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Reach Resources Limited (ASX:RR1) ("the Company" or "Reach Resources") provides its activities report for the quarter ended 31 March 2022.
Strategic Investment into Cutting-edge Rare Earth Element Recycling Business
- Strategic investment of $1.8M into REEgenerate Pty Ltd, an Australian private company that owns 100% of the Coconut Club REE exploration project in Quebec, Canada and that has subsequent to the quarter end exercised its option and acquired 100% of REEcycle Inc, a US based Rare Earth Element (REE) separation and technology Company (ASX announcement 13 April 2022)
- REEcycle has developed a process that has shown at pilot scale the ability to reclaim 15 of the 17 rare earth elements in discarded permanent NdFeB magnets, with a recovery efficiency in excess of 99%
- The patented process developed at the University of Houston uses a proprietary solvent to safely and efficiently extract REEs from permanent magnets found in wind turbines, electric vehicles (cars, bikes, scooters), MRI machines and other electronic waste with low temperatures, low pressures, and minimal energy needs and waste
- REEcycle aims to provide an alternative option to traditional mined sources of rare earth metals as well as reduce supply chain uncertainty and geopolitical risk for companies reliant on these materials
- The global permanent magnet market size was valued at USD$17.85 billion in 2018 and is projected to reach USD$34.70 billion by 2026, exhibiting a CAGR of 8.7% during the forecast period 1 , with the rare earth metals component being valued at US$5.3 billion in 2021 with only 1% of REEs sourced from recycled end of life products 2
- Shanghai Metals Market (SMM) forecast recycling of NdFeB magnets is likely to be the largest growth of neodymium and dysprosium supply from 2021 to 2025
Placement raises $2.4M
- As announced on 21 March 2022, Reach Resources raised $2.4M in new equity to fund its investment in REEgenerate and the development of its existing mineral resource exploration projects, including working capital.
Appointment of CEO
- On 23 March 2022 RR1 announced the appointment of Mr. Jeremy Bower as CEO of the Company.
1) REEgenerate Investment
Reach Resources (“Reach” or “Company”) is pleased to announce that it has made a strategic investment of $1.8M into REEgenerate Pty Ltd (“REEgenerate”), an Australian private company that owns 100% of the Coconut Club REE exploration project in Quebec, Canada. REEgenerate also had an option to acquire 100% of REEcycle Inc (“REEcycle”), a US based Rare Earth Element (REE) separation and technology Company. Subsequent to the quarter end as announced to ASX on 13 April 2022, REEgenerate exercised its option to acquire 100% of REEcycle, giving Reach Resources direct exposure to this company, whose future is aligned with current global social and political thinking of a cleaner, greener future through the circular economy principle.
New CEO Jeremy Bower commented “Our shareholding in REEgenerate represents an exciting addition to our portfolio of exploration assets, particularly our REE projects. We will continue to update the market on this investment in parallel with the development of our resource projects”.
This article includes content from Reach Resources Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
It’s no secret that the world is pivoting toward clean technology, but it’s not as simple as flipping a switch. Manufacturing green tech calls for higher quantities of critical metals, such as lithium, nickel, and rare earth elements. Rare earth elements (REE) are necessary to produce the powerful magnets found in nearly every emerging clean technology, such as electric vehicles (EVs) and wind turbines. Yet, China produces between 80 and 90 percent of all REEs on the planet. This monopoly causes countries with ambitious goals to become carbon neutral dependent on China, making world governments nervous.
The Australian government recognizes its dependence on China, while acknowledging its untapped REEs and critical minerals deposits. The success of Hasting Technology Metals’ (ASX: HAS) Yangibana Project in the Gascoyne Province has rekindled interest in REEs. Reducing its dependence on imported critical metals is why the government committed AU$240 million to critical mineral projects, ranging from mining operations to building new refineries.
Reach Resources Limited (ASX:RR1), formerly known as Cervantes, is a Perth-based exploration and development mining company, focused on developing a critical metals supply chain in Australia, with both long- and short-term approaches. In addition to promising mining projects, the company has also invested in new exciting new REE recycling technology.
The company’s short-term plan for generating cash flow focuses on its flagship project, the Primrose Gold Project. This asset has significant interactions with gold regions based on historical drilling campaigns, including near-surface deposits. In addition, nearby mills within the district will allow Reach Resources to refine its raw materials and quickly generate cash flow. This strategy creates near-term value while the company pursues its long-term goals.
Reach Resources has two other projects focused on REEs within the Gascoyne Province, the same province of the successful Hasting Technology Metals project. These assets are the Skyline Rare Earth Project and the Critical Elements Rare Earth Project. The company has wholly-owned exploration licenses for both projects. Each project contains known REE mineralizations, and the company is focused on determining the reach of these deposits.
Recycling discarded neodymium (NdFeB) magnets is the foundation of the company’s long-term strategy. It has invested in REEcycle, a magnet recycling US-based company, leveraging technology pioneered at the University of Houston. The current market solution for recycling these magnets dissolves iron and boron in the process, whereas REEcycle’s technology separates them, which means more value is extracted from discarded magnets. Additionally, pilot testing shows that the new technology can achieve up to 99.8 percent recovery efficiency of the REEs. Reach Resources hopes to bring this technology to Australia.
Reach Resources is led by an experienced management team that builds confidence in its ability to reach its goals. Jeremy Bower, CEO, has over 15 years of experience working with governments and developing projects with solid ESG ratings. Robert Downey, non-executive chairman, is a commercial lawyer with over 20 years of experience helping companies in the public and private sectors. Additional experts in the mineral industry and corporate governance round out the management team.
- Reach Resources is an Australian-based exploration and development mining company with short- and long-term objectives to create near-term cash flow and long-term value with gold and REE-focused projects and technologies.
- The company’s near-term value-creation strategy is developing its gold asset, which contains near-surface mineralizations and leveraging nearby mills to create value.
- Reach Resources wholly owns the exploration licenses for two REE-focused assets that allow for near- and long-term value creation.
- Investing in an emerging magnet recycling technology, REEcycle, diversifies the company’s portfolio and hopefully allows them to bring the US-based technology to Australia.
- A strong management team with decades of diversified experience leads the company towards its ambitious goals.
Primrose Gold Project
With a history dating back to 1911, this project has been known for its gold deposits for over a century. Three notable mines are located within the project’s area, with a gold-rich fault estimated to be anywhere from four to nine kilometers long. The company is working towards moving the historical estimate into compliance with the Joint Ore Reserves Committee (JORC).
- Well-known Gold Field: This project is known for its gold deposits, and miners in the early 1900s found 25 g/t with old equipment and techniques. Now, more recent exploration programs have indicated the existence of substantial gold at shallow depths with high-grade intercepts.
- Encouraging Historical Results: Prior firms have conducted multiple exploration campaigns with promising results. These results reach up to 8.05 g/t from 77 meters, with additional results at near-surface depths.
- Nearby Processing Facilities: Two mills within the district are available for processing the raw materials. However, the mine may eventually support its standalone mill.
- Robust Infrastructure: The project is located a mere four-and-a-half hours north of Perth. A local roadhouse provides accommodations and maintains a nearby airstrip.
Skyline Rare Earth Project
Reach Resources acquired the project in November 2021 as part of its renewed focus on REEs. The project covers 247 square kilometers, and the company holds a 100 percent exploration license.
- Located in Gascoyne Province: The success of the Hastings Technology Metals project within the Gascoyne Province has sparked renewed interest in the region for REEs. The Hastings project hosts 27.42 million tonnes at 0.97 total contained rare earth oxide (TREO).
- Encouraging Historical Results: Previous exploration results indicate extensive mineralized systems with shallow near-surface deposits. The project shows tremendous upside potential as additional exploration commences.
Critical Earth Rare Elements Project
This project was also acquired in November 2021 and is located in the Gascoyne Province. Additionally, Reach Resources has 100 percent owned exploration licenses. The project covers approximately 59 square kilometers. The project has historically produced beryl, mica, bismuth, tantalum, and REEs have also been identified.
- Sparse Historical Mining: The project has received sporadic attention, and previous owners were focused on tantalum-niobium-beryl-mica deposits. However, prior exploration has indicated the presence of high levels of REEs, including:
- 5.04 percent of tantalum pentoxide
- 39.78 percent of niobium pentoxide
- 11.48 percent of triuranium octoxide
- 0.57 percent of diyttrium trioxide
- 2.30 percent of thorium dioxide
- 0.54 percent of tungsten trioxide
- 0.19 percent of zirconium dioxide
- 0.19 percent of dicerium trioxide
- 0.13 percent of lanthanum oxide
- 0.14 percent of dineodymium trioxide
- 0.15 percent of disamarium trioxide
- 0.06 percent of terbium trioxide
- 87 ppm of europium three
- Limited Previous Exploration: Past exploration was conducted in the 1970s and focused on airborne radiometric surveys. These campaigns identified uranium occurrences.
- Modern Exploration Campaigns Planned: Reach Resources intends to fully carry out multiple exploration campaigns to understand the REE mineralizations fully. These campaigns include interpretation of satellite imagery, field reconnaissance including pegmatite sampling, and scout drilling testing.
Jeremy Bower - CEO
Jeremy Bower is an experienced executive, and project manager demonstrated across the mining, agricultural, and industrial sectors. In particular, he brings a unique skill set that is highly relevant to our diversified resources company. Bower brings over 15 years of experience dealing with the government, key stakeholders, and engineers, obtaining project approvals, and bringing solid environmental, social, and governance (ESG) credentials, which are now demanded by investors and communities alike. Bower’s appointment comes as Reach Resources focuses on driving a detailed plan to assess and deliver more value from its assets and take steps toward being a significant player in the emerging circular economy.
Robert Downey - Non-Executive Chairman
Robert Downey is admitted as a barrister and solicitor in Western Australia and has practiced as a corporate and commercial lawyer for over 20 years. He advises a wide range of public and private companies, and high net worth individuals, concerning commercial and corporate transactions. Downey has been a director of many publicly listed and private companies, offering significant experience as a director. He has particular experience in day-to-day listing rule compliance, disclosure, and governance issues.
Sam Wright - Non-Executive Director
Sam Wright has over fifteen years of experience in the administration of ASX-listed companies, corporate governance and corporate finance. He is a member of the Australian Institute of Company Directors, the Financial Services Institute of Australasia, and the Chartered Secretaries of Australia. Wright is currently the finance director and company secretary of PharmAust (ASX:PAA) and non-executive director and company secretary of structural monitoring systems (ASX:SMN). Wright is company secretary at Buxton Resources(ASX: BUX) and Wide Open Agriculture (ASX:WOA).
Matthew O'Kane - Non-Executive Director
Matthew O’Kane is an experienced mineral industry executive and company director with 25 years of experience in the mining, commodities, and automotive sectors. He has held senior leadership roles in Australia, the US, and Asia, in both developed and emerging markets. O’Kane has served on the board and as an executive of mining companies in Canada, Hong Kong, and Australia,. He is currently the managing director of Comet Resources, non-executive director of Pursuit Minerals and non-executive director of Azarga Uranium. During his career, O’Kane has worked with companies involved in production, exploration, and development.
Chris Achurch - Company Secretary
Chris Achurch provides company secretarial, corporate advisory, and general consulting services to a number of ASX-listed clients.