Could you introduce Ionic Rare Earths and your flagship Makuutu Rare Earth Project in Uganda?

After confirming Makuutu as a difficult-to-find ionic adsorption clay (IAC) deposit, we rushed to secure an interest in the project in 2019. We have since defined a very large mineralized system stretching 37 km long, end-to-end, and published a mineral resource estimate (MRE) for 532 million tonnes at 640 parts per million TREO, which covers only 26 km of that 37 km strike. With more exploration, there is significant potential to grow the resource, but at the current size, we can move forward to a staged approach to produce both magnet and heavy rare earths for several applications, including net zero technologies, defense, and communications. Currently, we are finalizing the mining license application and we plan to do a demonstration plant at Uganda in 2023 to de-risk the project before reaching a final investment decision. In 2023, we want to see product being produced at Makuutu.

What makes IAC deposits interesting?

Ionic adsorption clay (IAC) assets are very rare and most prevalent in China and Southeast Asia. This type of deposit has a lot of strategic value, derived from the composition of the basket of individual rare earth elements. Besides Makuutu in Uganda, other such deposits have been found in South America and Madagascar. Basically, IAC deposits have formed by granite outcroppings that have weathered, or broken down over time. The breakdown of primary rare earth minerals leads to the release of individual rare earth elements  into a long sedimentary basin full of aluminium silicates, where the rare earths bond chemically to the clay; the rare earth elements exist in a clay in a chemical form rather than a mineral form. The mineralization at Makuutu is very shallow, the clay zone being found anywhere between 8 to 30 meters thick, under an overburden of 3-5 meters. We have only drilled 711 holes across the 26 km corridor,  at an average hole depth of 18-19 meters. To extract the rare earths, we are washing the clay with a salt solution which leaves us with a leach liquor from which we precipitate mixed rare earth carbonate product,  free of radionuclides. The shallow, bulk mining and simple processing results in a low capital footprint, which allows us to start small at Makuutu, and scale up by adding more modules over time as demand grows and rare earth prices increase.

How is the company positioning in the global supply of rare earths?

Makuutu is a very strategic asset for Western governments, but currently, China is the only country with existing refining capabilities for a rare earth carbonate mix like Makuutu. We have been evaluating a value-addition step, looking at developing our own refining asset to separate the mixed rare earth carbonate into 15 individual rare earth oxides. Geopolitically, the appetite to develop a refinery and unlock the value of individual rare earths outside of China is very high, driven by Western governments ambitions with alternative, sustainable and traceable rare earth supply in the long-term.

The third facet of the company is magnet recycling: We can extract the individual rare earth elements from spent magnets and end of life material to effectively recover the magnet rare earths and refine it back to high-purity oxides. In this way, we can provide sustainable and traceable magnets and heavy rare earths to Western governments.

Can you familiarize our audience with Ionic Rare Earths’ shareholder structure and financials?

At the end of the September 2022 quarter, we had roughly A$23 million in the bank and our market capitalisation was approximately A$150 million. We trade on the ASX, with good liquidity, with about 3.9 billion shares on issue. As we started to take the story overseas, we are seeing a greater appetite for what we are doing from institutional investors in the US, Europe and the UK, especially since we produce a balanced basket of both light and heavy rare earths unlike many of our peers.

Ionic Rare Earths is one of the few mining companies in Uganda. What is the operational environment like in the country?

Our Makuutu project is in an extremely well-connected area with great infrastructure, which gives the project a great head-start to development. Just 65 km away from the site there is over 800 MW of hydroelectric power installed. Road and rail are within a 20 km range. At the moment, we have about 50 staff on the ground, and we enjoy a great relationship with the Directorate of Geological Survey and Mines, the main regulator in Uganda. Uganda has substantial mineral wealth, but it needs explorers and investment to define the scale of those mineral occurrences. When we started working at Makuutu, we knew we were looking at a large system, but we never thought it would so large. For those companies looking for hidden gems, they need to go to locations that have not been explored before.