Ways to Invest in Rare Earths

A brief look at the rare earth elements market and how to start investing in the sector. Read on to learn the basics.

The 17 rare earth elements (REEs) are as diverse as they are challenging to pronounce. The group is made up of 15 lanthanides, plus yttrium and scandium, and each has different applications, pricing and supply and demand dynamics.

Sound complicated? While the REE space is undeniably complex, many investors find it compelling and are interested in finding ways to get a foot in the door.

Read on for a more in-depth look at the rare earth metals market and the many different types of rare earths, plus a brief explanation of how to start investing in this arena.

Ways to invest in rare earths: Types of rare earths

There are a number of ways to categorize and better understand REEs. For example, rare earths are often divided into “heavy” and “light” categories based on their atomic weight. Heavy rare earths are generally more sought after, but light REEs can, of course, be important too.

Rare earths can also be grouped together according to how they are used. Rare earth magnets include praseodymium, neodymium, samarium and dysprosium, while phosphor rare earths — those used in lighting — include europium, terbium and yttrium. Cerium, lanthanum and gadolinium are sometimes included in the phosphor category as well.

You can click here to learn more about heavy and light rare earths, and here for more information about the different uses of rare earths.

One thing that is common to all the rare earths is that price information is not readily available — like other critical metals, rare earth materials are not traded on a public exchange. That said, some research firms do make pricing details available on occasion, sometimes for a fee.

Ways to invest in rare earths: Supply and demand

As mentioned, each REE has different pricing and supply and demand dynamics. However, there are definitely overarching supply and demand trends in the sector.

Perhaps most notably, China accounts for the vast majority of the world’s rare earth element supply. As the world’s leading producer, China accounted for 140,000 metric tons (MT) of produced rare earths in 2020, with the US coming in a very distant second at 38,000 MT.

The strong Chinese monopoly on rare earths production has created problems in the rare earth metals market in the past. For instance, rare earths prices in the global market spiked in 2010 and 2011 when the country imposed export quotas.

The move sparked a boom in global rare earth metals exploration outside of China, but many companies that entered the space at that time fell off the radar when rare earths prices eventually fell again.

Molycorp, once North America’s only producer of rare earths, is one notable failure in the drive to produce the metals outside of China. It filed for bankruptcy in 2015.

But the story didn’t end there — MP Materials (NYSE:MP), the company that now owns Molycorp’s assets, went public in mid-2020 in a US$1.47 billion deal, and a year later was a US$6 billion company.

MP Materials is now the largest producer of rare earths in the western hemisphere, and by 2022 it intends to produce: high-purity separated neodymium and praseodymium oxide; a heavy rare earths concentrate; and lanthanum and cerium oxides and carbonates.

For its part, China no longer has REE export quotas in place. In 2014, the World Trade Organization ruled against them, and China removed the restrictions in 2015. Concern about China’s dominance resurfaced in 2019 and are ongoing as the US/China trade war continues unabated.

Outside of China, one of the world’s leading rare earth producers is Australian company Lynas (ASX:LYC,OTC Pink:LYSCF). The company mines for rare earth metals and then sends the raw materials for refining and processing at its plant in Malaysia.

Looking at the demand side, many analysts believe the need for rare earths will boom from 2021 onwards as growth rates for top end-use categories accelerate, including from the electric vehicle market and other high-tech applications.

As an example, demand for dysprosium, a key material in steel manufacturing and the production of lasers, has grown as countries increase their steel standards. Aside from that, rare earth raw materials have long been used in televisions and rechargeable batteries, two industries that accounted for much of the rare earth market share before the proliferation of new technology.

Other rare earth metals are used in wind turbines, aluminum production, catalytic converters and many of the high-tech products used every day.

Securing rare earth supply is an increasingly important issue. In addition to traditional rare earth mining, there has been growth in the rare earth recycling industry, which aims to recover REE raw materials from electronics and high-tech products in order to reuse them in new ways.

Exploring and extracting rare earth materials from deep-sea mud is one of the newest recovery methods and is gaining traction as more mining companies look offshore for resources.

Ways to invest in rare earths: How to invest

The possibility of higher rare earths prices in the coming years has been one of the catalysts for investors wondering how they can invest in rare earth materials. Unfortunately, those looking for exposure to the rare earth metals market do not have many options — buying physical rare earths is not possible, and few exchange-traded funds offer exposure to the metals.

For that reason, the most strategic and direct way to invest in the rare earths industry is through mining and exploration companies. While many such companies are located in China and are not publicly traded, there are still some that are accessible. Below is a selection of rare earths-focused companies trading on the TSXV, TSX and ASX; all had market caps of over $50 million as of July 21, 2021.

  • Alkane Resources (ASX:ALK,OTCQX:ALKEF)
  • Greenland Minerals and Energy (ASX:GGG,OTC Pink:GDLNF)
  • Hastings Technology Metals (ASX:HAS)
  • Mkango Resources (TSXV:MKA)
  • Namibia Critical Metals (TSXV:NMI)
  • Neo Performance Materials (TSX:NEO)
  • Search Minerals (TSXV:SMY,OTCQB:SHCMF)

Some small-cap REE companies are also listed on those exchanges. Here’s a list of rare earth companies listed on the TSXV, TSX and ASX that had market caps of less than $50 million as of July 21, 2021:

If we missed a rare earths company that meets the above criteria, please let us know in the comments.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Gambier Gold, Medallion Resources and Marvel Discovery are clients of the Investing News Network. This article is not paid-for content.

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This press release is issued pursuant to Multilateral Instrument 62-104 - Take-Over Bids and Issuer Bids and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.This release is being made by Randy Johnson to report information concerning holdings of Mr. Johnson and Orca Holdings, LLC in Ucore Rare Metals Inc. . Orca Holdings, LLC is wholly-owned by Mr. ...

This press release is issued pursuant to Multilateral Instrument 62-104 - Take-Over Bids and Issuer Bids and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

This release is being made by Randy Johnson to report information concerning holdings of Mr. Johnson and Orca Holdings, LLC (collectively, the "Acquiror") in Ucore Rare Metals Inc. (the "Issuer" or "Ucore"). Orca Holdings, LLC is wholly-owned by Mr. Johnson, serving as a holding company for Mr. Johnson's securities holdings. Mr. Johnson has been a director of Ucore since October 6, 2020.

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Ucore Rare Metals Inc. is pleased to announce that it has renegotiated the terms of its long-term debt owing to Orca Holdings, LLC and that Orca has agreed to extend the maturity date of the Loan for 24 months to November 30, 2023. In consideration of the Loan extension and subject to the approval of the TSX Venture Exchange, one million warrants will be issued to Orca. Each Warrant will entitle Orca to acquire one ...

Ucore Rare Metals Inc. (TSXV: UCU) (OTCQX: UURAF) ("Ucore" or the "Company") is pleased to announce that it has renegotiated the terms of its long-term debt (the "Loan") owing to Orca Holdings, LLC ("Orca") and that Orca has agreed to extend the maturity date of the Loan for 24 months to November 30, 2023. In consideration of the Loan extension and subject to the approval of the TSX Venture Exchange, one million warrants ("Warrants") will be issued to Orca. Each Warrant will entitle Orca to acquire one common share of the Company at an exercise price of CAD$1.20 during a term ending on November 30, 2023. On November 30, 2021, 500,000 earlier-issued warrants held by Orca and related to the Loan, expired.

The remaining terms of the Loan and the principal balance outstanding of USD$964,927.81 remain unchanged. The Loan is secured and it bears interest at 9%.

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Ucore conducted Bokan field mapping work in September 2021Ucore to conduct the Bokan channel and bulk sampling program during the Summer 2022 field seasonAll required state and federal permits are now in hand for the Summer 2022 field seasonUcore Rare Metals Inc. is pleased to announce that on November 10, 2021, the United States Department of Agriculture's Forest Service issued a 1-year authorization for Ucore to ...
  • Ucore conducted Bokan field mapping work in September 2021
  • Ucore to conduct the Bokan channel and bulk sampling program during the Summer 2022 field season
  • All required state and federal permits are now in hand for the Summer 2022 field season

Ucore Rare Metals Inc. (TSXV: UCU) (OTCQX: UURAF) ("Ucore" or the "Company") is pleased to announce that on November 10, 2021, the United States Department of Agriculture's Forest Service (the "USFS") issued a 1-year authorization for Ucore to commence with the Dotson Ridge 2021 Surface Exploration Project Plan of Operations (the "Project"). The Company has elected to conduct the sampling work during next summer's field season and now has all required state and federal Project permits for this work.

On May 12, 2021, Ucore announced the Project to upgrade its Bokan-Dotson Ridge heavy rare earth element ("HREE") mineral resource, disclosed in accordance with National Instrument 43-101 ("NI 43-101"), with a budget of approximately $400,000. The Project is expected to result in converting approximately 17-20% of the mineral resource to a new Measured mineral resource category; with over 90% of the new Measured material being drawn from currently Indicated mineral resource material and 10% from currently Inferred mineral resource material. This will be accomplished through the execution of approximately 50 additional channel samplings along the ≈2 km of exposed vein outcroppings of the Dotson Ridge Zone. Secondly, the Company will conduct bulk sampling activities to obtain ≈50 tonnes of additional mineralized material to facilitate prospective pilot-scale testing of its metallurgical recovery methods currently under laboratory-scale finalization at SGS Canada's Lakefield facility.

In September 2021, Ucore's COO, Mike Schrider, and Aurora Geosciences' General Manager, Alaska, Jim Robinson, P.Geo., conducted field mapping work to physically identify the two bulk sample areas and to coordinate next summer's field activities. Both of these activities are to ready the Company to conduct a Pre-Feasibility Study ("PFS") and/or a Feasibility Study ("FS") in the near future as the REO market continues to indicate a steady increase in response to the advent of the global adoption of electric vehicles ("EVs").

The Bokan Mountain Complex has approximately nine different historical REE mineralization zones[i] but only one of these, the Bokan-Dotson Ridge Zone, has been the focus of Ucore's rare earth mineral resource development. The Bokan-Dotson Ridge mineral resource remains open down-dip and along strike. After the Summer 2022 fieldwork is completed, the Company intends to conduct any additional exploration activities concurrently with prospective mine development activities.

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Figure 1- Bulk Sampling Marking of REE Vein Outcroppings at Bokan-Dotson Ridge, September 22, 2021

To view an enhanced version of Figure 1, please visit:
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"The long-term development of Bokan is a fundamental tenet of our Alaska 2023 Plan, and Ucore is committed to the establishment of a heavy rare earth element mineral reserve and eventual mine at the Bokan-Dotson Ridge project," said Ucore VP & COO, Mike Schrider, P.E. "While we have the long-term development of the Bokan Mountain Complex in our sights, we are also committed to the near-term development of a comprehensive US-centric rare earth element supply chain. In our view, this starts with the development of the environmentally sound and technologically efficient Alaska Strategic Metals Complex ["SMC"] rare earth processing facility based on RapidSX™ separation technology. And the concurrent development of the accompanying infrastructure required to support the upstream and downstream elements of this emerging supply chain through the association of key industry suppliers, partners, and customers."

The advancements at Bokan are just one of many steps in the development of the ALASKA2023 Plan that Ucore is currently progressing, including:

  • Through its wholly owned subsidiary Innovation Metals Corp. ("IMC"), commercial demonstration and deployment of the RapidSX™ separation technology platform
  • Securing third-party allied-sourced feedstock for the Alaska SMC (see Ucore's October 19, 2021, news release regarding the MOU with Vital Metals)
  • Engineering planning for the Alaska SMC REE separation & purification plant founded on modern RapidSX™ technology
  • Securing offtake agreements for the sale of rare earth oxides
  • Forming strategic alliances for the production of rare earth metals and oxides
  • Working with prospective partners for various sources of project funding:
  • Engineering and testing for the Bokan-Dotson Ridge Zone mill flowsheet
  • Community and stakeholder engagement to ensure prudent environmental, social and corporate governance ("ESG") activities

###

About Ucore Rare Metals Inc.

Ucore is focused on rare- and critical-metals resources, extraction, beneficiation, and separation technologies with the potential for production, growth, and scalability. Ucore has a 100% ownership stake in the Bokan-Dotson Ridge Rare Earth Element Project in Southeast Alaska, USA. Ucore's vision and plan is to become a leading advanced technology company, providing best-in-class metal separation products and services to the mining and mineral extraction industry.

Through strategic partnerships, Ucore's vision includes disrupting the People's Republic of China's ("PRC") control of the US REE supply chain through the development of a heavy rare-earth processing facility - the Alaska Strategic Metals Complex in Southeast Alaska and the long-term development of Ucore's heavy rare earth element mineral resource property located at Bokan Mountain on Prince of Wales Island, Alaska.

Ucore is listed on the TSXV under the trading symbol "UCU" and in the United States on the OTC Markets' OTCQX® Best Market under the ticker symbol "UURAF".

For further information, please visit www.ucore.com.

Qualified Person

Ronald James (Jim) Robinson, B.Sc., P.Geo., an independent geologist and General Manager of Aurora Geosciences (Alaska) Ltd. of Juneau, Alaska, has prepared the technical data provided in this news release and is the qualified person responsible for its accuracy.

Forward-Looking Statements

This press release includes certain statements that may be deemed "forward-looking statements" regarding, among other things, the Company's ALASKA2023 Business Plan as well as the upcoming prospective financing activities involving the Company and AIDEA. All statements in this release (other than statements of historical facts) that address future business development, technological development and/or acquisition activities (including any related required financings), timelines, litigation outcomes, events, or developments that the Company expects, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance or results and actual results or developments may differ materially from those in forward-looking statements. In regard to the disclosure in the "About Ucore Rare Metals Inc." section above, the Company has assumed that it will be able to procure or retain additional partners and/or suppliers, in addition to IMC, as suppliers for Ucore's expected future Alaska Strategic Metals Complex ("Alaska SMC"). Ucore has also assumed that sufficient external funding will be found to prepare a new National Instrument 43-101 ("NI 43-101") technical report that demonstrates that the Bokan Mountain Rare Earth Elements project ("Bokan") is feasible and economically viable for the production of both REE and co-product metals and the then prevailing market prices based upon assumed customer off-take agreements. Ucore has also assumed that sufficient external funding will be secured to develop the specific engineering plans for the Alaska SMC and its construction. Factors that could cause actual results to differ materially from those in forward-looking statements include, without limitation: Innovation Metals Corp. ("IMC") failing to protect its intellectual property rights in RapidSX™; RapidSX failing to demonstrate commercial viability in large commercial-scale applications; Ucore not being able to procure additional key partners or suppliers for the Alaska SMC; Ucore not being able to raise sufficient funds to fund the specific design and construction of the Alaska SMC and/or the continued development of RapidSX; adverse capital-market conditions; unexpected due-diligence findings; the emergence of alternative superior metallurgy and metal-separation technologies; the inability of Ucore and/or IMC to retain its key staff members; a change in the legislation in Alaska and/or in the support expressed by the Alaska Industrial Development and Export Authority ("AIDEA") regarding the development of Bokan and/or the Alaska SMC; the availability and procurement of any required interim and/or long-term financing that may be required; and general economic, market or business conditions.

Neither the TSXV nor its Regulation Services Provider (as that term is defined by the TSXV) accepts responsibility for the adequacy or accuracy of this release.

CONTACT

Mark MacDonald
Vice President, Investor Relations
Ucore Rare Metals Inc.
902.482.5214
mark@ucore.com

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