All about the REE market with OD6 Metals Limited (ASX:OD6)
Coffee with Samso Episode 170 is with Brett Hazelden, Managing Director and CEO of OD6 Metals Limited (ASX: OD6).
The space in the Rare Earth sector is maturing fast and the understanding of the sector is highly sought after by investors and companies. Brett Hazelden has again, given us a masterclass on all aspects of the Rare Earth Industry.
The Story of OD6 Metals Limited (ASX: OD6)
OD6 Metals is all about Rare Earths Elements (REE) in the southern region of Western Australia. It is located just north of the town of Esperance. As we were doing this Coffee with Samso, the market capitalisation of the company was around AUD26M and the share price was sitting around AUD 0.25.
The company is focusing on both the Grass Patch and Splinter Rock project which have both undergone drilling campaigns defining potential resources. The most recent announcements have highlighted the recent activities at both projects.
Figure 1: Project locations for OD6 Metals Limited. (source: OD6 Metals)
The Word According To Brett Hazelden
For those readers that have been following the Samso platform, you will know that the last two Coffee with Samso has been in this commodity space. The general specifications of the Rare Earth sector is fundamentally the same.
We all know what the metals do and why they are important. As I have said many times, the key to the Clay Rare Earth sector is all about how to solve the downstream processing. The unlocking of this will open a floodgate of opportunities for both investors and companies.
What are the Key Points of the Unlocking of the Downstream Process?
One of the benefits of talking to so many industry leaders is that I am learning all the recent technologies and thinking processes. What the small cap industry excels in is the ability to think fast and nimble to get the story on track.
In the world of Rare Earth, Clay Rare Earth deposits, there is such a thing called "Refractory" and "Free Leaching" deposits. When I heard that, I had a light bulb moment. My first thought was that companies with free leaching clay deposits will be first cap of the "unlocking" process.
As everything is so new, this is one way of prioritising which company or what to look for in "stories". There are many other factors but I guess this is a great way to understand what companies have in respect to the geology and the potential of future deposits.
Samso Conclusion
There is nothing new for OD6 Metals Limited. The path forward is to generate tonnage and grade while they are looking for the answer to the processing part of the equation. The unknown part of the equation is not about the ability to extract the Rare Earths from the clays, as Brett mentioned. The question is what is the process to do this with best practice environmental process that will pass the test of time and the ESG signoff.
The biggest asset that OD6 Metals (apart from the obvious) is that the adjacent assets owned by other companies in the region are also facing the same issue and have similar resources. The collective group is making this region a Rare Earth province.
I have mentioned previously that my thoughts are that the government conversations indicate to me, that there is a potential of creating a Rare Earth downstream industry in Australia. The current political rhetoric with the rising China Cold War stance may indeed force the Australian government to react and this would be a great occasion for all those involved in the Southern Region of Western Australia.
Chapters:
00:00 Start
00:20 Introduction
01:13 Who is OD6?
01:54 How has the Airborne Electromagnetic Survey (AEM) worked for OD6.
03:40 OD6 is more about Size rather than Depth.
04:36 How has your understanding changed?
07:41 Differences between Grass Patch and Splinter Rock.
10:50 Differentiating Refractory styles to Free Leaching Styles of the REE Clays.
14:25 Are the Chinese more Clay or Ionic styles?
19:00 Can Ionic clay be a major commodity Industry?
20:23 How much has the rare earth market changed?
22:15 How does the rare earth market situation translate to the equity market?
23:45 Why OD6?
26:39 Current market
27:53 Conclusion