Three Steps To Rare Earth Mining Success: Alex Knox

It's a complicated business, but Alex Knox has a simple recipe for successful rare earth mining. In this exclusive interview with The Critical Metals Report, Alex Knox of AWK Geological Consulting discusses some exciting projects with all the right ingredients, as well as a technique that makes processing both profitable and environmentally friendly.

The Critical Metals Report: Investors need to identify profitable projects in this space. What does it take to produce rare earth elements (REEs) at a healthy profit?

Alex Knox: Above all, a project needs a combination of high grades and high-value REEs, such as heavy rare earths (HREEs). High value-per-ton ore keeps a project cost competitive. As the market fluctuates and REEs go up and down in price, the low-cost producers will keep operating when rival companies may have trouble staying afloat.

Secondly, a low-cost method of extraction is important. If the REEs require a lot of chemicals or complicated processing, it just adds cost—not value.

The third ingredient is metallurgy, which has to be evaluated for each and every deposit. This requires skilled staff, both in exploration and in metallurgy, to find deposits and develop processes to extract them at the lowest possible price. Investors should ask questions: What is the technical team's expertise in REEs? Does the company have an REE advisory board?

Those are the three things that I would prioritize, in that order, for investors evaluating an REE company or project.

TCMR: Another cost dimension is environmental impact. A recent report from Jacob Securities put a $10 billion price tag on remediating damage to ionic clay deposits in southern China, which were heavily mined for REEs. Is it possible to develop REE deposits in an environmentally responsible manner?

AK: Of course. REEs are part of the green revolution. It's not only possible to develop deposits in an environmentally responsible way, it's the path that industry is taking.

TCMR: China's ionic clay deposits yield REEs at a remarkably low cost, which is how China became the world's source for REEs. Why is it so cheap to mine REEs from these deposits?

AK: First, they're mined by open-pit methods. Second, they're not very deep, so operators don't have to excavate at great depths. Third, they don't require blasting. They're just a pile of weathered clays. Fourth and most importantly, the REEs contained in the clays are easily removed from the clays and taken into solution, so the cost of metallurgical recovery is extremely low.

TCMR: Judging by the feasibility, prefeasibility and preliminary economic assessments (PEAs) conducted on North American REE deposits, could any of the projects even approach the low costs that China's mining industry thrived off of?

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AK: If China's government is successful in tightening regulations on its REE mining, then production costs there are going to go up. And there are North American projects on the horizon that can extract REEs even more cheaply than the ionic clay-based projects in China.

For example, Alex Knox has been involved in the mineral exploration industry since 1970. He served in the mineral exploration division at Unocal Canada Ltd., the exploration arm of Molycorp, where he was involved in the discovery of the Kipawa deposit in western Quebec. Knox has explored for uranium, gold, rare earths, niobium, diamonds, slate and limestone in Canada, the United States, Mongolia, Bolivia, Peru and Argentina. Highlights include Matamec's Kipawa deposit, Commerce Resources' Eldor and Blue River properties and Quantum Rare Minerals' Elk Creek deposit. Knox is on the REE Advisory Board of three publicly traded Canadian junior mineral exploration companies.

DISCLOSURE:
1) Brian Sylvester of The Critical Metals Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Critical Metals Report: Quest Rare Minerals Ltd., Matamec Explorations Inc., Tasman Metals Ltd. and Commerce Resources Corp. Streetwise Reports does not accept stock in exchange for services. Interviews are edited for clarity.

3) Alex Knox: I personally and/or my family and/or funds that I manage have a beneficial interest in the following companies mentioned in this interview: Commerce Resources Corp. and Matamec Explorations Inc. I personally and/or my family am paid by the following companies mentioned in this interview: I consult for Commerce Resources Corp. and Orbite Aluminae Inc. I was not paid by Streetwise Reports for participating in this interview.

Written By: The Gold Report