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Chief Analyst Ben Kramer Miller of Mining Wealth sat down recently for a comprehensive interview with Texas Rare Earth CEO Dan Gorski, board member Jack Lifton, and Chairman Anthony Marchese for a detailed interview that serves as a comprehensive overview of the Round Top Mountain project and its current state and the current state of the rare earth market. It’s a freewheeling discussion that explores a lot of great angles. Here are some of the more interesting points from the various speakers:
Jack Lifton:
Round Top is in the top 2 or 3 known rare earth deposits in the world as far as distribution goes.
The PEA is based on current Chinese prices, not lofty projections. He’s become involved with Texas Rare Earths because they’re running as a business, not a promotion.
Dan Gorski:
Round Top Mountain is easy to mine; the deposit is right on surface, so there’s no stripping.
Recovery is very good. The leaching process that they’ve designed does not degrade the structure of the rhyolite, there was virtually no slump in the column leach test. This makes for easy grade control.
The current PEA does not value certain rare earths for which the company is confident a market will develop.
A pilot processing plant can be built for around $500,000. Such a plant would take the bench-scale process, automate it, and make it more continuous.
A full feasibility study for Round Top would take about 10 months and cost $1.5 million.
Dan Gorski, while illustrating a point, arbitrarily figures in a $100/kg price for ytterbium, extracting a chuckle from Lifton who explains that the current substitute for ytterbium sells for $15,000/kg
Availability drives demand. There is no price for ytterbium right now, only because there is no supply. Once Round top is producing, there will be great availability.
Anthony Marchese:
A TRER investor has no geological risk; the PEA has shown that there are indicated and inferred resources at Round Top.
The company has also taken steps to eliminate the metallurgical risk. They’ve shown that the deposit can create a saleable concentrate. Should they be able to scale up, that concentrate will become more valuable.
The major risk is one of timing.
Round top, at $290M in initial capex (potentially less once the metallurgy is worked out at scale), is the lowest cost developing rare earth deposit available to investors.
In Anthony’s opinion, TRER is significantly undervalued relative to its peers.
Insiders and founders on about 35% of the stock, and they have institutional backing from both Highline Capital and SC Fundamental.
