Podcast summary and Notes on "ree splinter rock"

OD6 Metals Limited (ASX:OD6) Release Maiden Mineral Resource Estimate.

Coffee with Samso Episode 180, Brett Hazelden, Managing Director and CEO of OD6 Metals Limited (ASX: OD6) explains the highly anticipated Mineral Resource Estimate.

As the understanding of investors matures over the Rare Earth market, companies in this sector need to show that their story is moving forward. The release of the mineral resource by OD6 is significant as it starts to show the real pieces of the their approach in delivering value to shareholders.

ASX Announcement 18 July 2023 - Splinter Rock Rare Earth Project Maiden Mineral Resource Estimate - 344MTR @ 1,308ppm TREO at a 1,000ppm cut off.

A Recap of the OD6 Metals Limited (ASX: OD6) Story.

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. Figure 1 shows the recent investment highlights for the company in the most recent presentation.

Figure 1: Project locations for OD6 Metals Limited. (source: OD6 Metals)| Coffee with Samso | Samso

Figure 1: The current investment highlights for OD6 Metals Limited. (source: OD6 Presentation July 2023)

The Word According To Brett Hazelden

In this episode of Coffee with Samso Brett share with us what the Maiden Resource means and how it shapes the OD6 story. The 344Mt @ 1308ppm TREO is simply stating a baseline for the continuing work to establish a mining proposition. As I have mentioned several times, the Rare Earth players out in the market place is poised to clear a lot of misunderstanding or misinformation.

Like everyone interested in this space, the first market misconception to debunk is that there is a marked difference in "Ionic" and Non-Ionic" clay REE deposits. There is no physical noticeable difference. The only factor that differentiates the so called two types is its ability to leach out the elements easily.

Brett gives a good explanation of why the market needs to understand that there are many factors that go into a leachable product. The economics of the entire process needs to be considered.

What are the Key Points of the Unlocking of the Downstream Process?

In my opinion, the key discussion point for the OD6 Metals story at this stage is about the metallurgical aspects of the resource. The annoucnement of the Mineral Resource Estimate (MRE) is a step forward in establishing the fact that the resource exist and the grade is "good". I say "good" at this stage is because there is not really a lot of factual evidence on what is the grade that will work.

The cut off grade that was chosen is an indication that OD6 realise that there is a need for a high grade to make the processing story work. This is a good sign that the company understand that the process of extracting is not easy. Brett is putting the market on notice that the difficulty of extraction is one that will eat away at the technical nature of the deposit.

In the Coffee with Samso, Brett highlights that the high grade nature of the Splinter Rock Resource is a big positive. There is a good reason that in our industry, we say Grade is King. The cut off grade is almost starting a baseline of what is required to make the equation work for OD6.

The discussion of making sure all the parameters balance out with the economics and the ESG factors is clear and out in the the open. I like the fact that Brett does not shy away from telling the market the challenges.

The final thought on the take away from this Coffee with Samso is that the resource is only just 5% of the total potential in the Splinter Rock project. So if 344MT @1,308ppm TREO is the current resource and OD6 have only touched 5% of the project, then there is a lot of upside for OD6 Metals.

Samso Conclusion

The OD6 story is a work in progress where it has the potential of making its on success. What do I mean? In this Coffee with Samso, Brett outlines to the market that there is indeed a real resource in Splinter Rock. Brett has not only outline the potential abundance of resource, but it comes with one of the highest known resource grade.

As I have mentioned above, the story is unraveling and as the market is narrating itself on the future of the OD6 story, I think the majority of the market is not understanding that the "Alluvial" Rare Earth story is in its infancy. The jury on what works and what does not work is still having lunch and preparing for a long stint in the jury box.

There are many comments that you need an "ionic" style and the "clay" styles will not work is starting to be erroneous. As I am blessed in being able to talk to may people, I feel strongly that the real story will surprise many people.

What I find interesting is that investors always think that the process of business is rocket science. As many Samso followers will know, I like using analogies with food. The business of making money is no different to the guy selling pancakes or muffins.

The market for Rare Earth is now on the table due to the geopolitical situation of requiring "Western" sources. This need will allow the business of making Esperance a region for Rare Earth more realistic. OD6 is in the prime position to take advantage as it has two major components in its story, a large resource and its high grade nature in the resource.

The business of balancing the leachability and the cost of making it happen is all a matter of time. Investors need to be reminded that the business of mining is measured in years and decades. The likes of Warren Buffett invests for the long term and that is why they are the successful people we quote.

Chapters:

00:00 Start

00:20 Introduction

01:19 Splinter Rock Mineral Resource

01:55 1000ppm cutoff grade at Splinter Rock

04:40 How should investors look at the Maiden Mineral Resource?

05:55 Is the extraction process the more important discussion?

12:58 The larger the volume, the larger the area?

14:30 How much bigger can the resource get in terms of numbers?

17:49 The challenge of the mining sector

22:22 The geological consistency of the MagREO percentage

23:50 The significance of the hosting base rock in terms of chemistry

24:33 Possibility of grade variability?

26:13 Discussion about the rare earths market

27:19 The cost of mining soft rock and hard rock

29:03 Discussion about the current equity market

31:32 News flow

35:26 Main takeaway about the Maiden Mineral Resource

38:43 Conclusion

Coffee with Samso

enJuly 25, 2023

rare earth

ree project in western australia

od6 metals

ree splinter rock

ree exploration in esperance

A REE Story is now One Step Closer to Production - OD6 Metals Limited (ASX:OD6)

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.