Geomega Resources Inc. (“
Geomega” or the
“
Corporation”) (TSX:V.GMA) (OTC: GOMRF), a rare
earth clean technologies developer for mining and recycling, and
USA Rare Earth, LLC, the funding and development partner of the
Round Top Heavy Rare Earth and Critical Minerals Project in West
Texas, are pleased to announce that they have entered into a Letter
of Intent (LOI) to recycle rare earth-containing production waste
from USA Rare Earth’s future production of sintered neodymium iron
boron (NdFeB) permanent magnets (sintered neo magnets) in the
United States.
As part of its mine-to-magnets strategy, earlier
this year USA Rare Earth purchased the sintered neo magnet
manufacturing equipment formerly owned and operated in North
Carolina by Hitachi Metals America, Ltd. USA Rare Earth is
currently evaluating options for the location of the plant, which
will become the first neo magnet manufacturing plant in North
America since the Hitachi facility ceased operations in 2015. Other
domestic sources of neo magnets either import magnets for assembly
in the US or import sintered neo magnet blocks that are machined
and assembled in the US.
The plant was designed to produce in excess of
2,000 tonnes of sintered neo magnets per year, or approximately 17%
of current U.S. demand for neo magnets. The process of
manufacturing and machining neo magnet blocks generates up to 30%
swarf and scrap (up to 600 tonnes), which needs to be recycled.
Material from USA Rare Earth’s facility and material from machining
of other blocks will be the feed for Geomega’s recycling plant
located in St-Bruno, Quebec which, after processing, could become
one of the rare earth oxide feed required for USA Rare Earth’s
magnet plant. USA Rare Earth is expected to make all its swarf and
scrap available for Geomega to recycle for a minimum period of five
(5) years, commencing on the effective date of a definitive
agreement between the companies.
“With more than 60% of the materials coming out
of our Round Top deposit being used in clean tech, green tech and
renewable energy applications, we see recycling magnet waste as a
natural way to be economically efficient and environmentally
responsible,” said Pini Althaus, CEO of USA Rare Earth. “Geomega’s
process to recycle waste and bring it back into our magnet
feedstock reconfirms our readiness to innovate at every point in
our mine-to-magnets strategy. It is also part of our strategy
accelerate revenues from our U.S.-based neo magnet production ahead
of mine production from the Round Top project.”
“We see this collaboration with Geomega as an
example of the kind of cooperation called for by the U.S. and
Canadian Governments, in the area of critical minerals and Rare
Earths in particular,” continued Mr. Althaus. In January, the U.S.
and Canada finalized a Joint Action Plan on Critical Minerals
Cooperation. The Geomega-USA Rare Earth LOI follows on a
collaborative agreement between USA Rare Earth and Australia’s
Arafura Resources, involving processing work at USA Rare Earth’s
Colorado Pilot Plant. In 2019, the U.S. and Australian Governments
committed to encourage U.S-Australian critical mineral
cooperation.
“We are very excited to be working in
collaboration with USA Rare Earth. We both share the same vision to
bring rare earth magnet production back to North America while
securing the critical rare earth elements using Geomega’s clean
technology to process magnet waste.” said Kiril Mugerman, President
& CEO of Geomega. “It is exciting to be part of USA Rare Earth
mine-to-magnet strategy which we can participate in and support
using our rare earth clean recycling technology. Establishing a
partnership initiative such as this in North America will prevent
any supply chain disruptions from China for these critical
elements. Every rare earth magnet factory produces waste. By
working together, Geomega and USA Rare Earth will ensure that the
rare earths contained in this waste shall remain in North America
and are then reused to make more rare earth magnets for the U.S.
and Canadian markets that comply with the McCain National Defense
Authorization Act. It will be a great opportunity to demonstrate to
global magnet manufacturers that there are innovative solutions to
obtain rare earths from trusted sources that don’t harm the
environment and produce less greenhouse gases than the current
outdated methods used in China. Geomega’s vision is for every
magnet factory to use our technology in order to recycle their
waste and not be dependant on foreign entities,” added Mr.
Mugerman.
Geomega and USA Rare Earth will negotiate
mutually acceptable commercial terms including the possibility of a
license agreement to develop a recycling facility at the location
of its permanent magnet factory. Until such time, this LOI remains
non-binding.
Rare Earth MagnetsAs indicated
by USA Rare Earth in its April 7, 2020 press release, according to
industry estimates, permanent magnets are a $21 billion-a-year (US
dollars) global market split between high performance magnets (70%)
and lower performance ferrite magnets (30%) used in applications
such as chargers for electrical devices and other applications
where weight and performance are less important and operating
conditions are less extreme.
At $13.8 billion, neo magnets dominate the
high-performance magnet market, replacing aluminum-nickel-cobalt
and samarium-cobalt technologies. Industry sources project the
global neo magnet market will expand by nearly 100% to $27.0
billion in 2027.
In 2019, the U.S. purchased approximately 12,000
metric tonnes of neo magnets at an average price of approximately
$71,000 per tonne, according to industry estimates, representing 6%
of the global rare earth magnet market. Note that this does not
include magnets in finished and semi-finished products that are
imported – since the U.S. was approximately 23.6% of global GDP in
2019, total imports of magnets could be at least four times the
magnet-only numbers.
If the U.S. merely maintains its current 6%
share of the global market, annual purchases of rare earth magnets
will increase by more than 7,000 tonnes by 2027, or an annual
increase of more than 900 tonnes per year.
About Geomega
(www.geomega.ca)Based in Boucherville and St-Bruno,
Canada, Geomega Resources has developed a proprietary,
environmentally friendly “ISR Technology” that recycles rare earth
elements with focus on the permanent magnet industry and produces
four high demand, high price, rare earth elements (HHREE –
specifically Nd, Pr, Tb, Dy).
The Corporation is advancing towards initial
production from its demonstration plant to supply HHREE’s to North
America and other parts of the world.
Geomega also owns the Montviel rare earth
carbonatite deposit and holds over 16.8M shares, representing
approximately 19% of the issued and outstanding shares of Kintavar
Exploration Inc. (KTR.V), a mineral exploration company that is
advancing the Mitchi stratiform copper project in Quebec.
About USA Rare Earth, LLCUSA
Rare Earth, LLC has an option to earn and acquire an 80% interest
in, and is the operator of, the Round Top Heavy Rare Earth and
Critical Minerals Project located in Hudspeth County, West Texas
from Texas Mineral Resources Corp. (TMRC: OTCQB). Round Top hosts a
wide range of critical heavy rare earth elements, high-tech metals,
including lithium, uranium and beryllium, and, based on the
Preliminary Economic Assessment (dated August 16, 2019) projects a
pre-tax net present value using a 10% discount rate of $1.56
billion based on a 20-year mine plan that is only 13% of the
identified measured, indicated and inferred resources. The PEA
estimates an internal rate of return of 70% and average annual net
revenues of $395 million a year after average royalties of $26
million a year payable to the State of Texas. Based on the cost
estimates set forth in the PEA, Round Top would be one of the
lowest-cost rare earth producers, and one of the lowest cost
lithium producers in the world.
The Round Top Deposit hosts 16 of the 17 rare
earth elements, plus other high-value tech minerals (including
lithium) and is well located to serve the US internal demand. In
excess of 60% of materials at Round Top will be used directly in
green or renewable energy technologies. Round Top contains 13 of
the 35 minerals deemed “critical” by the Department of the Interior
and contains critical elements required by the United States, both
for national defense and industry. For more information about USA
Rare Earth, visit www.usarareearth.com
For further information, please
contact:
Geomega Resources Inc. |
Kiril Mugerman |
President and CEO |
Geomega |
450-641-5119 ext.5653 |
kmugerman@geomega.ca Nancy ThompsonVorticom Public
Relations212.532.2208nancyt@vorticom.comTwitter: @Geomega_REE
USA Rare Earth LLCPini AlthausChief Executive
Officer Email: pini@usarareearth.com Twitter: @USARareEarth |
Cautions Regarding Forward-Looking
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accuracy of this release.
This news release contains statements that may
constitute “forward-looking information” or “forward-looking
statements” within the meaning of applicable Canadian securities
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include, among others, statements regarding future plans, costs,
objectives or performance of the Corporation, or the assumptions
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or by which, such future performance will be achieved. No assurance
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information will transpire or occur, including as regards the
commercialization of any of the technology referred to above, or if
any of them do so, what benefits the Corporation will derive.
Forward-looking statements and information are based on information
available at the time and/or management's good-faith belief with
respect to future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond the Corporation’s control. These risks,
uncertainties and assumptions include, but are not limited to,
those described under “Risk Factors” in the Corporation’s annual
management’s discussion and analysis for the fiscal year ended May
31, 2019, which is available on SEDAR at www.sedar.com; they could
cause actual events or results to differ materially from those
projected in any forward-looking statements. The Corporation does
not intend, nor does the Corporation undertake any obligation, to
update or revise any forward-looking information or statements
contained in this news release to reflect subsequent information,
events or circumstances or otherwise, except if required by
applicable laws.
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