I had pleasure to host a conversation with Mickey Fulp, the Mercenary Geologist, and Don Lay, CEO of Medallion Resources. In the first part of our conversation here, Don provides in-depth background on the rare earths and Medallion’s business strategy. In the second part of our interview, below, we have a wide-ranging conversation about the rare earths and the future for Medallion. 

PB: Thanks for walking us through the background to the rare earths and what Medallion is all about, Don. To start things off for the second part of the interview, I would like to open it up for Mickey to ask some questions here. Mickey, is there anything you’d like to ask about?  

MF: Thanks, Peter. I’ve known about Medallion for a long time and I would like to ask about a few things that are ancient history now. Don, after you determined that your projects in Labrador and Manitoba were not going to work, you pursued a couple other ways to get into rare earths. One was a deal in India, which eventually did not work out because of the impossibility of dealing with the Indian bureaucracy. The other one, which I found to be very difficult to get substantive information about from you or Bill Bird at the time, was the idea of heavy rare earth clays in other parts of the world. I know you looked in Central America and the North side of the Amazon basin. Please can you fill me in on what happened there?

DL: Sure, Mickey. Let me give Peter a bit of background on the things you are asking about and then I will answer your questions. Peter, China has a number of areas where they mine and process rare earths. Northern China certainly has the largest volume of rare earths in an area called Bayan Obo, which is in Inner Mongolia. They have a whole city Bautau, which runs on the rare earth business. Interestingly, its core purpose is iron mining, not rare earths.

DL: As China industrialized in the 1980s, they ended up producing bastnäsite, which is the rare earth mineral – the same one as found at Mountain Pass. They were producing that as a byproduct and it allowed them to get into the rare earth business quickly, easily, and cheaply. Once again, note that byproducts loom large in the story there.

DL: China has a number of important rare earth mines and areas. Bautau is one and another is in the south, called the South China clays. The expression usually used to describe them is ionic clays, which are a weathered material that has leached out much of the other materials over the years, including the lighter rare earths. It is typically low grade, but high quality and easy to leach out the heavy rare earths from this ionic clay material. You need a particular climatic area to find this, as well as the right geology. China definitely has that, although it has been widely recognized and speculated that other tropical areas should have these same types of ionic clays and mining potential.

DL: People have long speculated about finding these types of deposits in Central America, South America, and Africa. Mickey, there was one such area that we did a fair bit of investigation on in the Miri Mountains on the border of Brazil and Guyana. Tony Mariano had done some work there for the UN years ago and it looked like quite an interesting potential area for ionic clays. Some grab samples had been tested and exploration geology had been done there.  

Photographed by Jeff Johnson. 

DL: We looked at acquiring that particular tract, but the access and infrastructure, as well as political challenges, were way beyond our capability at that point in time. At that point, we were also getting deeper down the monazite rabbit hole and decided that was the more intelligent route to take.  

DL: Mickey, that was the only area in the ionic clays that looked like it might be a viable deposit, at least in terms of geology. If it was beside a road and a railway, then it was the kind of thing we would have been all over. 

MF: Thanks, Don. Do you think that there are other parts of the world where these clays exist? And could they be mined economically in other parts of the world, or is all that unique to those areas in Southern China?

DL: Bill's view is that they are not unique to Southern China, geologically. The two biggest issues, given that we are talking about jungles, are political issues and costs associated with infrastructure. Also, there is a question as to whether you would even be allowed to use similar mining approaches as they use in China, which is economic because of the way they use the acids and low wages they pay. When you take those things away, it is not clear if it would be economic.

DL: There is a company in Chile that is backed by the state to do in situ leaching of rare earths. They are starting to produce sample quantities of concentrates for separation right now and some people I know are already dealing with them. They are not at scale yet, but they look like they are well on their way and are well-supported. As a potential rare earth concentrate supplier outside of China, I would say they are an emerging, potential producer.

MF: Where is this, Don?

PB: I found a link to it here and the project is named Biolantánidos. It is located south of Santiago. 

MF: That is far from the tropics.

DL: Yes, it is a different type of deposit. It is not a classic South China clays.

MF: It's not an ionic clay?

DL: No, I don't believe so. I think it is a saprolite, Mickey.

MF: Well, I don't know about that. Saprolites occur in tropical climates with wet/dry seasons, but southern Chile is a long way from any tropical climate.

PB: For what it's worth, I did an interview with Jack Lifton recently and he mentioned that ionic clays had actually been found in the Appalachian region of North America recently.

DL: Hmmm.

PB: I know! He said he didn't believe it but, apparently, there has been some research published that reports ionic clays in the overburden above coal deposits there. It's beyond me, but that is what he said.

MF: Well, I don't know about that but I find Jack delightful, myself. I have been on several speaking venues with him and he is the master of the one-liner.

DL: To his credit, Jack is someone who took a base of knowledge and used that to help explain a complicated area to many people during a period of time when not many people knew much about it. That is probably his biggest credit. There were other smart people working in the industry who could not be the public face for the understanding the industry. It is unfortunate that they were not able to share their expertise more broadly, but they either had to keep quiet or just toot their own horn.

PB: Interesting. I appreciate the insight into what has come before, guys. Thank you.

DL: You have to talk to a lot of smart people to get a sense for what is going on in the rare earths. You have to try to understand their individual slants, where they are coming from, and what they know. If you talk to enough smart people that are thoughtful about the industry, you can come away with a pretty well-rounded view of it but it takes a while to be in a position to do that. Mickey and I have been kicking around a while. We might not get everything right, but I think we are not going to get too much badly wrong.

PB: I was reading a free chapter from a report by Adamas Intelligence on their outlook for the rare earths and one comment jumped out at me. They wrote that Molycorp would be one of the more profitable rare earth companies in the world today, despite the low prices if they had not missed major milestones and had cost overruns.

PB: It may be easy enough to say that "if things didn't go wrong, then they would be good", but it was the first time I had heard anyone say that about Molycorp. The refrain seems to be "it didn't work and it wouldn't have worked". It was interesting to hear someone who is relatively plugged in to the market saying that it would have worked, even with today’s pricing.

DL: I am happy to give you a bit of my perspective on that, which is not dissimilar from Ryan Castilloux’s perspective at Adamas Intelligence. Partly because I knew a fair number of people inside Molycorp closely and they were smart people who knew what they were doing. Molycorp was probably victim to three things, if you will. When they decided to come back into production, they didn't plan to reactivate the 6-8,000 tonne plant at Mountain Pass. Instead, they decided to implement a brand new process flow sheet at 20,000 tonnes per year of rare earths. Not long after that, they decided to increase to 40,000 tonnes! This is in a total global market of 120,000 tonnes. 

PB: Yikes.

DL: That was a scale that had never been done before. It was, really, a huge scale. Processing rare earths is always complicated and this was a new process. That was one thing.

DL: Another thing about going large into the market and developing a new process means that everything takes longer than you think. Everything took longer and cost more money than they thought it could.

DL: The second thing which really hurt them was that the marketplace shifted from somewhat balanced across the rare earth elements to a market being mainly driven by the magnets elements, which are neodymium, praseodymium, terbium, and dysprosium. Mountain Pass has no terbium or dysprosium to speak of, and not very much neodymium and praseodymium, relatively speaking. They were weak on that, especially compared to Lynas. The combined grades for neodymium and praseodymium at Molycorp were approximately 10%, whereas Lynas has about 23%. Molycorp just didn’t have the right economic mix of rare-earths. It was not Molycorp’s fault, they just didn’t have the rare earths that were in demand. They had too much cerium and lanthanum, which nobody wanted -- especially the cerium.

DL: The third thing that really hurt Molycorp was the fact that they were located in California. There were huge cost burdens that they had no way to get around. They had to truck water back and forth from Nevada and jump through all sorts of hoops that none of their competition had to face. If they had been on the other side of the border in Nevada, which is mining-friendly, it would have been a lot easier. With those three things working against them, and a bear market, time eventually caught up with Molycorp and the upstream part of the company went out of business.

MF: I would agree with all those points and I would add two others. They were a victim of very bad timing. Just as they came on, rare earth prices were collapsing. Historically, the prices of cerium and lanthanum had been around $4/kg, I believe, but they had fallen to $2 by the time they got into production.

MF: The other thing they did was to build this giant new plant with a tremendous amount of debt. That came back to bite them. They couldn’t service the debt, which ultimately is what drove them to bankruptcy. Otherwise, I am very much in line with Don’s thoughts here.

PB: This question of debt ties into this phrase that I’ve seen you say, Don, in an interview with Caesars Report. You said that Medallion is able to pace its development, which intrigues me to no end. There’s a lot we could talk about there, in terms of how you’ve been pacing things and what the future looks like.

DL: Well, that ties in well with Molycorp. As Mickey said, Molycorp was able to get the support of Wall Street, which was enamored with rare earths in the day. Molycorp was a former producer and had a significant deposit of merit with many years of future production left. There were all kinds of good reasons for liking it and Wall Street got behind it in a big way. When they get excited about something they throw money at it. The public threw money into the markets and into the treasury. In hindsight, it would seem that they decided to double annual production to 40,000 tonnes of rare earths concentrate because they could, not because they should.

DL: As it takes 9 months for a woman to have a baby, it takes a certain number of years for projects to be done effectively. If you try to hurry them up, it doesn’t work out well. Throwing more money at it doesn’t necessarily make it go faster or more smoothly. In certain areas, such as metallurgical development, you can throw a lot of money and people at it, but some things just take time.

DL: It takes time to go through the different steps they need to do, because you can’t do step 3 until you do step 2, and you can’t do step 2 until you’ve done 1. The results of one go into the next one and that provides certain limitations on how quickly the work can be done. That should be common sense, but markets don’t always provide common sense.

DL: Our process at Medallion is a lot simpler than hard rock processing because we’re buying a material that’s already coming in at 50% or 60% grade rare earths. We can use existing, well-understood metallurgical techniques to process it.

DL: We’re just creating a concentrate product that we are going to sell to other people to separate. We’re an intermediary player -- we’re just doing the hydrometallurgy part.

DL: That said, there are still a lot of complications in what we are doing. We have to sort out transportation of radioactive material. That is not rocket science, but it is not trivial, either. You have to have the right licenses, approvals, drums for shipping material, trucks, and it has to be organized. You have to negotiate the agreements with the heavy sands producers, which is not trivial either because they want three things from us.

DL: The first and most important is that the monazite suppliers want to make sure the radionuclides are handled properly from cradle to grave. They don't want any liability, either legal or perceptual, attached to this radioactive material. There is a little bit of uranium and a fair bit of thorium in the monazite. They are very aware of that and their biggest concern is that must be well-managed.  

DL: The second-biggest concern for the monazite suppliers is whether it is actually worth their time and energy to upgrade the material for us. They have to get somebody involved in product management, shipping and handling, and all the rest of the things they have to do to get the product to us. They want to know that we will be around for 10 years to take the product off their hands and be a good customer.

DL: The third concern for the suppliers is to get a decent economic return for the material that we are buying from them. I say 'decent' because they don't necessarily want an unreasonable amount of money or a huge percentage of what the separated rare earths will ultimately sell for. It is a wholesale product and we will pay a wholesale price for it.

DL: There are some additional challenges around developing the right flow sheet for our process. That depends, somewhat, on their material but if we received 90% grade beach sand monazite from a standard heavy mineral sands mining operation, then we can process it with no problem. There are some nuances in the processing, particularly around the products and byproducts, but that in part depends on what the customer wants.

DL: Traditionally, rare earth concentrates are produced in a carbonate format but some of the newer separation companies are looking for other formats as inputs. We are looking into that. We are also looking at taking out the cerium, which can increase our selling price. We have to deplete the cerium and the bulk of that happens in the hydro-met step.

DL: Lastly, we want to make sure that we create something that is a high-value marketable product that is easy to transport. We really want to focus on the middle part of the value chain, not on the separation and creation of hundreds of different skews of rare earth oxides and chlorides. The three-9s, four-9s, and five-9s that different people create is an inventory and warehousing challenge that we are not really interested in doing. There may be good business in there, but I would rather scale-up the hydromet processing, import more monazite, process more monazite, and produce more rare earths. We want to be an intermediary processor.

DL: All of those customer relationships are being worked on. We are in talks with groups that want to purchase concentrates from us and we are working on those relationships, as well. There are lots of things to pull together and it's challenging. It's an execution story.

DL: Technically, we are not creating any new science to make this work but it is a complicated value chain and complicated business. We need a lot of different resources to get different pieces of it done. It takes a while to figure out who those people are and build all those relationships with suppliers and customers.

PB: Great, thanks Don. There is an analogy that geological exploration is like research where you face a series of unanswered questions and spend money to try to get definitive answers. I suspect that analogy is relevant to your situation at Medallion but, rather than drilling holes, it is about proving the process and the business development, upstream and downstream.

DL: In geological exploration, as Mickey well knows, the exploration geologist convinces everybody to spend $1M on drilling, comes back, and says "That was great, we learned a lot! Now we've got to spend $5M to learn even more."

MF: Yup!

DL: Fortunately, we don't have to put those kind of dollar figures into it.

DL: Jack Lifton, who understands the downstream aspects of the business, used to tell the junior miners to fly to Japan to figure out what the OEM parts makers needed as they were doing their exploration. But that is not really something they could do.  

DL: As Mickey knows, there were at least 10 juniors who were able to establish significant rare earths in the ground, but the metallurgy and the processing are still not clear. It is not clear if anyone would put $200M+ to develop one of these resources betting that there is a market at the back-end for whatever products they are creating.

DL: Many of the companies like Rare Element Resources or Tasman have put their high-quality projects on hold pending better market conditions. Other companies, like Ucore, have pivoted to be a technology play and are using Molecular Recognition Technology for rare earths and other metals, as well. As I look at many of these companies, Medallion is not really going to compete with them but we could be partners for certain things.

DL: We have open conversations with lots of these companies. Many of them look at what we are doing and have come to us, recently, and said “what you are doing makes a lot of sense”. Just as Mickey recognized years ago. Sometimes it takes people a while to figure it out.

MF: My claim to fame is that the four companies I covered and took positions in all ended up with AMEX listings. They are the only four that accomplished that from the junior space. As of today, they all are either busted back to the Venture Exchange or the OTC Pink Sheets. None of them trade for more than a few pennies.

MF: Tasman was merged into Leading Edge Materials, so it doesn't really exist as a company anymore. Avalon is now a lithium play, which it was before it was a rare earth play. It has gone back to a hard-rock lithium project in Ontario.

MF: I like to think back to what Dudley Kingsnorth, who is a rare earths metallurgical engineer out of Australia said during the height of all these stocks during PDAC in March, 2011. He said, "look at what has happened with the projects that have been around for a long time in Australia". I think Alkane Resources was one of them that has tried to crack the silicate minerals for rare earths for 20 years and still haven't accomplished it at commercial scale. Back in 2011, Dudley basically told us it would take 10-20 years to develop the metallurgy to crack these silicate-hosted heavy rare earth element deposits. Damned if he wasn't right.

DL: He was right, but all the people that were high on the stock prices and recent financings at the time, so they scoffed at Dudley's words of wisdom.

PB: Wow, I had not heard that before. I can't imagine how difficult it would be to make that call at that time. It would really test your mettle as an independent thinker.

PB: Going back to the pacing for Medallion, Don, I believe you said that “$2.5M would get us through a pilot plant and feasibility study, but if the money is not available right away then we can pace the development.” The financing in Q3 last year of $300,000 provided the $200,000 that had been earmarked prior to that as sufficient for the pilot plant testing, which fits nicely with going at a slow pace to minimize dilution. My sense is that you will face some lumpier expenditures as you move towards building the plant.

DL: The process-development work that we are doing now is well in hand. We have a very good handle on what it is going to cost throughout the whole process, at least for the Saskatchewan Research Council pilot plant work that will give us the data inputs for establishing production economics.

DL: I am working on getting some government support for some of the development work. If you are an explorer in Canada, then you can get flow-through financing. If you are an R&D company, then you can get federal IRAP or other funding. Even though we are not developing brand new metallurgy, what we are doing has some new properties to it and there are certainly tools and techniques we can use that are more modern and better in various ways that are valuable. There are a lot of good things to be gained.

DL: The fact is that this type of processing doesn't happen in many places around the world. It hasn't happened in North America for 80 years, so there is some valuable knowledge to create out of this. If we can get to the point where it creates a viable business, then there is a lot of value-add that can be done with rare earth processing in North America. However, it may take a while to convince people that it is a good use of funds.

DL: It takes some time for the monazite suppliers to come around to that since their business is in zircon and titanium, not rare earths. At most, rare earths could represent 1%-2% of revenues, but it would be gravy on top. Developing those relationships and getting them to provide samples to us is important so that we can test that material and make sure it works. We need to understand how much they are going to produce, when they are going to produce it, what it is going to look like, and how we are going to pay for it -- all of that takes some time because they are big companies and this isn't their main area of focus. They understand the value proposition, but it is never going to make or break their business. Time helps us there because the longer we are at this as a real player doing real things, the more credibility we gain.

DL: Many of these companies get phone calls from China every month asking if they can buy their monazite. Every time, they say "no, we will never sell our monazite into China." More than one of them has told me that and that is good to hear. They could make money selling it into China and it could be processed there, but once it goes into China they don't know what is going to happen with it and that makes them uncomfortable.

PB: Locating in Saskatchewan really fits well with that in terms of the established capacity for dealing with radioactive materials.

DL: Absolutely. When I talk with people about it, as soon as they understand Saskatchewan they say "Wow, that makes a lot of sense." The only concerns are if the economics are reasonable because you have to ship it there. Nobody worries that you may not have the reagents or the environmental oversight. Saskatchewan was ranked as one of the best mining jurisdictions in the world by the Fraser Institute recently, as well.

PB: Any comment on shipping the radioactive material, Don?

DL: The material has to be shipped in drums with cladding indicating that it is radioactive material. Class 7 is dangerous material, which could be biohazards, yellowcake, or monazite. There are 40 million shipments of that material every year. The monazite will have to be shipped in drums and in containers, if it is by sea. Depending on the jurisdiction, it can be shipped by road or rail. You must have a safety plan and the licenses to ship and receive it, depending on the State and/or Provincial and/or National regulations that you have to follow. It adds some cost versus bulk shipping, but it is nothing that people who specialize in hazardous shipping don't do every day of the week.

DL: We have established relationships with companies that do this kind of shipping. In particular, there are companies in Saskatchewan that do this with uranium yellowcake and other material all over the world. There are a lot of steps in the process, but it is really just a cost basis. It adds a bit more cost relative to shipping other materials, but keep in mind that this is high-value material. It is 50%-60% rare earths in those drums. In North America, especially, shipping is very affordable. We have one relatively expensive shipment to get the monazite, our rare earth ore, into Saskatchewan but thereafter, everything gets cheap. Shipping our concentrate output is very cheap as it can be shipped in super sacks.

PB: And that extra cost gives some peace of mind, I imagine.

DL: You either ship your chemicals to your monazite or your monazite to your chemicals. There are no chemicals on the beaches where these mineral sands separation plants run, so you would have to build a plant and ship the chemicals there to process the monazite at site. We are going to ship the pure monazite to place where they already have the chemicals, the people, the logistics, and everything else we need. And that place is a low-cost operating jurisdiction, too.

DL: Saskatchewan is not just open for mining, it is wide open for mineral processing. It wants to be the Province that processes all the minerals from the Northwest Territories, Nunavut, and Yukon. Brad Wall is recognized as a business-friendly Premier and their approach is “Ship it all down here by train and we will process it here where we have the capabilities.”

PB: They have been consistent in that regard. It seems to be a very stable place.

DL: They are down to earth prairie people. They know good jobs when they see them and are open to them.

PB: I wonder about the economics of monazite processing and the Chinese influence on the rare earths markets. If I was the Chinese government and I wanted to dis-incentivize additional sources of rare earths production around the world, then I would start by trying to get prices below some of the well-established sources of production, like monazite sands. Any comments there?

DL: People like to speculate that there are five people in Beijing that sit around having tea and making all the decisions about the industry, but the reality is that there are thousands of people in China in the rare earth business who make decisions, as well. I am not saying Beijing doesn't make decisions, but they don't make all the decisions.

DL: China is a great big country with lots of layers and politics at all its different levels. They cannot effect changes quite as quickly as you might think. When they made their changes around the production quotas, taxes, and having the State Owned Enterprises’ aggregate the rare earth business into six large corporations from a few hundred smaller operations over a period of time, they wanted an environmental cleanup.

DL: What is more important to China is not the rare earth business itself, but the downstream part of the rare earth business because so many rare earths go into modern products that China manufactures. Rare earths is a $4B/year business, but the Chinese manufacturing industry is maybe a trillion dollar business. Many of those products use the rare earths. They want to make sure that China has got product. That is one reason for having the SOEs aggregate and control the business. They also wanted to clean things up because people were getting upset with the pollution in China.

DL: As we saw in the boom, higher prices encourage the rest of the world to develop their own rare earths, which hasn't happened for 50 years. China wants the rest of the world to develop its own rare earth resources. Monazite is the easiest and most obvious way to do that, and that is why we are pursuing that path.

DL: We are supportive of the Chinese moves. They process monazite in China. They produce some internally, but they also import some through Southeast Asia. The bulk of the world's by-product monazite is not being processed today. It comes from beach sands and most of it goes back to the pit or is scattered to the beach. It is a great untapped resource. It is not going to get processed in France anymore. And Australia is not going to do it. With Lynas, Malaysia had trouble getting processing going. I think Saskatchewan is the best place in the world to do it right now that meets everyone's requirements. I'm not saying that every plant we build would be there, but that is likely where the first one should be.

MF: I would add something to allay some of your concerns about China, Peter. Six years ago, we thought that the western world was not going to have any supply of heavy rare earth elements for the foreseeable future. What we did not understand at the time, but which has become apparent since then is that the Chinese government has no ability to stop the smuggling of rare earths into Vietnam. They tried, but they could not do it. At this stage, we still do not have a supply of heavies or for that matter, any rare earths outside of China, other than Lynas. Yet, we also do not have any lack of heavies at this point, which is really because of smuggling.

PB: Interesting. Thank you, Mickey.

PB: Let me try to ask my question about China again differently. Do you think there was a time when monazite was not economic globally?

DL: Monazite processing has been happening in China for a long time. Remember when I mentioned earlier how the Chinese started to build out their rare earth industry in the 1980s with Bautau by-product bastnäsite from the iron mining? When that business grew, principally it was because lanthanum and cerium markets. The other rare earths were important, but not nearly as important at that time. When China came to dominate the market because of Bautau, in large part, prices went down and stayed down, mainly because of lax environmental rules, cheap labour, and cheap resources in China. Ultimately, that forced Molycorp to shut down in the early 2000s. Also, Rhône-Poulenc shut down its monazite processing in France in the early 1990s and moved most of its processing operations to China.

DL: After that, some monazite was making its way from Australia and other places into China, but there wasn't much of an industry. The big sellers that were happy to sell to Rhône-Poulenc weren't selling it into China. Now, the pricing is well below its peaks but is also well above the old levels and makes monazite processing cost-effective outside of China today.

DL: We can be cost effective processing monazite today, no problem, but there are not that many places to do it. You've got to figure out where to do it. Then, you've got to work with the suppliers because those are long-term relationships. And then you have to find the customer for the rare earths concentrate. I could sell it into China, but then I have to pay a VAT and work with Chinese businesses in their business culture. I am happy to do that and have done it before in another industry, but the rest of the world would like to see a rare earth value chain developed outside of China. If we can find people to separate and market rare earths outside of China, then everybody wins.

PB: I hear you mention the 10 year contracts with monazite suppliers; very substantial commitments.

DL: Yes. The prices will float with the marketplace, but everybody wants to make sure that everybody else is in business so that you can keep things flowing.

PB: Great, thanks Don. Your comment about “keeping things flowing” is very interesting, in terms of the macro issues at play here. For a long time, things stopped flowing outside of China in the rare earths market and getting it going again presents some unique challenges. To conclude, please can we briefly discuss the news from February?

DL: This year we are doing a number of stages of testing at the Saskatchewan Research Council and I expect that work will be ongoing throughout the year. Depending on capital availability, support from the government, and other developments, we will move more or less quickly towards a point where we have all of the numbers to complete a feasibility study on a commercial plant. We will also move forward on the customer side of things and the supplier side of things, which have to be tied together with the size of the plant and everything else.

PB: I wonder if you face a bit of a chicken-egg problem in terms of securing agreements with buyers or suppliers and the financing to build the plant.

DL: Interestingly enough, our customers face exactly the same issues. They want to know what kind of concentrate we can get them, when, what quality, what kind of processing agreement? I ask them if they have the customers to buy the separated oxides and they have some, but not all. Everybody seems to have these chicken-egg issues, which may have something to do with getting things flowing again, as we just discussed.

DL: Bottom line, I don't see a lot of people who are moving forward and likely to produce a concentrate in the timeframe that we are, economically. There are still people blowing smoke around, but I don't see much that looks very reasonable. I don't think Mickey does either.

PB: I think the way Mickey put it to me was that he "knows the specialty metals too well to get excited about them again."

DL: He knows how hard it is!

MF: Well, I knew how hard it was before getting into it. My learning curve was going through every element for my Kitco radio show over 3-4 years and that rammed it home for me. If you're not in and out of one of these bubbles quickly, then you need to stay out of it. Luckily, I got into the rare earth bubble quickly and got mostly out before it completely blew up.

MF: That said, I really had no idea how bad it was going to get. Here's an example for you: in 2014, I participated for the fourth time in a private placement with Tasman Metals. At that point, I thought Tasman was the only one that really had a chance with the heavy rare earth elements for a variety of reasons, mainly because it has a very good HREE deposit with infrastructure close by, including a REE separation plant that is 11 hours away by boat. Despite all of that, it has not worked out, mainly because of the timeline to solve metallurgy Tasman has since merged into Leading Edge Materials with work on its deposit continuing on a reduced basis.

PB: The classic image of a stock chart for a successful exploration company comes to mind with an initial rally off early success, then flat line while the work gets down, and followed by a hopeful trend upwards as the business becomes a real thing. That seems to be at play here with the survivors here. And a small group of survivors it is.

MF: I would have to say that the exploration phase of this rare earth boom -- the geologists did their job. They found and took to feasibility study many projects. The exploration success was phenomenal. They basically got killed by lack of infrastructure for some projects and metallurgy for all, just as Dudley warned us about in 2011.

PB: Makes me think of how important it is to have a head start on things.

DL: I get shown a lot of stuff in rare earths and there isn't anything else that makes sense at this point. Not saying it won't ever make sense.

PB: Great, thanks Don.

MF: Keep in mind, Peter, some of the best heavy rare earth deposits that we found in this last cycle may actually be mined sometime over the next 50 years.

PB: That's right, Mickey. The rocks aren't going anywhere, are they?

MF: Certainly not. Thanks for organizing this, Peter. It’s been good to hear some updates from Don. Best of luck in the future, Don.

DL: Thanks, Mickey. You, too. Thanks to you too, Peter.

PB: You’re welcome, Don. It's been a pleasure. Goodbye.

Note: Mickey Fulp of MercenaryGeologist.com is a shareholder of Medallion Resources Ltd and Leading Edge Materials Corp. Peter Bell is a shareholder in Medallion Resources Ltd and Ucore Rare Metals Inc.