{"id":99136,"date":"2016-12-05T11:08:31","date_gmt":"2016-12-05T16:08:31","guid":{"rendered":"http:\/\/countingpips.com\/?p=99136"},"modified":"2016-12-05T11:08:31","modified_gmt":"2016-12-05T16:08:31","slug":"ucore-rare-metals-able-to-produce-critical-metals-ree-in-the-us","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/12\/ucore-rare-metals-able-to-produce-critical-metals-ree-in-the-us\/","title":{"rendered":"Ucore Rare Metals, Able to Produce Critical Metals & REE in the US"},"content":{"rendered":"
December 5, 2016<\/div>
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By<\/strong>\u00a0Peter Epstein, CFA, MBA<\/a>\u00a0 \u00a0\u00a0epstein.peter4@gmail.com<\/a>\u00a0\u00a0 \u00a0http:\/\/EpsteinResearch.com<\/a>\u00a0\u00a0 \u00a0<\/b><\/span><\/div>\n<\/header>\n
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Ucore Rare Metals\u00a0[TSX-V: UCU] \/ [OTC: UURAF]\u00a0continues to make confident strides in the commercialization of its\u00a0Molecular Recognition Technology (\u201cMRT\u201d)\u00a0platform, contained in an enterprise to be co-owned between Ucore and\u00a0IBC Advanced Technologies, Inc.\u00a0 Key to the enterprise is that it has\u00a0exclusive rights to deploy the entire SuperLig\u00ae\/MRT catalogue of metals separation products to monetize tailings applications anywhere in the world, in addition to mining and recycling applications in the REE and PGM sectors.<\/p>\n

With over 60 SuperLig\u00ae products\u00a0already developed\u00a0for a wide range of metals, the opportunity is a large one, and Ucore is pursuing a technology licensing plan to get MRT in to the maximum number of applications.\u00a0 Diverse applications include inserting MRT directly into operating facilities (and\/or bolting\u00a0MRT onto the back-end waste handling function<\/em>)<\/em>, recycling, remediation and, \u201curban mining,\u201d which entails separating high-value\u00a0metals (\u201cHVMs\u201d) such as Heavy REEs, PGMs, lithium, cobalt and tungsten.<\/p>\n

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There are a handful of mission critical REE, green energy & high-tech metals that could become difficult to reliably secure under certain adverse circumstances.\u00a0 Some examples from my review of various (mostly government agency<\/em>) reports, the REEs dysprosium, yttrium, erbium, europium, terbium pop up a lot.\u00a0 Oil was of crucial importance in last century\u2019s wars, will electric battery components and REE be this century\u2019s show stoppers?\u00a0 It\u2019s no secret that in addition to an insatiable need for various REE, the U.S. Department of Defense (\u201cDOD\u201d) is front and center in the analysis and adoption of EVs for military, national defense, homeland security & communications activities.<\/p>\n

In addition to its broader vision to license MRT technology in to multiple metals sectors, Ucore has a near term agenda focused on accessing some of the highest demand HVMs in the U.S.\u00a0 On November 15th, the Company announced it has engaged in planning & development of a Strategic Metals Complex (\u201cSMC\u201d), capitalizing on the MRT platform developed for the recently completed SuperLig One pilot plant in Salt Lake City.\u00a0 The SMC will be a commercial production plant designed to separate feedstock containing critical rare earth elements \/metals (\u201cREE\u201d) (e.g., dysprosium, neodymium, terbium<\/em>), and PGMs\u00a0(rhodium, palladium & platinum<\/em>).<\/p>\n

This is proof that Ucore is ready to roll, detailed engineering work is well underway.\u00a0\u00a0Initial feedstock is expected to be sourced from, \u201crecycling, swarf and tailings-generation partners in the automotive and REE permanent magnet industries.<\/em>\u201d \u00a0Ucore technology partner IBC has extensive experience in this area, for instance in PGM applications used successfully by operators such as\u00a0Impala Platinum\u00a0in South Africa. The potential economics for MRT plant placements are impressive.\u00a0 Based on my experience with similar licensing platform agreements, annual\u00a0royalty fees\u00a0of between 2% and 5% are fairly common.\u00a0 That, and an upfront licensing fee, plant design & maintenance fees, and recurring revenue from the sale of proprietary materials and services.\u00a0 In my opinion, mandates with large companies like\u00a0Teck Resources (NYSE: TCK)\u00a0could easily have Net Present Values in the tens of millions of dollars.<\/p>\n

President\/CEO & Director Jim McKenzie commented,<\/p>

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\u201cOur pilot facility provides a blueprint for construction of a new generation of SuperLig\u00ae separation facilities to add to already-existing MRT installations around the globe.\u00a0 This Strategic Metals Complex represents not just a transition by Ucore towards near-term production and revenue, it represents a reaction to a very real domestic need for high-purity energy metals.\u00a0 In turn, the SMC represents a significant progression for Ucore, capitalizing on the innovative design of SuperLig\u00ae-One, and leveraging this platform in to full scale production.\u201d<\/em><\/p>\n

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My interest in Ucore is reinvigorated.\u00a0 Simply stated,\u00a0MRT is faster, less energy intensive, generates fewer emissions and waste, does not use solvents or toxic chemicals, has a smaller surface and environmental footprint, requires less cap-ex and will enjoy lower op-ex<\/u>.\u00a0 Now here\u2019s where things get more interesting.\u00a0 While an important theme underpinning Ucore remains the same, I believe it takes on new urgency with the election of\u00a0Donald Trump.\u00a0 That theme being\u2013\u00a0Security of Supply\u00a0of indispensable REE and critical green energy \/ high-tech metals.\u00a0 Few may realize that China not only controls, but completely dominates, the global supply of rare earth oxides, includes mining, processing & refining.<\/p>\n

It\u2019s reported that over 95% of pure, separated REE produced last year were in China, REE in the hardware and software applications enabling National & Homeland\u00a0Security and the capability of conducting both offensive and defensive military operations.<\/p>\n

In addition to the paramount importance of knowing where one\u2019s electricity, food & water come from, and the risk of supply disruptions therein, knowing which REE and other HVMs our modern society cannot live without, is necessary and prudent.\u00a0 In World Wars I & II, people knew exactly which materials were essential to the war effort, tin, rubber, aluminum & steel, among others\u2026. Does the West need to enter into a \u201chot\u201d war to learn which metals are in fact critical?<\/p>\n

Which critical metals will be most vulnerable to steady, secure supply to the U.S. DOD and DOE?<\/p>\n

Am I being alarmist with the talk of WW III?\u00a0 Perhaps, but no matter what the future holds, I think that\u00a0Ucore Rare Metals\u00a0is well positioned to thrive in a world becoming more dangerous and more dependent on technology, with no end in sight.\u00a0 Investment funding for companies like Ucore are increasingly becoming available, for example this \u201cInnovation Summit<\/em>\u201d organized by \u201cAmerica\u2019s largest angel investment fund, representing over $2.5 billion in early-stage, high-risk technology funding..<\/em>.\u201d<\/p>\n

\"screen-shot-2016-12-01-at-1-36-54-pm\"<\/p>\n

Regardless of what readers think of Mr. Trump, he has explicitly stated things that favor larger military budgets.\u00a0 Without further commentary, here is what he has said, 1) Japan and Korea should strongly consider defending themselves 2) western Europe is not paying nearly enough for the military protection provided by the U.S. 3) given items 1, & 2, the belief that the military has been meaningfully underfunded\u00a0and is in desperate need of a face lift.\u00a0 In addition to National Defense considerations,\u00a0remember that Trump is gunning for China as well.<\/p>\n

A larger U.S. military budget correlates well with larger military expenditures around the world.\u00a0 That\u2019s why a group of 6 well known military and homeland security stocks including\u00a0Raytheon\u00a0(NYSE: RTN),\u00a0Lockheed Martin\u00a0(NYSE:\u00a0LMT),\u00a0Harris Corp\u00a0(NYSE: HRS)\u00a0L-3 Communications\u00a0(NYSE: LLL),\u00a0Rockwell Collins\u00a0(NYSE: COL) and\u00a0General Dynamics\u00a0(NYSE: GD) is up 15% since November 8th, vs. the S&P500, up 4%.\u00a0 Why should it be any different for\u00a0Ucore, on the leading edge of new, green, high-tech platforms that will shape global geopolitics and our technology paradigm for decades?<\/p>\n

Finally, readers might recall that President-elect Trump said he will designate China a \u201ccurrency\u00a0manipulator,\u201d and slap a 45% tariff on Chinese imports.\u00a0 Given that country\u2019s giant pile of U.S. Treasuries, and its control and utter dominance of all things REE, a trade war with China could be a dangerous undertaking.<\/p>\n

As has been reported in detail by Ucore,\u00a0REE and hard to replace or substitute HVMs are essential ingredients in a large and growing number of DOD\u00a0& Department of Energy (\u201cDOE\u201d) applications, not to mention in mining and industrial settings.\u00a0 Also contained in prior Ucore press releases is evidence that its MRT platform has been proven and independently verified, at pilot scale and ready for production scale in the near future.<\/p>\n

What makes MRT superior to other proposed solutions?\u00a0 Relying heavily on last century\u2019s separation technologies like solvent extraction is an ill-advised and increasingly non-viable strategy, especially in China.\u00a0 It\u2019s impossible to ignore the horrendous air and water pollution, perhaps the worst on the planet, in Chinese cities.\u00a0 Not only is China\u00a0de-emphasizing coal and going all-in on nuclear power, it already leads the world in wind and solar power and the electrification of its transportation sector.\u00a0\u00a0MRT is not only greener,\u00a0it will deliver desperately needed\u00a0security of supply\u00a0to global end users, especially in the U.S.<\/p>\n

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Just-in-time processing and supply chains are the norm.\u00a0 Turning complex facilities and integrated systems off, and on, is time consuming, costly and introduces unnecessary operating risks.\u00a0 It\u2019s alarming that U.S. agencies, both inside and out of the DOD, not to mention powerful industry trade associations, have failed to address this critically important issue.\u00a0 The ongoing failure to obtain some semblance of security of supply is a clear and present danger.<\/p>\n

Conclusion<\/p>\n

The implications for REE mining and production outside of China, are profound. \u00a0Ucore Rare Metals\u00a0[TSX-V: UCU] \/ [OTC: UURAF]\u00a0is in a prime position to 1) benefit from higher REE & HVM prices 2) be part of the solution of the rallying cry for security of supply, and 3) address increasing demand for products and technologies that accelerate the game-changing shift away from fossil fuels.<\/p>\n

All roads lead to greater use of select metals like the ones mentioned, but also greater use of metals that galvanize steel and can be used in next generation alloys.\u00a0 However, perhaps most important to recognize, is that some of the REE\/HVMs most in demand\u00a0and\u00a0most difficult to secure in the future, might not be on anyone\u2019s radar screen today.\u00a0 That\u2019s why the flexibility afforded by over 60 SuperLig\u00ae products\u00a0embedded into Ucore\u2019s flagship enterprise with IBC on MRT is an increasingly important and valuable asset.<\/p>\n

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End note<\/em>: Hiding in plain sight, China\u2019s monopoly on critical REE is a well-researched and reported topic.<\/em><\/p>\n

ThreeConsulting.com\u00a0Article<\/a>\u00a0April, 2016<\/p>\n

BreakingDefense.com Article<\/a>\u00a0March, 2016<\/p>\n

Russia Direct Article<\/a>\u00a0February, 2016<\/p>\n

U.S.\u00a0Government Accountability Office Report<\/a>\u00a0February, 2016<\/p>\n

Disclosures<\/u>: The content of this article is for informational purposes only. Readers fully understand and agree that\u00a0nothing\u00a0contained herein,\u00a0written\u00a0by Peter Epstein, about\u00a0<\/em>Ucore Rare Metals,\u00a0<\/em>including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered, in any way whatsoever, implicit or explicit investment advice. Further,\u00a0nothing\u00a0contained herein is a recommendation\u00a0or solicitation to buy, hold or sell any security.\u00a0<\/em>Peter Epstein and Epstein\u00a0Research\u00a0[ER]\u00a0have never been, and are not currently, a registered or licensed financial advisor or broker\/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and they\u00a0do not\u00a0perform market making activities. Peter Epstein and\u00a0[ER]\u00a0are not\u00a0directly\u00a0employed by any company, group, organization, party or person. Shares of\u00a0<\/i>Ucore Rare Metals\u00a0<\/em>are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks\u00a0can result in a 100% loss of invested funds.<\/em><\/p>\n

At the time this article was posted, Peter Epstein owned shares in\u00a0<\/em>Ucore Rare Metals\u00a0<\/em>and the Company was a sponsor of\u00a0<\/em>Epstein Research<\/a>.\u00a0Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he\u2019s diligent in screening out companies that, for any reasons, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful.\u00a0Mr. Epstein &\u00a0[ER]\u00a0are not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article.<\/em><\/p>\n<\/div>\n

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By\u00a0Peter Epstein, CFA, MBA\u00a0 \u00a0\u00a0epstein.peter4@gmail.com\u00a0\u00a0 \u00a0http:\/\/EpsteinResearch.com\u00a0\u00a0 \u00a0 Ucore Rare Metals\u00a0[TSX-V: UCU] \/ [OTC: UURAF]\u00a0continues to make confident strides in the commercialization of its\u00a0Molecular Recognition Technology (\u201cMRT\u201d)\u00a0platform, contained in an enterprise to be co-owned between Ucore and\u00a0IBC Advanced Technologies, Inc.\u00a0 Key to the enterprise is that it has\u00a0exclusive rights to deploy the entire SuperLig\u00ae\/MRT catalogue of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-99136","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=99136"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99136\/revisions"}],"predecessor-version":[{"id":99137,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/99136\/revisions\/99137"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=99136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=99136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=99136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}