Medallion Resources (TSX-V: MDL) CEO Mark Saxon on the Medallion Monazite Process and Scalability

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Medallion Resources, Mr. Mark Saxon. Mark, how are you today?

Mark Saxon: Gerardo, good afternoon. Doing very well over here in Australia. And I hope you guys are doing fine in the US as well.

Gerardo Del Real: We are doing, that is for sure. It's been an interesting week, as I'm sure you've been able to observe from far, far away. It's probably better observed from far away than it is to experience here, but interesting times, nonetheless.

Mark Saxon: Absolutely. And I'm sure, looking backwards, it all works out fine, but a few lumpy weeks to get through, obviously.

Gerardo Del Real: Interesting times, for sure. You had some news on the assessment front. That of course is always a mouthful. Let me read the headline. “It reads Medallion Commences, Techno Economic Assessment Of Proprietary Rare Earth Element Extraction Process.”

A lot of very, very detailed information in the release. I would love for you to provide an overview. The last time you and I spoke, we talked a bit about how Medallion had identified the Gulf Coast here in the US, and I joked, of course, that Austin is becoming quite popular with the Teslas of the world, the Gigafactory, and the processing facility. And so, we are attracting a lot of business here. But this release kind of sets the table for the next steps. Can you give us an overview, Mark?

Mark Saxon: For sure, Gerardo, and I appreciate it. It's certainly a mouthful and I'll give you some of the reasoning behind that, I suppose. And so, Medallion is listed on the TSX, and also the OTCQB, where we trade as MLLOF. So, I'll keep an eye out for that one.

So, the press release describes a techno economic assessment, or study. The reason for using that language instead of the usual PAPFS feasibility study language that gets used in Canada is that the study doesn't connect to any individual resource. So, it's not about opening a mine. It's not about a single resource in a single location.

But this is about a study of an entire process that can be used in any location. And as we talked about last time, we've had a look at the Gulf Coast. It's a great place to roll out the first example of that process facility, but we're also looking at other places around the world.

So, it's about understanding the economics of a process. Think of it more as a very small chemical factory that's taking a rare earth mineral as a feed stock and putting out high value railroad products on the back end as the products. And so, yeah, it's a little different to the normal TSX story, where it's associated with mining. This one is a little bit unusual, and obviously it takes a bit of different branding and a wording to explain that properly.

Gerardo Del Real: Now, this is years in the making. I understand you've engaged an engineering consultancy firm?

Mark Saxon: That's correct. And so, what we're doing is a group out of Perth called Simulus. So, they're looking at all the technical data that we've developed over the last five years, and essentially bringing it down, as these studies do, into very hard numbers and very hard engineering and design. And so that will tell us the economics of the process we've developed in an external, standalone fashion. So obviously, we do that continually ourselves internally.

But the external control is important for us. It also will help us guide on the few little steps that we need to complete going forward and the places where we don't have enough information to sort of really understand the costs or the chemical requirements or the markets. And so, yeah, the same as a pre-feasibility study, for example. It tells you what you know, and it identifies what you don't know as you move forward.

But the process that we have developed, which is called the Medallion Monazite Process, I guess it captures what we're doing, is we take the mineral monazite and we process it into heavy, rare earth metals. So, it is materially complete. We understand most of the moving parts, I guess, in that process. And so, we're not many steps away from really achieving a process that can give rear end security for a very long time.

Gerardo Del Real: Now, this assessment specifically looks at the capital and operating cost estimates for an extraction facility. Is that right?

Mark Saxon: That's correct. And so the model here is for 7,000 tonnes per year of monazite. So monazite is a rare earth mineral. It's about 60 or 65% rare earths in that mineral. The monazite today that we'll be accepting is from mineral sand mining operations. Mineral sand mining operations, there's a few that operate in the US and many in Australia, many in South Africa, and other parts of Africa. They opened to produce zircon for zirconium, and ilmenite and rutile for titanium.

In all of those deposits, they also have, as a byproduct, mineral sand monazite. At the moment, either that is sold into the Chinese market, or it goes back into the pit and is not used. And so, our focus is to acquire that material and use it for our rare earth extraction. So, on the upstream side, we're considering where we received that monazite from, which we've engaged with Talaxis to do that for us, a very large trading company that's already trading in monazite. On the downstream side, where looking at separation partners and who we should spend most of our time working with, and who has the core technology that we need to add the next levels of value in the rear earth supply chain.

Gerardo Del Real: And are you looking to engage multiple partners, Mark? Or is this something where you're looking for a partner to do a thing in an area, just one place? Because I know in the past, we've talked about how transferable the technology is, right?

Mark Saxon: It is. We can see it as a process that we can lift up and put into many locations around the world. And I guess the technology is both transferable and scalable. So, the rare earth market outside of China at the moment is modest in size, but growing quickly. So, the process that we've developed is able to scale as the market grows. And so, we certainly see ourselves as having our first operation, say the Gulf Coast is a great location, maybe one in Australia, maybe one in Africa as well. It makes sense for us.

We've been looking at the next stage, which is the separation stage. We would like to have a process that can move with us to each of those locations, and to give the customers of rare earth metals a complete supply opportunity. We haven't yet picked a winner, I suppose, and who that should be. We've looked at, I think now, 20 different technology options and dropped those into different clusters of technology styles. We're looking more deeply at three or four of those now, to better understand how well they fit with our process and whether we should partner with them. And whether the business models between the two sides can work appropriately.

Gerardo Del Real: I see the assessment is scheduled to be completed in the first quarter of 2021. Are you hoping to have identified partner or partners by then? Or will you wait until you have the assessment in hand to make that decision or announcement?

Mark Saxon: Yeah, I think the timelines will be quite similar. At the moment, we're having very material discussions with, so those separation partners and really it's very deep technical considerations and for me as a geologist, I'm very happy to be drawing on very much smarter minds than myself to be understanding the technology, the technology readiness levels, the risks and rewards of each of those processes. So, I would say that delivering for us in January next year. So, similar timelines to the TEA.

Gerardo Del Real: Fantastic. Mark, anything else you'd like to add to that?

Mark Saxon: No, I think that's perfect. And please, if anyone is interested, get in touch with the company or myself, and we're very happy to talk about what we're doing. We're ticking boxes on many fronts at the moment. I think we've had as good a year as we had hoped for, with COVID aside, and moving the process along very well.

Gerardo Del Real: Agreed. And I encourage everyone to go to the website. That's A lot of really neat information on multiple, multiple subjects. So, Mark, thank you so much. Appreciate it.

Mark Saxon: Thanks, Gerardo. Keep well.