Welcome to the Great Western Minerals Group HUB On AGORACOM
Great Western Minerals Group Ltd. is a Saskatchewan-based junior exploration company. GWMG is engaged in the acquisition, exploration, and development of rare earth mineral properties in North America.
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Introduction:
The global Rare Earth Elements (REE) sector is a multi-billion dollar industry. Great Western Minerals Group (GWMG) is taking a leadership role in a potentially lucrative niche sector populated with only very few participants and no competitors with GWMG’s unique “Mine-to-Market” Strategy (M2M).
The Challenge for REE users: An Impending Rare Earth Element Shortage:
Global industry giants across a wide range of sectors are extremely concerned about the impending shortage of REE. Those giants need REE to maintain leadership in their respective sectors. China currently controls the REE sector as the primary supplier to the global industry, producing over 97% of the world's supply of REE. In 2012-2013, the demand for REE is expected to exceed supply as China is expected to consume all that it produces. Lack of access to secure supply could be economically crippling for many global industries that rely on REE.
The Solution: Great Western Minerals Group:
GWMG is in the right place at the right time, with an experienced Management Team, exploration and development properties in Canada and the US, along with value-added production facilities of Great Western Technologies in Troy, Michigan and Less Common Metals in Birkenhead, UK.
The Rare Earth Elements:
The Rare Earth Elements are also known as the Lanthanide Series of Elements and include the 15 elements in the Lanthanide series, plus Yttrium and Scandium. REE are used in a wide range of applications, from everyday household items, such as rechargeable cell phone batteries and computers, industrial uses in magnets and catalysts, to cutting-edge technologies such as super-alloys for the aerospace and defense industries, to manufacture a wide range of products including electronics, electric and hybrid vehicles, wind turbines, medical devices (eg, MRIs), defense systems and many other advanced technology applications.
Industry Overview:
The major consumers of REE are Southeast Asia (Japan (22%), Korea, Thailand, China (60%)) and the USA (9%). The USA currently imports nearly 100% of its REE requirement. The gross value of REE production worldwide is estimated at US$1.8 billion. According to the USGS, the trend is for a continued increase in the use of REE in many applications, especially automotive catalytic converters, permanent magnets used in hybrid vehicles and wind turbines, and rechargeable batteries. Nickel-Metal Hydride (NiMH) alloys are a vital component in the rechargeable battery units of hybrid vehicles. The REE content of a NiMH battery for hybrid vehicles is now estimated to be about 20 kg, most of which is Lanthanum mischmetal. There has been the rapid growth in demand for Neodymium-Iron-Boron (NdFeB) magnets, which has exceeded 15% per year. The permanent magnets used in the motor and generators in hybrid vehicles require between 1.5 kg and 4 kg of sintered NdFeB per vehicle. In the newer models of hybrid vehicles, the REE content is now estimated to be approximately 30 kg per vehicle, due to the increased number of motors and other magnetic devices used in the vehicles.
Key Participants, Competitors and Peers:
In the global REE exploration sector there are only a handful of active private or publicly-traded companies. In addition to Great Western Minerals Group (Canada), these include Avalon Rare Metals Ltd. (Canada), Lynas Corporation Ltd. (Australia), and Arafura Resources Ltd. (Australia). Molycorp Minerals LLC is a major, private company that recently purchased a proven primary REE resource - the Mountain Pass rare earth operation in California. China is a significant producer of many REE products but LCM remains well ahead of the capabilities of any of the Chinese alloy producers. There are other producers of REE products worldwide, but LCM also has several advantages over those competitors.
Company Overview:
In addition to its four exploration projects in North America, GWMG owns production facilities in the United States and the United Kingdom which provide specialized alloys and other products for a wide range of industries. GWMG has a knowledgeable, experienced Management Team, Board of Directors, and Advisory Board with extensive experience in all aspects of the business, including exploration and development, mining operations, specialized product development, sales and marketing. The Company has an established customer base of well-known, blue chip global users in the battery, magnet, aerospace and nuclear industries.
Properties:
GWMG has a portfolio of properties which also includes several base metals and strategic metals properties that the Company had acquired since inception.
Hoidas Lake is GWMG’s initial REE project, located 50km, northeast of Uranium City in Northern
Saskatchewan. This is an advanced property with a proven resource which is being further developed. A NI 43-101 Compliant Resource Report has been prepared and work continues to advance this project. A Metallurgy Study is also underway to optimize previously defined processes, and examine new potential alternatives to the extraction of rare earths from the Hoidas Lake mineralization. The Preliminary Economic Assessment Report (PEAR) is being developed and will be updated, based on results from metallurgical testing and the 2008 winter exploration drilling program. Completion of the current stage of the PEAR leading to a Hoidas Lake Feasibility Study is dependent upon the successful completion of metallurgical testing and optimization of defined processes. Permitting efforts would be initiated once the final feasibility study is completed and a decision to proceed with the project is made.
The Steenkampskraal Rare Earth Mine. In January 2009, GWMG entered into an option agreement
with Rare Earth Extraction Co. Ltd. (“Rareco”) of Stellenbosch, South Africa, to refurbish, re-commission, and operate the currently abandoned Steenkampskraal underground mine in the Western Cape, South Africa. An updated feasibility study is nearing completion and is expected to be submitted in Q4 2009. The existing Steenkampskraal Mining Licence covers 474 hectares. The property is located approximately 70 km north of the town of Vanrhynsdorp, population 4,000, in the Western Cape Province of South Africa and is approximately 350 km north and west of Cape Town. Infrastructure is excellent, with access to the site by paved and gravel roads and close proximity to rail and sea-port; the governments are pro-development, and there is technical expertise available as well as a trainable work force. The main rare earth-bearing mineral is monazite and is hosted by an igneous intrusive dyke system. The mineral deposit is tabular in shape with a known strike length of 400m and has been traced down dip for 250m. Thickness ranges from 0.3m to 4.0m and the average in-situ grade is 16.74% total rare earth oxide (“TREO”), making it one of the highest grade rare earth deposits known to exist. The deposit also contains significant amounts of copper, gold and phosphate which could be recovered as by-products. Very little exploration work has been done on the property and the deposit remains open along strike and at depth. The Deep Sands project is a 168 km2 (65 mi2), Iron and REE-enriched mineral sand in west central
Utah. The project area is 190 km (120 miles) SW of Salt Lake City and about 135 km (85 miles) NW of Delta Utah. Two drilling programs have been completed and an evaluation of the data compiled is expected to be completed by year end, with the intention developing a NI 43-101 resource report. The Douglas River Property consists of two claims (totalling 803 hectares) approximately 21 km south of the former Cluff Lake Uranium mine and approximately and 420 km NW of La Ronge SK. Historic trench sampling yielded rare earth element grades of up to 10% yttrium with accompanying high grades of heavy rare earths (“HREE”) including Dysprosium with grades up to 0.89%. Dysprosium is the most sought after REE by the Japanese magnet manufacturers. The planned exploration program includes geological mapping, trenching, soil and lithogeochemistry in order to identify drill targets. The Benjamin River rare earth element project is located approximately 53 km west of Bathurst, New
Brunswick. The property consists of 493 claim hosting a heavy rare earth element enriched, apatitediopside- magnetite vein. Access to the property is via paved highway and logging road. Additional infrastructure includes a railroad within 10 km, ports within 50 km, and power lines also within 2 km. The heavy rare earth elements such as dysprosium are critical to the production of high temperature permanent magnets used in hybrid vehicles. In July, 2009, GWMG signed a Letter of Intent with Toyota Tsusho Corporation to examine the merits of
jointly conducting exploration and development activities on GWMG’s Douglas River and Benjamin River exploration projects. The Misty Property consists of a single exploration license in northwest Manitoba approximately 20 km
northwest of Lac Brochet, MB and 240 km NW of Lynn Lake, MB. In June 2008, GWMG entered into a C$6 Million option agreement with CanAlaska Uranium whereby GWMG can acquire up to a 51% interest in CanAlaska’s Misty Project upon the completion of a prescribed exploration program.
Value-Added Processing Facilities:
Less Common Metals is a profitable, leading global manufacturer and supplier of rare-earth-based
alloys, high purity metals, and ultra-high-purity indium. LCM has established excellent long term relationships with a wide range of blue-chip customers who operate in technically demanding industries such as automotive, aerospace, nuclear and defense. Other specialty alloys produced in Birkenhead include Neodymium-Iron-Boron and Samarium Cobalt alloys for the permanent magnet industry, magneto-optic and magnetostrictive materials, hydrogen storage systems, high purity Rare Earth metals, ultra high purity Indium, and master alloys used in the production of other specialty alloys. LCM manufactures approximately 20% of the estimated global consumption which is estimated at 1,000 tonnes per annum (tpa). Production at the Birkenhead Plant for the 30 June 2008 year end was 430 tonnes of alloy and metals. The plant has the capacity to produce approximately 1,110 tpa.
Great Western Technologies is an ISO 9001:2000-certified research and manufacturing facility with
state-of-the-art engineering technology for the production of REE materials, powders, and custom vacuum-grade specialty alloys. From its 12,000 ft2 manufacturing facilities in Troy MI, GWTI produces a wide range of alloys utilizing rare earths and aluminum, copper, cobalt, iron, nickel and titanium. In addition, GWTI manufactures special alloys for the Battery Industry and Hydrogen Storage Applications. GWTI provides special processes for a wide range of applications. GWTI is one of few facilities in North America that can produce ground powders in an inert environment, and has the capability to provide materials of exceptionally high purity with its vacuum melt furnaces. The GWTI plants have four hydrogen-safe areas that can be used to activate hydrogen storage materials.
Growth Strategy:
With its diversified business model and unique M2M strategy, GWMG has developed a growth strategy for exploration, mine development, and value-added product sales. There are several ways in which GWMG continues to implement its growth strategy, including continued development of its existing properties through advanced exploration to increase its resource base, and potentially increasing production or extending mine life. GWMG has well-defined criteria for evaluating new REE prospects as potential additions to its portfolio. Joint Venture Agreements or Option Agreements are effective ways to develop resources while mitigating risk. Such agreements can be terminated or allowed to lapse at any time, without incurring further expense, if the property does not show potential, even after a preliminary amount of work is completed. GWMG is regularly approached by other exploration companies which are exploring for other metals, but discover REE in their assays. These companies may not have the expertise in developing this resource, but recognize the economic potential with the right partner. These also represent growth opportunities for GWMG.
Fast-Track Mine Development: Acquire Existing Mining Operations: GWMG has the expertise to
conduct technical and economic evaluations of existing mining facilities in the rare earth sector, globally. Having ownership of its own value added facilities would place GWMG in an excellent position to consider re-commissioning such mines to accelerate access to a secure supply of REE. GWMG is currently evaluating some past producers of REE.
Strategic Partnerships: Alternative Sources of REE: Rare Earth Elements are commonly found as
byproducts in several deposit types including uranium and cobalt deposits. In these deposits, REE are commonly discarded because the operating company does not have the knowledge of either the recovery or marketing of the REE. As a result there is an opportunity for GWMG to enter into mutually-beneficial Joint Venture agreements to recover the REE which could provide additional revenue for the operating company and a supply of REE for GWMG’s processing facilities.
Strategic Partnerships: End Users: Several industrial end-users have approached GWMG to discuss strategic relationships to provide end users with access to REE from GWMG’s operations. In general, these companies could provide capital to GWMG in return for an off-take agreement for specific rare earth products. Less Common Metals and GWTI: The recent acquisition of LCM by GWMG creates an excellent opportunity for cross-selling and marketing for LCM and GWTI. In addition, LCM and GWTI will further expand their product development to introduce new products to its existing customers while expanding their customer bases. Summary: Great Western Minerals Group and its value-added production facilities of Less Common Metals and Great Western Technologies are in the unique position of establishing themselves as global leaders in developing a rare earth industry outside of China. The global fundamentals point to an impending shortage of rare earth elements, which could potentially jeopardize the technological leadership held by many of the existing industry end users. Through the successful implementation of the Company’s mineto- market strategy, Great Western Minerals can establish itself in a leadership role and meet many of the demands for rare earth elements in many years to come. Certain statements in this document may include “Forward-Looking Statements”. Forwarding-looking statements are based on current expectations, estimates, forecasts and projections of future company or industry performance based on management’s judgment, beliefs, current trends and worldwide market conditions. Forward-looking statements include, but are not limited to, Great Western Minerals Group’s continued advancement of its mineral exploration and development programs. When using this document, the words “potential,” “anticipate,” “forecast,” “believe,” “estimate,” “expect,” “may,” “project,” “plan” and similar expressions are intended to be among the statements to identify forwardlooking statements. Although Great Western Minerals Group believes that its expectations reflected in these forward-looking statements are reasonable, such are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, such as general market financial, economic, regulatory and political conditions. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. Great Western Minerals Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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