I was surprised that I was super attentive over the 3 days. I think I may have only missed one talk. What I took away from that conference was a renewed enthusiasm for the sector.
The main reason is that there appears to have been a lot of money already spent. Furthermore, there seems to be a lot more money that is in place to help create a new downstream chain that is outside China. Before going to the conference, I heard all the talk but one has to take all those noise with some caution.
However, after the conference, I am convinced that the talk is real and the demand for more REE is believable. The establishment of the downstream process is in no way near being completed but the process is there. The amount of money that has been pledged to establish a non-China-aligned downstream chain is staggering. The projected demand for REE for our electrification journey appears to ensure the longevity of companies such as HRE.
Hence, my opinion for those who are interested in this sector should DYOR and look into what is happening behind the noise you hear from the general stream of news. Spend some time and look into what is happening in the real REE world.
Chapters:
00:00 Start
00:20 Introduction
01:10 Cowalinya Exploration Target
06:03 Could the geology create issues for your Exploration Target at Cowalinya?
09:05 All about the Duke Project.
14:03 Do you think Duke could have a different REE chemistry?
17:24 New Project - Perenjori
22:32 Discussion about the clay-hosted space
27:21 A second supply chain for the rare earths market?
37:58 What are the immediate goals for HRE to monetise the business?
44:17 What could disrupt the planning?
47:21 What should investors be looking out for?
52:05 Conclusion