Byron King may be today's rainmakerFrom his article:
This is as good a time as any to mention another company that I've been quietly following. This company is also setting up for a leapfrog event, of sorts.
The name is Vancouver-based Medallion Resources (MDL: TSX-V). This is not a formal ESI "buy" recommendation, but I'm telling you that Medallion is getting real interesting.
Medallion is working on several deals to acquire interests in a series of mineral sand deposits. These sands are composed of monazite, which is a rock that, depending on the exact mineralogy, is rich in HREE and LREE. With Medallion, the project involves monazite sands that are part of the tailings from other mining, particularly iron ore and titanium-ilmenite.
I'm not at liberty to get into specific detail -- the exact locales and mines -- but I've seen what Medallion wants to do. That is, there are iron and ilmenite operations that recover the specific ferrous ores. And then, the operators literally dump the monazite into big piles. The iron miners have never cared about the monazite, and they're not about to start now.
In fact, the iron and ilmenite guys would just as soon allow somebody else come in and take some of their "waste" rock off their hands. So basically, with Medallion, the idea is to use RE ore that's already "mined," after a fashion. Now it's an engineering issue of running the monazite through a concentration circuit. That's doable.
Medallion has modest, achievable goals, focused on making something happen in the near and medium term. The idea is to minimize technical complexity and up-front cost. Medallion has no immediate plan to refine the ores into RE powders or such.
Instead, Medallion's plan is to take the low-cost tailings, and concentrate the RE elements. A concentration plant is a fraction of the cost and complexity of a full-up new refining plant, like what we see Lynas and Molycorp building.
Then Medallion wants to sell the monazite concentrate to any of many other facilities, worldwide, that need this product. End users include Japanese, Korean, Indian and European companies -- not to mention those needy Chinese, whose looming imports I mentioned in the first part of this article.
The Medallion project is not the total "value added" business model -- like Molycorp's plan for "mine to magnets." But the Medallion model has a super-low cost structure due to off-taking the tailings of another mining project. Cost per ton is dirt cheap, if you'll excuse the analogy.
I'm expecting the Medallion monazite deals to firm up in the not-too-distant future. Then I'll know more, and I can tell you more. There's still a lot of work for Medallion to do, but the idea is intriguing. It's low cost. It's not too complex. And with China poised to import? Like I said, it's doable.
At this stage, Medallion isn't an "official" ESI recommendation. I'm awaiting the real off-take deals to gel. But I'm watching Medallion, and I feel good enough about management, and its plan, to tell you about it.
So let's call Medallion a "strong speculation." If things work out like I hope with Medallion, you'll be way ahead of the curve on this one.
That's all for now. Thanks for reading. Have a great weekend.
Byron W. King