Gabo Mining Ltd V.MDL

Medallion MD&A posted yesterday

[tes1936]

OUTLOOK

Medallion’s acquisition and exploration program targets those REE potential-production and mineralexploration

projects that offer a reasonable solution to the two most critical REE-supply issues. These are:

1. a near-term shortage of REE supply, and

2. a lack of low-production-cost projects that can supply long-term sustainable REE supplies.

To solve the critical REE near-term-shortage and low-cost long-term supply issues, Medallion is focusing

on the mineral monazite as a near-term source and is seeking monazite processing partnerships and

purchase-agreements. The mineral monazite, an REE phosphate, was the world’s original source for

REEs. In the 1950s, with the discovery of the Mountain Pass mine in California, bastnaesite replaced

monazite as the leading REE source. Today, monazite and bastnaesite account for about 95% of the

world’s REE resources (roughly evenly split between the two minerals). Even at Mountain Pass, a

significant amount of the REEs are in monazite.

New REE production from monazite can be developed quickly and inexpensively because monazite is a byproduct

of heavy-mineral-sands mines around the world. The huge heavy-mineral-sands industry provides

the world’s main source of titanium and zirconium. Many of the mines maintain reserves in excess of one

billion tonnes, which translates into 20 to 40 years of production per mine. The by-product monazite from

just one of these huge mines could produce more REEs than most REE mines outside China.

By-product monazite does not require exploration, proving of ore, mining or most milling processes.

Monazite metallurgy is relatively simple, when compared to other REE minerals, and the metallurgical

processes have successfully produced commercial REEs for over 100 years. No other REE mineral, except

bastnaesite, has such a record of commercial success. These are significant cost-saving and time-saving

attributes.

Medallion also is targeting the acquisition of properties with ion-absorption-style REE occurrences. This

style of REE occurrence is often called the “South China Clays” model. At this time, the ion-adsorption

deposits in South China are the only known such occurrences; however, the necessary criteria, an

underlying geology with elevated levels of REE’s and a monsoon climate, are not difficult to match in

other areas of the world.

The advantage of these ion-absorption occurrences is that, in advance of any mining, monsoon weathering

has stripped the REE ions from their original REE minerals. The REE ions then are absorbed by clay

minerals, which also are the result of the monsoon weathering. REE ions absorbed by clays are much

easier, and cheaper to extract than the REE ions that are tightly locked in the structure of the pre-weathered

original minerals.

One other criterion is important for an economically viable ion-absorption REE deposit; it must be large.

Large-tonnage ion-absorption REE deposits can offer the economy-of-scale low bulk-tonnage mining and

extraction costs and long-term infrastructure amortization, which is necessary for a 21st Century mining

operation.

The Company’s strategies and acquisition targets have significant potential. To realize this potential, the

Company will follow through with the necessary acquisition, exploration and development work,

employing the talents of recognized experts in rare-earth exploration.

The Company is currently investigating new acquisitions. If new acquisitions are made, additional funding

may be required.