China’s Rare Earth Supply Dominance In an ESG Era Targeted by Ucore Rare Metals & its New Tech

“Extracting the raw materials and manufacturing the technologies here at home must become a non-negotiable pillar of America’s energy and climate goals.” – May 21, 2021, Jude Clement, RealClearEnergy.org

Rare earth elements (REEs) represent a big challenge and an even bigger investment opportunity.

REEs are a collection of 17 metals that are critical to high-tech products like electric vehicles, wind turbines, smartphones, and aerospace and military components.

While these metals are abundant in the earth’s crust, the process to separate and purify them into oxides useable in the above mentioned applications has historically been costly, time consuming and harsh on the environment.

Given China’s 80% control of REE production and the ever-present threat of throttling supply for geo-political gain, the need for domestic production and greener processing has come to the fore at both State and Federal levels in the U.S.

With the ESG (Environmental, Social & Governance) movement gaining momentum globally, and an accelerating global pivot toward a greener economy, there is more demand for these metals than ever before. 

The rare earth metals bull market is here. 

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Ucore Rare Metals Inc. (TSXV:UCU) (OTCQX:UURAF)
Shares Outstanding: 47.75M

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60-Second Summary

• Growing Demand: REEs and rare earth oxides (REOs) are critical to major high-tech manufacturers:
  • Consumer Electronics: Apple, LG, Samsung
  • DOD & DOE Contractors: Materion, Boeing, General Dynamics, Lockheed, Northrop Grumman, Raytheon
  • Electric Vehicles: FCA, Ford, GM, Honda, Nissan, Tesla, Toyota, Renault, VW
  • Magnets: Hitachi, EEC, Shin-Etsu, TDK

• Supply Threat: China’s dominance of the REE mining and processing sectors leaves international manufacturers vulnerable, particularly in the US^[5]
  
  
• Big Opportunity: Ucore Rare Metals (TSXV:UCU) (OTCQX:UURAF), via their Alaska2023 business model, is building a secure, domestic REE and REO supply chain.
  
  
• Money Where Mouth Is: Ucore has invested C$15.7M to date on internal R&D and acquisition of best-in-class technology^[6] and $35 million into their 100% owned Bokan-Dotson Ridge REE property.
  
  
• Game changing technology: The patent-pending RapidSX separation technology is faster and has a smaller footprint than current outdated technologyes, which could lower opex and create capex savings of 60% to 70%
  
  
• Political Support: Significant support at the Federal & State levels for REE supply chain development
  
  
• Upside Potential: With competitor MP Materials having a $5.8B market cap on $13.4M in sales and no profits,^[7] it’s easily conceivable that Ucore’s revenue-focused model for REO separation services and licensing of a superior technology could enable the company to grow to be a $500M market cap industry leader.

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Since China controls 80% of global REE production and about 85% of the world’s rare earth oxide production, the pressure is on for North America to secure a sustainable, green and economical solution. Global demand for rare earth oxides used to produce advanced magnets alone is forecast to rise 5x over 2020 levels to $15.65B USD by 2030,^[1] outstripping supply by as early as 2021.

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Producing separated rare earth oxides (REOs) represents the most significant value-added revenue opportunity in the REE supply chain and it is critical to have the capability to separate and purify rare earths for use in industry outside of China.

Ucore Rare Metals Inc. (TSXV:UCU) (OTCQX:UURAF), formed in 2006 and a veteran player in the REE space, is aiming to break China’s stranglehold on the market, and timing could not be better

Their plan is to become a revenue-producing organization with vertically-integrated REO production and separation…and they’re actively working that plan:

• They’ve recently strengthened both management and technical teams
• In Q2 2020 they acquired Innovation Metals Corp. (IMC) and IMC’s advanced RapidSX™ process for separating and purifying REOs
• They realized C$6.7M of gross proceeds from a Q1 2021 non-brokered private placement

There are also growing tailwinds for REE supply chain development from US governments at Federal and State levels.

Alaska Governor Mike Dunleavy recently requested that federal decision makers designate Ucore’s Alaskan rare earth Bokan Project as a High Priority Infrastructure Project.^[2]

“America’s dependency on a non-allied, foreign-sourced, critical metals supply chain to support national defense, green energy initiatives, and high-tech product manufacturing is an ongoing concern at both the State and Federal levels.”
– Gov. Dunleavy

There’s also state-level funding in place. The Alaska legislature has authorized the Alaska Industrial Development and Export Authority (AIDEA) to issue US$145M in bond financing for the infrastructure and construction costs of Ucore’s Bokan Project.^[3]

Ucore’s recent progress shows they’re serious about creating revenue and near-term shareholder value by building their Alaska-based REE separation and purification plant founded on their newly acquired RapidSX technology.

And investors looking for a longer-term growth opportunity will also be encouraged by how Ucore is simultaneously executing their plan to systematically build a growing and scalable services and products enterprise.

“Is Ucore up for the challenge? Just watch us.”
– Pat Ryan, Ucore Chairman & Interim CEO^[4]

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Latest News:

May 18, 2021: Ucore Announces: Innovation Metals Corp. Establishes Technical Advisory Board of Renowned Rare-Earth and Critical-Metals Experts
“We are very excited and privileged to benefit from such a complementary, yet diverse group of industry experts to further enhance and advance the commercialization of the RapidSX technology. IMC’s ability to attract talent of this calibre underscores the near-term potential for this much-needed technology.”

May 12, 2021: Ucore Chairman & CEO Provides Strategic Update to Shareholders: Taking Action Today to Secure Tomorrow
“To all of our shareholders, I’m pleased to be able to offer the following updates pertaining to the crucial thrusts of our three-year business model – transformative technology, near-term processing, and long-term resource security.”

May 4, 2021: Ucore Subsidiary, Innovation Metals Corp., Commences RapidSX Separation Testing with Rare-Earth Producer
The Company’s wholly owned subsidiary, Innovation Metals Corp. has entered into a Technology Testing Agreement with a mining company located in a US-allied country whose principal product from its current mining operations is a mixed rare-earth element concentrate.

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Strategic Pivot to Address Major Market Need

Ucore Rare Metals (TSXV:UCU) (OTCQX:UURAF) has been around since 2006 as an exploration company focused on building a mine to supply rare earths to the global market.

But now they’re transitioning towards being more of a technology company, which is good reason to join Ucore’s mailing list so you don’t miss out on their ongoing progress updates.

With a veteran team, technology and funds in place, they’re positioning the company to break China’s domination of the rare earth element supply chain.

In the process, Ucore is looking to provide rare earth separation services and purified products to both the mining and mineral extraction industries.

They could also target non-REO metals used for electric vehicle batteries – lithium, cobalt and nickel – and other in-demand technology metals.

At the highest level, their plan to create a domestic REE and REO supply chain includes:

• Short-term development of a revenue-generating REE processing facility (the Alaska Strategic Metals Complex or Alaska SMC) to produce rare earth oxides from US-allied REE feedstocks (and, eventually, from their own mine’s feedstocks)
  
  
• Ongoing formation of strategic partnerships to develop additional REO production opportunities with potential downstream alloy and metal making
  
  
• Long-term building of a mine and mill to develop their REE project’s resource in Alaska, which represents the highest-grade NI 43-101 heavy REE resource in the US^[8]
  
  

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It’s important to understand that what sits at the heart of all these plans is recently acquired Innovation Metals Corp. (IMC) and IMC’s advanced RapidSX separation technology.

• A lot of big mixer/settler tanks are needed, so the processing plants can be large (think higher capex)
  
  
• Because the mixing and settling process in each tank takes time, and there are a lot of them, the full SX separation process can take weeks or months (think higher opex)
  
  
• Any disruption during the process, such as a large temperature change in the plant, results in delays of weeks before getting the process back up and running (again, higher opex and lower revenues)

There’s room for improvement and the time has come to replace antiquated, expensive and environmentally damaging technology.

Ucore has invested C$15.7M to date on internal R&D and acquisition of best-in-class technology^[9] so they can do it better, reducing capex and opex while being environmentally friendlier.

RapidSX Benefits

The patent-pending RapidSX separation technology is faster. It’s actually a very accelerated form of the traditional SX process.

RapidSX’s rapid solvent approach also means that any process disruptions can be recovered from in hours to a day, instead of weeks with traditional SX.

The tech also has a much smaller physical footprint. A single RapidSX column can have the output of 6 to 9 mixer settlers.

Taken together, those advantages could add up to significant capex savings of 60% to 70%.

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It’s easy to see how those factors could directly give Ucore major cost savings and a significant competitive advantage (through their wholly owned Innovation Metals Corp., owners of the RapidSX tech).

Those same advantages will also look very attractive to any company wanting to license the RapidSX technology for their own use, thereby giving Ucore a whole new revenue driver.

Better yet, the RapidSX technology’s process lines are modular, scalable and feedstock-agnostic. That means Ucore and any licensees could easily scale their commercial production capacity across both REEs and other critical metals like lithium, cobalt, nickel and more.

“The interest expressed from potential RapidSX end users all over the world has never been higher.”
– Innovation Metals Corp. President, Ty Dinwoodie, Jan. 29, 2021^[10]

New CEO Knows How to Build a Viable Revenue Company

In the words of Ucore Rare Metals (TSXV:UCU) (OTCQX:UURAF), “The Company is in an active transition to become a revenue-producing organization with vertically integrated capabilities and production.”^[11]

Ryan was the strategic architect behind Neocon, from capital raising to assembling and directing a team of R&D engineers. With major customers such as Honda, GM and Nissan/Renault, they obviously know what they’re doing.

Conclusion

Ucore Rare Metals Inc. (TSXV:UCU) (OTCQX:UURAF) has the team, resources and technological advantage to potentially create a domestic REE and REO supply chain that breaks China’s sector stranglehold. Tens of millions of dollars have been invested to move the company toward full commercialization.

They’re actively working their plan’s short-term, ongoing and long-term aspects with a focus on becoming a revenue-producing, vertically integrated organization serving a growing market, and in compliance with today’s demanding ESG strictures.

Federal and State governments are throwing their weight behind domestic rare earth supply chain development, including Alaska authorizing US$145M in financing to support of Ucore’s Bokan Project.^[12]

The potential is clearly there for both near-term and longer-term creation of shareholder value, so now would be the time to begin your due diligence.

Visit Ucore’s website to learn more.

Join Ucore’s mailing list to be alerted to future corporate updates.

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Management Team

Pat Ryan, P.Eng.
Chairman & Interim Chief Executive Officer

Mr. Ryan is the Founder of Neocon International, a multi-million-dollar automotive OEM design and lean manufacturing company which he conceptualized in 1993. From the outset he was the strategic architect responsible for raising capital, procuring equipment and facilities, assembling and directing a team of R&D engineers and establishing niche product opportunities including light-weighting to improve fuel efficiency.

He has amassed twenty-five plus years of business experience serving customers such as Honda, General Motors and Nissan/Renault with numerous team awards for stellar performance, including Toyota’s Platinum Quality Alliance Award received in 2016.

His understanding of complex supply chains across international markets has led to a prime positioning as the global auto world transitions to vehicle electrification.

Mr. Ryan began as a Director of Ucore in 2014 when he had a heightened interest with critical metals needed to drive change for the technologies of the twenty-first century.

Mr. Ryan frequently speaks publicly to business leaders looking for new insights and mentors MBA as well as graduating engineering students from Dalhousie University from which he holds a Bachelor of Engineering degree. He is the recipient of the APENS Award from the Association of Professional Engineers of Nova Scotia as the most likely to serve society in an ethical manner.

Peter Manuel
Vice-President, Chief Financial Officer & Corporate Secretary

Peter Manuel has been Vice President and Chief Financial Officer of Ucore for 12 years. 

Prior to joining the Company, he practiced as a Chartered Accountant for more than 17 years providing consulting services to companies in a range of sectors, with a focus on the financial services and resource sectors.

He spent 10 years in England and The Republic of Ireland providing assurance, strategic planning, corporate finance and other consulting services to a portfolio of both public and private entities including licensed banks, proprietary trading operations, and international corporate treasuries. Mr. Manuel holds a Bachelor of Commerce Degree from Dalhousie University.

Michael Schrider, MEng, P.E.
Vice-President & Chief Operating Officer

Since 1989, Mr. Schrider has been involved in manufacturing, engineering and managing complex structural and mechanical systems projects. He is a multidisciplinary engineer and business leader who has led Ucore’s project development efforts since joining the Company in 2016.

Mike was the founder, president and chief engineer of Schrider & Associates, Inc. (SAi) and Alton Bay Design, LLC (ABD), both engineering services firms, for over 17 years. Before that, he held various engineering and management roles in several North American shipyards and a synthetic lubricant manufacturing facility.

He received a Bachelor of Science in naval architecture and marine engineering from the University of New Orleans and is a registered Professional Engineer in the State of Louisiana. Mike also holds a Master of Engineering in mining, geological & geophysical engineering (mineral processing emphasis) from The University of Arizona.

Mark MacDonald
Vice-President of Investor Relations

Mr. MacDonald has over 25 years experience implementing award winning business development and marketing programs at a regional and national level.

As Vice President of Sales, Mr. MacDonald was responsible for Mediapro Communication’s growth as AT&T Canada’s leading Canadian Business to Business sales partner. Mr. MacDonald subsequently took over all responsibilities of the Atlantic Regional Vice President of AT&T Canada Corp. As VP of Operations for Premier Executive Suites Mr. MacDonald consolidated four business units into one regional operation that was awarded Atlantic Canada’s, “Best Places to Work” in 2009/10/11.

He holds a Bachelor of Commerce degree from Dalhousie University.

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[1] https://www.adamasintel.com/unfathomable-rare-earth-demand-growth/

[2] https://www.alaskajournal.com/2019-09-04/dunleavy-asks-federal-council-fast-track-southeast-rare-earths-prospect

[3] http://www.akleg.gov/basis/Bill/Text/28?Hsid=SB0099Z

[4] https://ucore.com/s/corporatepresentation.pdf

[5] https://www.forbes.com/sites/willyshih/2021/02/24/it-might-take-a-long-time-for-the-us-to-become-self-sufficient-in-rare-earth-materials/

[6] https://ucore.com/s/corporatepresentation.pdf

[7] https://d1qmdf3vop2l07.cloudfront.net/adroit-marten.cloudvent.net/hash-store/a806325fb68aa1e9bbcdc9e957484c62.pdf

[8] https://ucore.com/s/corporatepresentation.pdf

[9] https://ucore.com/s/corporatepresentation.pdf

[10] https://ucore.com/ucore-provides-update-on-rapidsx-technology-for-near-term-commercial-rare-earth-elements-separation-in-usa/

[11] https://www.newsfilecorp.com/release/57895/McKenzie-Transitions-to-Key-Strategic-Advisor-for-Ucore

[12] http://www.akleg.gov/basis/Bill/Text/28?Hsid=SB0099Z

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