Categories: Base Metals / Energy
Topics: General Base Metals / General Energy

Monumental Minerals (TSX-V: MNRL)(OTCQB: MNMRF) CEO Dr. Jamil Sader on Maiden Drilling Program at Jemi Heavy Rare Earth Project & Lithium Exploration in Chile. Part 1 of 2

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Monumental Minerals, Dr. Jamil Sader. Jamil, how are you, sir?

Jamil Sader: I'm doing pretty well today. How are you doing, Gerardo?

Gerardo Del Real: I am well. It's been a relatively busy summer, a lot going on the macro side. A lot going on as it relates to companies specifically in the critical metals space right now. And so I thought it an opportune time to have you back on, it's been a bit since we chatted publicly, and I thought we'd have you back on and just get an update on your flagship project first off. And I wanted to talk rare earths for a bit, and then maybe we could talk Chile because I've had some reader questions about some of the macro commentary surrounding Chile and the what's been, I think inaccurately worded as the nationalization of the lithium space. And we'll get into that because I want to get your take on it. But let's start with Jemi, right? Let's talk about that project first. How are things coming along on that front?

Jamil Sader: Things are coming along excellent, Gerardo, thanks for asking. We put out a PR today, earlier today that we are ready to drill. We've got permits, we've got land access agreements, we've got drilling contracts in place, and drilling will start in the next couple weeks. They're going to be mobilizing, the drilling company will be mobilizing shortly. We are just in the process of now making some access roads and building the drilling pads. And we've got six high value targets chosen for a total of 1,800 meters, so about 300 meters a hole. And we're just looking to really, this is the maiden drill program for us, and we're just looking to define where these mineralized dikes and veins that we see at the surface where they're coming from.

Gerardo Del Real: Tell me about the infrastructure to the project. Obviously we're all hoping for a successful drilling program. I know that the surface work that has been done up until now to make sure that you're drilling out your best targets has been done the way it's supposed to have been done. What are you hoping for out of this program?

Jamil Sader: Well, what we really hope to get out of this is that we start to see a… We have models of this project and we believe that the model is similar to what we see at Norra Karr in Sweden, also a heavy rare earth dominant project, Tanbreez in Greenland and others globally. So what we really hope to get out of this is we hope to really define a system that we believe is similar to that. And we believe that this is a great area to be working in just because of its proximity to the Lone Star State, to Texas. Texas is this fast-growing hub for the rare earth industry. You have Blue Line Corp in Hondo or San Antonio, deals between MP materials and GM and Fort Worth, the Tesla factory in Austin. And also a very politically friendly source of rare earths. So all these things very much contribute to a what could be a very, very great deposit.

Gerardo Del Real: You mentioned Norra Karr. That's a project I'm very familiar with back in the days when it was under the company portfolio of Tasman Metals. I did very, very well with that project. That's a project that ran into some permitting issues that I think is a world-class, heavy rare earth asset. And so when we talk about heavy rare earths and we talk about the difference between the lights and the heavies, it really is two different markets. Can you talk about the main macro drivers for rare earths? And specifically I want to get into the heavies while, which is of course what you're exploring at your project.

Jamil Sader: Of course, yes. And I will say as well that Norra Karr is a wonderful project. I would love to see that move forward. And I really hope that they are able to make a go of it. But for our project, the heavies are a hundred percent controlled by China. Everything from shovel, so everything from mining it out of the ground all the way through to manufacturing of consumer products. These consumer products are mainly permanent magnets. The terbium and dysprosium are added to these magnets to increase operating temperatures, reduce the loss of magnetism. And if you really look at the heavy rare earths, so terbium, dysprosium, neodymium and praseodymium, those four make up 94% of the value of the rare earth market. So if you don't have those, then it's very hard to get a project across the line. And what makes Jemi really good is that, and kind of sets it apart from some of the other really good projects in North America, so perhaps Defense Metals Project in British Columbia or MP Materials in California is that there are normally are, and mainly lights. Ours includes lights and heavies.

Gerardo Del Real: So when we talk about the heavies, what are the main applications? And I think this part is really under-appreciated and this part is important for people, I think to really wrap their head around, because I have this theme this year, and I've been preaching it to subscribers, that it's great to invest in things that people want or speculate on things that people want, metals and minerals that people want. It's much different and much easier, more profitable by the way, to invest in minerals and metals that people absolutely need. And with the heavies, the heavies are much more of a need than a want when it comes to rare earths. Is that correct?

Jamil Sader: Absolutely. They are a necessity in motors that go into EVs. They're a necessity in motors that go into, could be water pumps, it could be air conditioners, it could be wind turbines. They're an absolute necessity. And like I said, that they do increase, adding these terbium, dysprosium to magnets increases the operating temperature of these motors. So as an example, Tesla will put in their all-wheel drive systems, they'll put light rare earth magnets into the front of the front motor, but in the rear motor they'll put heavy rare earth magnets so that they can operate properly at higher temperatures. So they are a need. They're not a want. And that's why they're on the US critical metals list.

Gerardo Del Real: You have the Jemi Project, you also have a lithium project in Chile. I can't let you go Jamil, without asking you about some of the comments from the Chilean President. He proposed a national lithium strategy and a national lithium mining company in April of this year. And of course, this is something, this is a model that's been done with other sectors. So we have kind of a blueprint on how this is typically rolled out. For whatever reason, the wording and the messaging from the administration wasn't, not only not the friendliest, it wasn't the clearest as to how they were planning on implementing the rollout and what companies would be most affected. So can you shed a little light and just provide us an overview of your take being that you're active in the region and then you have boots on the ground there?

Jamil Sader: Of course, and I 100% agree, it's been really unfortunate how poorly the government has explained this and really, if they had a PR firm that has been helping them out with this, they should be fired. So nothing has really changed. And like all metals in Chile as well as Canada, Australia, Mexico, among others, they're all owned by the state. And so if you want to mine them, you actually have to pay something to the state to extract them. So for lithium, lithium is slightly different in Chile because since 1979, it was considered nonconcessionable and it was because it got lumped in with uranium and thorium at the height of the Cold War, you needed a little bit of lithium into nuclear warheads. So what Boric and what the government is really interested in is they're interested in figuring out a way within the current structure of how they can also participate and also generate funding or money towards the public treasury.

And to give you an example, and what is the center around all this, their centerpiece, is Salar de Atacama where SQM and Albermarle operate, and they actually operate with leases. So they're actually leasing land or leasing concessions from a government group called CORFO. SQM's lease is up at the end of 2030, and Albermarle's up at the end of 2043. The government has said that they're not going to break those leases, but after those leases are done, just like any other business or any other leasing situation, the government has the right to change leasing terms and that's what they're doing. And so for those assets, they're saying that they want to take majority stake, which they have every right to because they own the land. But for the junior explorer-

Gerardo Del Real: There you go. That's exact. No, you took the question. You're answering the question I was going to say. That's all fine and dandy for the producing majors, but that the way I understand it anyhow, should not be affecting the juniors to the extent that it has in the market. Would you agree with that?

Jamil Sader: That's absolutely correct. So the government really isn't interested in the juniors and the projects that the juniors have are not considered strategic. So the government has said that they may want to buy into a project or they might issue a special permit in exchange for a royalty in order to get a project moving. But they do rely on our expertise because they don't have this expertise and they don't have the personnel or the resources to carry this all out. So when it comes to the national lithium strategy, there is no expropriation. There is no taking projects away, and there is no forced sale. And even if they wanted to do that, there're Chilean laws and international laws that prevent that. They want to work with companies so that they can get a piece of the pie.

Now, in a perfect world, I would like to see something a lot more simple. I would like to see a model where it's just simply a royalty structure. You produce X amount of lithium and you pay an X amount of royalties, the same thing that they do for copper. But that's not the way that the government has decided to do this and to work with this. And so we just have to work with what the government has provided and the framework the government has provided. But that being said, the way that the government has structured this is that there is lots of money for everyone to make here. They're not taking projects away. And there is many, many good projects, including our own, of course, that are excellent and there's a lot of opportunity.

Gerardo Del Real: Let's talk about what comes next here for Monumental. We've seen a pullback in the share price. You were able to secure financing with a strategic group of investors that clearly see the upside, and not just the sectors that you're involved in, but the projects and the management team that's advancing them. What comes next and where do you see Monumental Mineral share price here in the next six months?

Jamil Sader: Well, we've been beat up a fair amount by the recent news out of Chile. We are coming out of it. And what's really going to drive things is the drilling project that we have at Jemi in Mexico, as well as drilling at Laguna Blanca that we're working towards just getting the permits in place, the permissions in place, and just ticking all the boxes. So that's really going to move things. And right now we're starting to see a lot of buying of the stock, and that kind of demonstrates to us that investors are starting to become a little bit more comfortable with Chile. They realize that no one's taking our projects away and that we have very high merit and high value assets. And what I would say as well is that because of these raises, we have a very strong balance sheet. We don't actually have to go to the market again to raise money until mid to late 2024. And that really presents a buying opportunity. We have the cash, we have the projects, and we have the knowhow and the knowledge to carry these out.

Gerardo Del Real: Jamil, that was a thorough, thorough update. I appreciate the time. As always, appreciate your insights. I'm looking forward to having you back on. I think the second half of the year is going to be an exciting one in the commodity space, and I suspect you and I will be chatting on a more frequent basis.

Jamil Sader: Well, thank you very much, Gerardo. Really appreciate it as always.

Gerardo Del Real: All right, chat again soon.

Jamil Sader: Bye.