Defense Metals (TSX-V: DEFN) CEO Craig Taylor on Oxides, Hydrometallurgical Optimization, and Rare Earth Independence from China

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Defense Metals, Mr. Craig Taylor. Craig, interesting times. How are you?

Craig Taylor: Very well, how are you? Yes. Exciting times.

Gerardo Del Real: I am well, thank you for asking. Let's get right into it. You had some company specific news that I want to get into here in just a second. But I would love to get your take on the advancement of what is clearly now becoming a critical metals supply chain race for independence, right? And so we're seeing a focus by governments around the world to establish a critical metals supply chain that is independent of China. And I think that the recent Fortress and MP Materials merger is a clear indication that this is likely a trend that will accelerate. That's my 2 cents. I would love to hear yours.

Craig Taylor: Yeah. That merger's going to be instrumental in providing extraction facilities in North America. And by that, I mean, Mountain Pass is going to be able to produce an oxide now. And we had some news today that is along the same lines, we have a 7% oxide that we've created. Theirs is a little higher, but with this merger, they're going to be able to produce down in California.

Gerardo Del Real: You did have some news today. You also had some news last week regarding the LIDAR survey. Can you speak to that a bit and kind of what the next steps are?

Craig Taylor: Yeah. There's a certain amount of environmental studies we have to do in order to get our mine permit. And so we've taken the long lead studies that we have to do. Those are usually a two year out campaign and we started on those, so we're about six months in there. So based on that, we should be able to apply for our mine permit within the next 18 months or so.

Gerardo Del Real: Walk me through the pre-pilot hydrometallurgical optimization. That headline was a mouthful, obviously this morning, but walk me through.

Craig Taylor: It's a mouthful. Yeah. So what we've done is we did our pilot plant flotation campaign with SGS and we had fantastic results. And so that's led us to do the hydromet now in a pilot plant after we finished this last bench scale test. So all of our bench scale tests in the hydromet side have been fantastic today. SGS is featured us at Com 2020, which was the metallurgical convention in Toronto. We'll finish this final test, which I'm anticipating will take two to three weeks, and that'll give us the green light to move forward with a hydromet pilot plant, which really hasn't been done in North America other than by Mountain Pass. So this will be a pilot plant of size. We'll take our 1200 kilos of concentrate, run it through the processing and come out with a NDPR oxide.

Gerardo Del Real: I imagine that with the momentum in the space that your phone has to be ringing, are you entertaining different options? Are opportunities presenting themselves that could help unlock some of the value here that you're trying to provide shareholders?

Craig Taylor: Well, definitely. I think you'll see with the Mountain Pass and Fortress merger, I mean, Mountain Pass is almost doubled in the last month in the share price. They're up 10% today. So of course that's generated interest in the space and with our low cap rate, people are phoning me nonstop.

Gerardo Del Real: Excellent, excellent. What's the balance sheet look like, Craig?

Craig Taylor: We probably have 600,000 hard dollars after some warrants were exercised recently, and approximately 300 to 400 soft that we'll be putting into our hydromet work, as well as more environmental.

Gerardo Del Real: You recently appointed Andrew Leland as a strategic advisor. Can you explain, for those not familiar with him, the value that he brings?

Craig Taylor: Yeah. Well, that's very interesting. China comes with their blacklist December 1st, and that's going to outline the companies that they will no longer be providing a rare-earth oxide to, or perhaps military components. And because Lockheed Martin was part of the group that sold missiles to Taiwan, I imagine they'll be on that blacklist. So Andrew Leland worked for them and will be helping us to try to get their attention in our deposit.

Gerardo Del Real: Well, a lot to like there. It's been a busy October, it's been a busy year, frankly, for Defense Metals. I'm looking forward to seeing you close out the year. Anything else you'd like to add to that, Craig?

Craig Taylor: No, we're just going to continue to de-risk and move this project forward like we've been doing. And we keep getting great results, so no stopping now.

Gerardo Del Real: Excellent. Thank you so much for the time. I appreciate it.

Craig Taylor: Okay. Bye-bye.

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