A REE Exploration Story - White Cliff Minerals Limited (ASX:WCN)
Coffee with Samso Episode 169 with Ed Mead, Technical Director of White Cliff Minerals Limited (ASX:WCN)
The Rare Earth Story is all about Neodymium and Praseodymium. The search for these two elements are makes the REE sector buoyant but one wonders what the fuss is all about.
How the current demand in the REE sector evolved.
The junior explorers are all talking REE and one can be forgiven that this is becoming a never ending story. Samso has seen many stories on the Coffee with Samso platform and other platforms over the last two years. In my opinion, the REE story is one that is more about being strategic than anything else.
When COVID came along and then China started to flex its muscles, that created the awakening of nationalism. Prior to that event, there was no doubt that the global industries were happy with sharing work, Globalisation. The REE sector was and still is a sector that is dominated by China. They have a lot of it and they make the products that use these metals.
It is becoming increasingly clear now that this dominance is not going well. The emergence of China being the next "Power Brothers" may have awaken world thinking that this is not a good idea. I remember doing some Rooster Talks with people at the early stage of the "Pandemic" and we mentioned about the probability that the world could find alternative markets. Looking at it now two years on, this appears to be playing itself out.
REE is in Demand
The demand of REE is really about the permanent magnets. There is no need to explain the technical information as I am sure that is all over google. What I feel is in play, especially in Western Australia is the geological advantage of having a lot of these metals and in the right jurisdiction.
On top of that, I do feel that there is a strong possibility that an industry could be created in Australia for Australians. Looking at the the flow of business in the Lithium sector with the building of the Tianqi Lithium Hydorxide plant in Kwinana, there is optimism that a downstream industry could be created that will supplement the mining of lithium and the REEs. This may lead to other metals but that may be a longer term dream.
Governments are now working with industry and are doing more proactive talking. A few years ago, the most they did was proactive listening. Today, there is sentiment of government actions that are giving companies time to express their wishes.
The White Cliff Story
White Cliff Minerals are one of the many small cap hopefuls that are applying their trade to make a discovery. The company has two main projects, the Yinnetharra (Figure 1) and Hines Hill (Figure 2) project.
In this episode of Coffee with Samso, Ed shares with us what is strategic about the Hines Hill and the Yinnetharra project.
At the Yinnetharra project, their recent rock chip sample (3,912 ppm TREO with 26% MREO) is clearly indicating mineralisation. It may only be a rock chip but that is a great indication that there is a cooking mechanism in place. You do not need to look very far to realise that this region is now known for REE mineralisation.
Yinnetharra Project
The Yinnetharra Li/REE project consists of two tenement applications, E09/2628 and E09/2641 (Figure 2), within the Gascoyne lithium region, located about 100km northeast of Gascoyne Junction and 85km south of Hastings Rare Earths (ASX:HAS) world-class Yangibana rare earths project.
Figure 1: White Cliff Minerals Limited Yinnetharra project tenement location.
The understanding of what it takes to make a hard rock REE project work cannot be underestimated. White Cliff Minerals have two projects tha
The Yinnetharra project is in a very hotly contested region of the Gascoyne Province where you have Hastings Technology Metals Limited (ASX: HAS) (Figure 3) building a plant to support their REE resource.
Figure 3: Map showing location of Yangibana deposits and planned site infrastructure. (Source Hasting Website: December 22022 Quarterly Activities Report)
Hines Hill Project
The Hines Hill REE project consists of one tenement granted tenement (E70/5875) within the Yilgarn region, located 20km west of Merredin and along the Great Eastern Highway. The project area is underlain by granites of the Yilgarn craton, with multiple SW/NE trending dykes transecting the license.
The project area contains two large aeromagnetic anomalies which may be indicative of carbonatite intrusives. In addition, sampling by the GSWA in the Yilgarn craton defined a strong REE anomaly in the vicinity of the aeromagnetic anomalies. It is therefore believed that the project area may host previously unknown carbonatite intrusives with REE mineralisation potential.
Figure 4: Hines Hill project.
What I like about White Cliff is the location and the understanding that logistics, the ability to exit, is clear. The two projects are greenfield but they are located geologically that have not been walked over. The early signs from drilling and rock chip sampling have been encouraging .
As many people who have followed me, I am a fan of mineral exploration. The White Cliff story is a great example of having the ability to develop its own story. The Gascoyne province was largely unknown with some gold and base metal exploration in the past.
Today, it is a hype of activity for Rare Earths. There have been some significant discoveries recently so the proof of mineralisation is now completed. White Cliff will take a while to develop its story but that is mineral exploration. It has a low market capitalisation and that will keep the punters happy.
Figure 5: White Cliff Minerals price chart. (Source: Commsec)
Samos's Conclusion
As the general market have come back over the last six months, I think this is a great time to have a close look at stories like White Cliff. I know that there have been may other stories but I know the management and they are doing people. What investors need to understand is that as a shareholder, it is all about the story and management.
From the investing point of view, I like the projects and the potential it may bring. The REE sector is hard and as Ed mentioned, it is all about the unlocking of the flow sheet. When this ability to unlocked the downstream process, I firmly believe that there will be a shift in controls of the REE market.
The world needs efficiency in less emission technologies and the components of the REE sector is the main player. As I always say, we are in the transition of a global industrial shift.
There are more advanced projects to look at and I am by no means saying that the White Cliff story is the only one. The placement of your investment faith will be really about your risk appetite and your patience.
Chapters:
00:00 Start
00:20 Introduction
01:23 Edward Mead
02:25 About the recent announcement
05:23 Why was the Yinnietharra area overlooked?
09:43 How should investors position for the REE Sector?
14:54 Hines Hill
16:54 What are the upsides?
19:20 Can the rare earths conversation be sustained?
22:42 View on the market for 2023
27:20 News flow
29:07 Why White Cliff Minerals?
29:49 Conclusion