Categories: Energy
Topics: General Energy

Medallion Resources (TSX-V: MDL) CEO Mark Saxon on Game-Changing Financing Led by a Strategic Partner & Rare-Earth Element Process Optimization Collaboration with Saskatchewan Research Council

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Medallion Resources (TSX-V: MDL)(OTC: MLLOF), Mr. Mark Saxon. Mark, how are you?

Mark Saxon: Very well, Gerardo. Good afternoon. Good to talk to you again.

Gerardo Del Real: It's been, I think, three weeks and it doesn't seem like it. You've been extremely busy. You added, I believe, approximately $1.6 million to the treasury. We're going to talk details, because who was involved in that private placement, that financing, is very important. It bodes well for current partnerships and partnerships moving forward. You also advanced the Rare-Earth Element Process Optimization with SRC. We'll talk about that, but first and foremost, how are things going? You hanging in there?

Mark Saxon: Yeah, interesting times. Obviously, I live in Victoria in Australia where we're having a bit of a rebound of COVID, but it's going okay. I think we're getting it under control and I think we'll be back living normal lives again quite soon.

Gerardo Del Real: Good to hear. There was an article earlier today that spoke to China's willingness to sell some US Treasury bonds into the market. It wasn't a large amount. The Treasury market here in the US is the most liquid in the world. It was something along the lines, I believe, of $200 million give or take. It wasn't a huge drop in the bucket, right? It wasn't anything consequential. But I thought it interesting, because I feel it's a hint of the potential for the weaponization of any situation where China feels it has leverage if the US continues the pose that it has decided to take. That being an aggressive posture, of course. 

Anyhow, without getting into the politics of it, I bring that up because rare earths, independent of the relationship between China and the US, I think countries all around the world are starting to realize no matter what happens, even if they become best friends tomorrow, there needs to be a more aggressive approach to critical metal supply chains that are independent of just one input. Can you speak to the advances that you've made here in the past month?

Mark Saxon: Yeah, certainly. I suppose there's some big issues in your discussion there and your question. What we really see in the rare earth market is the risk of a monopoly. It doesn't need to be China, US, Europe. It doesn't really matter. It's just where so much strength of something that is so critical is held within one set of hands. In this case, rare earths are very dominated by Chinese influence, including Chinese state-owned enterprises.

It means that there's always going to be a risk of supply not being available at the time when things are most critical. That's been a problem that we've seen reoccur and bounce back really over the last 10 to 15 years, since the last rare earth crisis came through. It's exactly the same problem. Until there's substantial investment in supply chains outside of China, just to give that supply chain diversity, we're not going to see a solution to the problem.

There's ways to do that. We can go and develop new hard rock deposits. I think we've seen the one that's been really successful outside of China is Lynas Corp. That's mining in Western Australia, processing in Malaysia. That's been a great success, but that's really been the only one that is the balance to the Chinese supply chain. Really what needs to happen is a lot more non-Chinese supply. 

The approach that Medallion has taken is not to open a new mine, but to use a byproduct material. That's a lot more nimble and flexible and able to move a lot more quickly and respond to demand. I think that's been our approach and we're getting great kudos in the market now.

Gerardo Del Real: I mentioned the private placement and the fact that the treasury now was topped off pretty well. I know for a fact that there was a lot of interest in that financing and you were able to take a lead investment from a very strategic and important partner in the space. Can you talk about that a bit?

Mark Saxon: Yeah, certainly. As you know, I've been in rare earths for a long time and I've just been in Medallion for about three months. This financing really is the one that feels like a game changer for the company. Medallion's always managed to stay financed, and get its work done and make good progress, but we've never really had a lot of cash in the bank in the company to be able to make longer term plans.

We completed a financing, which was $1.6 million. Prior to that, we completed one which was $250,000. The $1.6 million was at a 50% premium to the prior financing, which is great. The share price has responded well and traded well above the financing price and never really came back to the financing price. That was really showing that there was some great support out there. 

The lead order that was in that financing – well, there were two. One is from New York, an investment group called Amvest Capital. The other one is Talaxis Limited, which is a trading company based out of Singapore with global influence and trading materials all around the world.

Talaxis in particular is a partner to us now. They bring skills that very few companies have in the rare earth market, in the trading market. Talaxis does physical trading of many materials, including critical materials and the small market ones. They are traders of monazite. That's a very key part of our business. Now we're aligned with their story and our story, and able to understand where monazite is being traded and moved around the world. We'll be a customer for that monazite in the very near term.

Gerardo Del Real: The network that you now have access to as a result of this alignment, as you called it, is substantial. Can you describe that for folks that may not be familiar?

Mark Saxon: Yeah, the rare earth industry is a hard one. I guess that's the reason that there hasn't been that many success stories because the supply chain is so long and so complex to get a material that comes from a mine all the way through to, let's say, an EV or a magnet that goes into a telephone or a wind turbine. There's so many steps. It's very hard for any individual investor, or customer, to really work out where they fit and be able to sort of have confidence that they're really solving a problem, or they're really getting a sustainable product. 

By aligning with a group like Talaxis, their branding is they're supply chain managers. Talaxis bring together all the different parts of that supply chain and make sure that the material that goes in at one end is coming out to a partner at the other end and that all the steps are taken care of. That's something that for us, as a small company, we really are not able to get the connections that deeply across the market, whereas Talaxis that are a long-term player and a major player in the industry, they're absolutely able to see the industry from top, bottom and every side, and able to put Medallion together with the best partnerships and the best relationships. That's something that it would have taken us a decade to achieve without Talaxis. Now we're having daily conversations about our position in the supply chain, the suppliers to us, and the offtake partners that we'll be working with.

Gerardo Del Real: There's a clear trend in place. There's a need for what you're doing, Mark. You just raised some money. The raise again tops off the treasury really, really nicely. How do you plan on putting that to work? I know that you're busy, because you just announced that you had some work with the SRC. Can you speak to that work? Then walk me through what the rest of the year looks like? What can shareholders expect?

Mark Saxon: Yeah, most certainly, Gerardo. As you said, we've just started to work with the SRC, which is the Saskatchewan Research Council. The Saskatchewan Research Council is based in Saskatoon in Canada and has been a great research partner for us. They are the group that are doing most of our technology development in the processing of monazite. I guess there's a bit of a backup there. Monazite is a very rare earth rich mineral. The material that we use comes from mineral sands as a byproduct. 

We are extracting the rare earths from the monazite and the research of how to do that is done at the Saskatchewan Research Council. We have a flowsheet that is almost completed to understand how to do that. There's a few little places that we need to optimize and improve. Saskatchewan Research Council is doing that at the moment, as I was saying. They've been a great partner and we hope to see them as a partner in the future as well. We need to tick a few small boxes and we see that being complete within a month, six weeks, over that period. That then gives us all the information we need to do a technical and financial model of the process that we have developed. We'll deliver that late this year, we believe. 

Included in that will be ideas on where we're going to build our facility, where our raw materials will come from, who our customers will be, and where we do the separation. That will all be established in collaboration now with Talaxis. I think we're in a much better position to answer those questions. The next big step for us will be the Technical Economic study, TEA. The TEA will be beginning in the short term is all I can say at the moment. We're talking to partners now about who'll be executing that for us.

Gerardo Del Real: That's a lot of potential catalysts. You clearly have the market's attention. I think it's going to be an interesting close to the year, just speaking specifically to Medallion, not to say anything of the rest of the world and everything that's going on, Mark. It's been a thorough update. Is there anything else that you'd like to add?

Mark Saxon: No. I think we're in very exciting times, Gerardo. Medallion and other rare earth companies are getting a lot of attention at the moment, and for good reason. I think, as you say, we'll see that run through later in the year. Medallion's now trading very well and we're trading at long-term highs. We're very close to them with our share price and building a very good base at those levels. We're very happy. We're in a good position and we're looking forward to the rest of the year and traveling through into next year.

Gerardo Del Real: Excellent. Mark, thank you so much.

Mark Saxon: Thanks, Gerardo. Keep well.