Mount Ridley Mines Limited (ASX:MRD) - A Consolidating Rare Earth Project in Western Australia.

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The Esperance region is fast developing into a Rare Earth Region and Episode 69 is with Guy Le Page, Non-Executive Director of Mount Ridley Mines Limited (ASX: MRD).

 

The Mount Ridley Story is all about clay hosted Rare Earth Elements (REE) deposits. The biggest question for all the clay REE projects relates to the timing to the unlocking of the metallurgical conundrum. It is not a big secret that there is a hurdle for these companies but is it a matter of time or market, that is the investors food for thought.

 

The Mount Ridely Story.

 

The clay hosted REE deposits that Mount Ridley has is located within a Fraser Range sub-basin, which is just 50km north of Esperance. Interestingly, it was initially acquired for its nickel and copper sulphides potential.

 

 

 

 

Figure 1: The Mount Ridley REE Project comprises 9 granted exploration licences in south-west Western Australia with an area of approximately 3,400 square kilometers. (Source: MRD Annoucnement, 14th February 2023).

 

Mount Ridley is one of many companies that are applying their trade in the Esperance region. hence, the MRD story is with good company.

 

 

 

 

Figure 2: The Mount Ridley REE Project is well positioned with similar projects which have been proven to be mineralised and have known resources. (Source: MRD Presentation, December 2022).

 

The Company also holds approximately 18% of the Weld Ranges in the mid-west of Western Australia. Areas of the tenements are prospective iron and gold.

 

 

Chapters

 

00:00 Start

00:20 Introduction

00:52 Update on the Mount Ridley Story

02:05 Mount Ridley Tenement Holdings.

02:42 Any update on the REE sector?

03:25 Is the recent Molybdenum price surge a sign of things to come for commodities?

04:13 Are we looking at a change in sensitivities with supply crunch and price volatility?

05:06 Apparent pricing volatility.

06:11 Upcoming news for Mount Ridley.

07:17 Why buy Mount Ridley?

08:41 Conclusion

 

 

The Sensitivity of Supply Deficit and Price Volatility.

 

In this episode of Rooster Talk, one of the topics that was discussed was the current observation that the supply crunch. This is an interesting topic as the supply crunch of metals have been talked about for nearly 8 years. I remember writing about this topic in 2019 (See below)and the crunch sort of never came.

 

Samso Insights:

Zinc Market- What happened to the price surge? - January 19, 2019

Is the Commodity Market just getting used to a slowing Chinese Panda ? - June 10, 2019

Is the Commodities Shortage a Mirage? - June 18, 2019

Shortages in Metals - March 14, 2020

The Mystical Journey of the Commodity Price - Will it Continue? - June 18, 2021

 

One of the most compelling crunch that never eventuate and still has not has been the zinc story. Nickel and Copper kind of came of late but that is still a wait and see game. The point is that in the previous narratives, the hype never eventuate.

 

The last six months have shown that this may finally be happening or is it? There was the nickel push and then there was the copper run recently. Uranium may be starting to lead or may lead be showing some sings of leading the pack. As guy Le page mentions in the Rooster Talk, the surge in buying by the Sprott Uranium Fund may have created a catalyst for commentators to feed on.

 

Why are we talking about this topic ? Well, the price of Molybdenum ran spectacularly in January 2023 and observers comment that this is due to China restarting production and closure of mines in Peru.

 

 

 

 

Figure 3: The price chart of Molybdenum. (Source: Trading Economics, 2023).

 

Hence, if this is the case a nearly 95% jump in price would make any punter wake up. A surge like that because of a mine closure of increasing production in China? On the REE front, according to Strategic Metals Invest (www.strategicmetalsinvest.com), since January 2020, Dysprosium has increased by up to 78.25%, Neodymium 226% and Praseodymium 169.20%

 

Samso's Conclusion

 

The clay hosted REE journey is one that is intriguing and poses a lot of questions for potential investors. When will the unlocking of the Holy Grail happen? Will there be a market when that happens? Will the technology using these metals still be around?

 

Well, in my humble opinion, having lived many decades in the wonderful world of ours, I think this is our time in seeing a pivoting of industries. The world of electrification is here to stay and the world of efficiency in creating cleaner energy has been set in concrete.

 

Although Rare Earths are not rare, the concentration of the resources and the application to downstream products are rare. The shift of dependence on one "nation" to produce products seems to be taking a back seat. The Esperance region is ideal for a new industry to emerge. It has all the important logistics like a Port and a low density of population. It has the space to grow in size.

 

The good thing for companies like MRD is that the resource is almost a certainty. They have many players who, as a whole, will be able to play with the big boys. The unlocking of the metallurgical question will be exciting times for all involved. What investors need is to be patient but this seems to be the biggest Archilles Heal.