od6 metals limited

As we close off 2023, what a better way to end with Coffee with Samso Episode 193 is with Brett Hazelden, Managing Director and CEO of OD6 Metals Limited (ASX: OD6).

The Rare Earth story is now reaching a stage where it is now all about the chemistry. Most followers of the sector are now assuming and accepting that companies will report minerals resources that will be large enough to sustain any operations.

What is unknown is the cost of the chemistry that will bring in the revenue and profits at the end of the exercise. I think in this episode of Coffee with Samso, Brett Hazelden makes a very compelling case for the OD6 Metals story. There is a lot of confusion in the market in terms of what is the end game for these clay rare earth projects.

Brett is a metallurgist and he comes from experience when he talks about the downstream process. For those viewers who are pondering about the Rare Earth sector, this is a must watch episode of Coffee with Samso.

Samso Conclusion

As many of you who have followed the Samso platform, you would have been watching a lot of Rare Earth stories lately. There is no doubt that the rare earth industry is very complicated and confusing which is primarily being fuelled by a cloud of uncertainty on the future. This is something that I had as well but you would have heard me mention this very often, recently, that the trip to the rare earth conference in Canberra has pretty much cleared it up for me.

My optimism that was derived from the conference is not an indication that the sector is going on a bull run. My thoughts are that the reality of a strong future for the demand of rare earths will be very profitable for the companies that stick to their work and are able to sustain their path with funding.

The ability to attract funding over the period is critical. In some ways, you could look at the this time of the market as a reset of the rare earth story, in terms of valuation. This is the time to do your DYOR. For all investors, if the commodity boom is around the corner and the rare earth metals are part of that run, then you would want to do some good research now.

Chapters:

00:00 Start

00:20 Introduction

01:03 2023 recap

03:32 Understanding the chemistry

07:14 Lowering the costs of production

09:45 Discussion about ESG

11:27 What is driving the economics of these clay projects?

15:46 Difference between Australia and South America - grade and processing route?

19:38 Takeaways from the Canberra REECon

26:16 What’s on the cards for 2024?

32:03 Discussion about the rare earth market price

35:14 News flow

36:04 Final thoughts

39:46 Conclusion

Rooster Talk Episode 71 is with Brett Hazelden, Managing Director and CEO of OD6 Metals Limited (ASX: OD6). The OD6 story is now one step closer to its Holy Grail with the latest annoucnement. This latest Rooster Talk is a discussion on what the news mean for the company. Could this be an endorsement of the entire Clay Rare Earth sector.

The latest News - Hot of The Press.

The first conversation with Brett Hazelden on the first Coffee with Samso (OD6 Metals Limited (ASX: OD6) - The Rare Earth Elements Story.), my understanding for this Clay Rare Earth sector was initiated. I had to admit that what I had learnt before was scarce and had little foundation. now that we have had four lessons, I am starting to believe that I know this sector. The two projects, Splinter Rock and Grass Patch makes OD6 Metals Limited. The latest announcement is critical as it puts the question of " Can they get the REE out? " I feel that this question would have been on many lips and now it is confirmed. As Brett explains, the process is now pretty much a step at a time but one has to feel that things are gearing towards the positive rather than not. 

As Explained by Brett Hazelden

What it boils down to now is using the announced results and moving into the refinement of the process. When Brett talks about the path forward, it feels like there is a fair amount of confidence. It almost feels like they know what they are expecting. An interesting comment that I remember was that the current drilling is no longer a guessing game. They are expecting results to be much about the same. The geology, which is a common feature in all these type of deposits, are consistent and there are not much variability. This is what Brett has been told by his competent person, who knows the deposit style. What that means is that there will be no surprises from the current drilling program. 

What are the Key Points of the Annoucnement?

All system is a go. That is the take away point of the Rooster Talk. The much anticipated metallurgical results have come and the results are consistent with the company's expectations. The company now understands the geology and the mineralisation better. The resource building exercise appears to be simpler as management now knowing where the better grades and recoveries are located. The potential future resource is going to be big. The scale is not what investors may be used to as the number is going to be big. The simplistic nature of the geology will also mean that the resource definition process will be easier. 

Samso Conclusion

Having the fortune to have followed the OD6 journey for a while has been one of the best feelings of doing this job. I have always said that the business will be on its way forward once some results on the chemistry is known. Although, this is still very early stage, the results from the latest test have given news that are consistent with moving forward. The recovery rates in the 70% range appears to be what management was looking for as a start. The segregation of the impurities in the coarser fragments is fortuitous. The physical separation of the coarser materials form the fines will simplify the quality control process. I was once told that OD6 had a good project. When I first looked at the company and after doing a few Coffee with Samso and Rooster Talk, I agreed. However, the burning question was still about whether they can process the end product. As I understand from Brett, this is the first step to answering that question with conviction. I think when viewers watch the Rooster Talk, you will feel that there is some level of confidence in his voice. The resource is going to be big and he says, we only need 5% of that. 

Chapters:

00:00 Start

00:26 Introduction

00:59 Brett introduces the Findings from the annoucnement.

01:47 The details of the annoucnement.

06:12 Process of Defining the Quality of the REE End Product.

09:00 The Acid usage Discussion

11:12 Investors Expectations - Comparisons to Peers

14:56 Resource potential of OD6 4 projects.

16:04 Prop Prospect

18:28 It is all about the Stripping Ratio.

18:58 The "Good" Areas.

19:50 The perfect place for a project.

21:43 Market Sentiment - Critical Minerals Demand

23:53 News Flow

25:06 Drilling results should be consistent with previous drilling.

26:42 Easy to resource Clay REE Geology.

27:58 The Results Confirm that OD6 will Work.

28:51 Conclusion