Categories: Energy
Topics: General Energy

Medallion Resources (TSX-V: MDL) CEO Mark Saxon on Geopolitical Tensions & the Race to Establish Independent Rare Earth Supply Chains

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?

Mark Saxon: Gerardo, good afternoon. Great to talk to you and doing well here in Australia.

Gerardo Del Real: Glad to hear you're well, it's been a bit since we got an update from Medallion. You did hire, I believe the last time we spoke, you had hired a group for the monazite LCA model, a life cycle assessment to quantify the climate change and environmental impact. And I thought I'd reach out just to provide our audience an update on the company and how things are moving along. Obviously in the rare earth space, a lot of moving parts right now, we're seeing government coups happen over the weekend that may have a material impact on rare earth supply. I would love for you to comment on that, given your background in the space and then let's talk Medallion right afterwards.

Mark Saxon: Yeah, for sure. And as you say, it's an extremely busy time in the rare earth sector, and I guess there's two big drivers on that one and yeah, the first driver and probably the one that's going to sustain over the longer term is the shift to green energy. And so that's a massive move. And I think the inauguration of Joe Biden and some of the things he's done since he's come in with sort of, I guess, doubled down on that and show what's happening in the US. So green energy is a big part of it, but then I guess supply security is the other one then. Yeah, we saw that with what happened in Myanmar just probably 24 hours ago now. And really that shows just how, I guess, tenuous and fraught the rare earth supply chains really are. So rare earth themselves they are a fairly small market in the mining industry. So yeah, we're talking a few billion dollars worth of trade, so fairly small, but they kind of seed massive downstream supply chains. And so that's why they're so important.

So really you think of wind energy. You think of EVs, you think of robots, you think of drones, you think of military equipment, all of those are consuming rare earth magnets and metals. And that's really the place where governments and industry are concerned because they want to be producing those downstream products… rare earths, give or take, but they absolutely want to be involved within those downstream products. And without a secure supply of raw materials, including rare earths, then you really can't be involved in that business. And so that's really where the supply security angle comes from.

Gerardo Del Real: Medallion's specialty is its technology, which is mobile, can be scaled out. And because of its mobility can be multiplied in a variety of locations, obviously, right? Can you speak to what's going on with the company and where things are today and what you expect here moving forward in 2021, Mark?

Mark Saxon: Yeah, for sure. And really, I guess when you think about Medallion and when our key focus is the processing of what's called mineral sand monazite. So mineral sand mining is done many countries around the world, Australia, where I live is a very, very big hub of mineral sand mining, but you can think, yeah, Africa, a little bit in the US as well. So for mineral sand mining, they produce various products that are focused on zirconium and titanium markets. As a byproduct comes a mineral called monazite and monazite is a very rich rare earth mineral. So we're focused on finding the optimized process to extract rare earths from that mineral.

So we've been doing this for quite a long time and much longer than I've been with the company. And we have optimized the technology now that's gone into what we're calling a techno-economic study, which think about pre-feasibility, PFS, something like that.

So that's kind of what we're doing, which is pulling together all the financial information. At the same time and I guess part two to that story is we're looking at the lifecycle analysis, which is looking at the energy balance and really the chemical inputs and things for our process to know that we're producing a really, really green product. And that's very, very important now for customers and particularly in the EV industry. They want to know the carbon footprint of the materials that we supply them.

And I guess the third string to the bow at the moment is looking at separation technologies. So separation is the, I guess the final value add step in rare earths. And we've been looking at many, many options there and we're very close to now choosing and forming a longterm partnership with one of those, I think.

And that's the other string to the bow where we'll be adding some value in the coming years. And yeah, I think all those things are primed to deliver in weeks or months. And so we're getting very close to all of those stories .

Gerardo Del Real: When you say very close, are we talking months? Are we thinking weeks, Mark?

Mark Saxon: I guess, yeah. I'll say at the moment Q1 for all of those stories, but yeah, we're obviously pushing hard and trying to get those deals closed and get the information flow worked out to make sure we have everything perfect before we go to market. All the work is very well advanced is all I can say. And we don't have final information on our tables yet, but we're reading things on a daily basis.

Gerardo Del Real: Sounds like a busy Q1. Sounds like a busy year. Is there anything else that you'd like to add to that?

Mark Saxon: No, I guess last time we spoke Gerardo we talked about our siting study and really the siting study that we did on North America came up with, yeah, let's say, it's your backyard somewhere in Texas or, yeah, certainly on the Gulf coast as a place for us to site our first facility. But I guess now with the market running so strong, we're looking at other alternatives and like you said, our technology is transferable, so we can pick the best locations with the best economics and the lowest environmental footprints and site our material, our process there. So looking now at further afield, outside of North America, looking at other opportunities for sort of numbers two and three, as we grow the business.

Gerardo Del Real: I imagine you have options given the state of the world, and the state of the rare earth sector.

Mark Saxon: Yeah. It's as hot as it's ever been or at least for 10 years. And yeah, since I came across into the rare earth space. And so, it's really boiling along fast and obviously Australia looks very good and is a big producer of mineral sand monazite, but some other locations as well that look of interest.

Gerardo Del Real: Well, I know you and I were both a part of the last rare earth run that was extremely profitable for a lot of us. It was quick, it was volatile. It was a round trip ticket, unfortunately, right, for those that didn't sell. But this current cycle seems a lot more sustainable to me. And it appears there is a lot more capital behind establishing these independent, critical metal supply chains. Would you agree with that?

Mark Saxon: Yeah, absolutely. And I think last time we went through this, which was, I guess, 2010, 2011, there was really only one side of the coin in that case. And that was the supply security one and geopolitics were very important and that was really a China versus Japan, China versus the US story. This time, I think we're seeing much, much stronger pull through of demand from EV companies and from wind companies and from new technology companies. And I think that's providing the second side of the coin and that means that, we're not going to see the sharp peak. We're going to see a sustained growth and that will be great for Medallion and many similar companies.

Gerardo Del Real: Excellent. Mark, thank you for the update. Look forward to having you back.

Mark Saxon: Thanks, Gerardo. Keep well.

Gerardo Del Real: Appreciate it.