With the U.S. Scrambling for Reliable Rare Earth Supply, This Company is Positioned to Meet Demand with one of the HIGHEST Grade Deposits in the World
Defense Metals Corp. (CAN:DEFN)(US:DFMTF) is a mineral-rich exploration company that’s currently focused on its 1,708 hectare Wicheeda Rare Earth Element Project located near Prince George, British Columbia, Canada. Defense Metals is well-positioned to meet demand for North American-sourced critical REE’s with one of the highest-grade road accessible deposits, with potential to reduce the political and strategic risk of current reliance on Chinese REE sources.
The U.S. is in a dire situation.
For years we’ve been over-dependent on China for rare earth supply.
However, that arrangement isn’t reliable, nor is it safe — forcing us to look elsewhere.
Making the situation far worse, China has threatened to withhold rare earth AGAIN, well aware that if they choke supply, they rattle markets.(5)
They’re very well aware that billions of dollars’ worth of their supply translates into trillions of dollars’ worth of finished products. In fact, they’ve been aware of that for quite some time, and have only solidified their stranglehold of those critical materials.
At the moment, China controls approx. 80% of all rare earth metals used in the United States, which means we’re incredibly reliant on their supply.
Without it, key industries – robotics, 5G, solar panels, your iPhones, electric vehicles, and other civil and military technologies – suffer.
Materials for these products just can’t be made without it.(6)
There’s about 0.15 grams of palladium in your iPhone. There’s up to 472 kilograms of rare earths in a F-35 jet. There’s four tons of rare earth in a submarine, says The Sydney Morning Herald.(7)
It could very well impact a potential $3 trillion electric vehicle market
There’s hope we could see 125 million EVs on the road(8), as global governments push for a greener world. But that can’t happen without secure supply. Up to 27% of rare earths are used in the production of neo-magnets, which are absolutely essential in all electric vehicles.(9)
Without rare earth, a potential $3 trillion EV market grinds to a halt instantly.
In fact, three key elements — neodymium, terbium and dysprosium, which act as raw materials in the production of these magnets—could face a critical supply shortage.(10)
- Apple for example uses several rare earths in all of its products – including neodymium, praseodymium, and dysprosium. These elements can be found in nearly all of Apple’s major products, including iPhones, iPads and Macs. They show up in magnets inside speakers, and cameras. Without rare earth, a $2 trillion company runs into problems.(11)
- Restricted rare earth could deal a big blow to the military. Rare earths including ttrium and terbium are also used for laser targeting and weapons. Cerium is used in catalytic converters and as polishing media for optical lenses on the battlefield. Lanthaum is used in cameras and night vision lenses.(12)
Meanwhile, China is Using Its Stronghold as the “Ultimate Weapon”
Most recently, China threatened to cut us off yet again.
For example, in recent weeks, China threatened to sanction firms including Lockheed Martin, Boeing Defense, Raytheon as well as individuals and entities that are involved in arms sales.(13)
One of China’s options in this situation is to choke rare earth to Lockheed Martin for example, knowing that F-35 fighter jets and Patriot missiles must have rare earth supply.(14)
Unfortunately, this isn’t the first time China has threatened such action.
And it won’t be the last…
The U.S, and the world for that matter is quickly waking up to that threat, finally realizing we must have a safer, far more secure rare earth supply.
In short, running short on supply just isn’t an option for us, or the world for that matter.
It’s Why Washington Has Revived Plans to Secure Rare Earths
At one point, the U.S. was the market leader in rare earth minerals.
In fact, until the 1990s, the Mountain Pass mine in the Mojave Desert was THE key source of major rare earths for the world. That was, until 2002, when it was shut down thanks to stringent environmental regulations.
Around that time, the U.S. business of extracting rare earths was exported to other countries, where environmental damage was safely out of sight, and out of mind.
And for a while that was ok…
But as relations between Washington and Beijing break down, the U.S. is supporting the resurrection of the Mountain Pass, and companies that can produce supply. The U.S is very well aware that a safe and secure supply of rare earths from outside China is essential at this point. The Trump Administration has already defined rare earth as a critical resource. And there’s a bill in Congress that could provide tax incentives for rare earth miners.
We’re also well aware that Canada has some of the largest knowns reserves and resources of rare earth supply in the world. In fact, according to the Government of Canada, there’s an estimated 15 million tonnes of rare earth oxides.(15)
With a tiny market cap of approximately $7.52 million, upside for this company could be outstanding.
After all, Defense Metals is well-positioned to meet demand for North American-sourced critical REE’s with one of the highest grade road accessible deposits, with potential to reduce the political and strategic risk of current reliance on Chinese REE sources.(16)
The mineral-rich exploration company is currently focused on its 1,708 hectare Wicheeda Rare Earth Element Project located near Prince George, British Columbia, Canada.(16)
And so far, drill results indicate large-scale, higher grade mineralization.(16)
In fact, the company just indicated mineral resources of 4,890,000 tonnes averaging 3.02% LREO (Light Rare Earth Elements), and inferred resources of 12,100,000 tonnes averaging 2.90% LREO; representing a 49% increase in overall tonnage and 30% increase in average grade.(16)
Even better, the Wicheeda Property is strategically positioned alongside a major forestry services connected to Highway 97. Plus, there’s major infrastructure with major hydroelectric power lines, major gas pipelines, and a Canadian National Railway line in the nearby village.
In addition, the Company has an option to acquire 100% of the Wicheeda Rare Earth Element (REE) Property.
Even more impressive:
- The company is in discussions with several potential offtake partners in Japan, in the U.S., and in Canada that are interested in its concentrate.
- It just completed an internal scoping study and based on our findings have commenced working towards a PEA which we have recently financed and will be completed Q1 of 2021
- In addition, a recent merger of Mountain Pass and Fortress Value Acquisition Corp. merger is exciting for Defense Metals Corp. too since it has a very similar geological make up. That merger news combined with the company’s low capex could make Defense Metals Corp. a potential takeover target. To date, Defense Metals has spent $1mm on metallurgy and built a pilot plant that produced 1200 kilos of a high-grade concentrate that is very similar to Mountain Pass. Mountain Pass, by the way, will be valued at approximately $1.2 billion while Defense Metals is valued at just $10 million.
Further good news on providing reliable rare earth could be exceptionally bullish and rewarding for Defense Metals Corp. (CAN:DEFN)(US:DFMTF)
The company also just announced the Government of Saskatchewan announced $31 million in funding for a Rare Earth Element Processing Facility in Saskatchewan.
Craig Taylor, CEO of Defense Metals commented:
As Global Demand for Rare Earth Increases, So Has Interest in Defense Metals Corp.
With increased demand, and a threat China could cut our access to these critical minerals at any time, Defense Metals Corp. (CAN:DEFN)(US:DFMTF), investors have grown far more interested in the company.
In fact, here’s a one-year chart.
Since the stock bottomed out on March 25 at $0.07, it shot to a high of $0.25 just two months later, good for a return of approximately 257%. The fact that the stock has now pulled back to an oversold $0.18 makes this opportunity even more exciting. In addition, after finding triple bottom support at $0.14 over the last few months, we’re seeing a series of higher lows.
According to BarCharts, they have a 100% BULLISH signal on the stock. Specifically, the bullish indicators include the 20-day moving average, the 20-50 day MACD oscillator, 20-100 day MACD oscillator, 20-100 day MACD oscillator, the 50-day moving average, the 50-100 day MACD oscillator, 50-150 day MACD oscillator, 50-200 day MACD oscillator, the 100 day moving average, the 150 day moving average, the 200 day moving average, and the 100-200 day MACD oscillator. These are the highest bullish ratings on the site for this stock. (18)
Defense Metals Corp. is Also Led by a Powerhouse Team
With significant potential industry growth, a “Hall of Fame” level management team of experienced executives and a significant advantage, Defense Metals Corp. (CAN:DEFN)(US:DFMTF) is very well prepared for the future.
CEO & PRESIDENT
Since 1994 Mr. Taylor has been President and CEO of Vanville Projects Ltd., a private company which provides products and services to resorts, hotels and restaurants worldwide. From March 2008 until December 2016, Mr. Taylor was a director of Saber Capital Corp., a former capital pool company, which completed its qualifying transaction and was renamed Emblem Corp. In addition, he was a director of Advantage Lithium Corp., a TSX-V listed junior exploration company, from March 2007 until August 2016. From April 2012 until April 2016, he was a director of Clear Mountain Resources Corp., a TSX-V listed junior resource exploration company (now named Patriot One Technologies Inc.). Also, from February 2006 until July 2010 Mr. Taylor was the CEO, CFO, president and a director of Angus Resources Inc., a former capital pool company listed on the TSX-V which in 2010 completed its qualifying transaction and was renamed Batero Gold Corp. Mr. Taylor has also served as director and officer of several other public companies engaged in mineral exploration and development.
CFO & DIRECTOR
Ryan Cheung, CPA, CA, has been providing accounting, management, securities regulatory compliance services to private and public-listed companies. Mr. Cheung also serves as an officer and/or director of a number of public-listed companies. Mr. Cheung holds a Bachelor of Commerce degree from the University of Victoria and is a member of the Chartered Professional Accountants of British Columbia.
Mr. Andrew S. Burgess, C.A., C.P.A.is a Chartered Accountant and a Certified Public Accountant. He is currently the CFO of Spectrum Mining Corporation. He is an experienced professional with more than 35 years accounting, finance and financial reporting experience with listed companies. Mr. Burgess has a broad base of experience with natural resource, service and industrial companies in the areas of general management, financial and management reporting, taxation, corporate reorganizations, investments, acquisitions, divestitures, equity and debenture financing, budgeting, investor relations and administration. He has extensive public company and IPO experience.
KRISTOPHER J RAFFLE
P.GEO & DIRECTOR
Kristopher J. Raffle, B.Sc., P.Geo. serves as the Qualified Person for the Company. Mr. Raffle is also a current director of First Legacy Mining Corp. (TSXV: FLM). Mr. Raffle is a Partner and Principal Geologist with Edmonton-based geologic consulting firm APEX Geoscience Ltd. Mr. Raffle has over 18 years’ North American-focused base and precious metals exploration experience. APEX has wide-ranging Nevada Carlin-type gold experience, including near-mine exploration at Scorpio Gold Corp.’s Mineral Ridge Project; NI 43-101 reporting for Battle Mountain Gold Inc.’s Lewis Project and Barksdale Capital Corp.’s Swales Project; consulting and geological modeling for NuLegacy Gold Corp.’s Red Hill Project; in addition to completion of multiple Mineral Resource Estimates for Gold Standard Ventures Corp.’s Pinion, Dark Star, and North Bullion deposits within their flagship Railroad Project. APEX’s current Nevada activities include modelling and resource estimation work for several projects on behalf of Waterton Global Resource Management Inc., and Fiore Gold Ltd.’s Gold Rock Project.
Mr. Sali has been in the capital markets for 10 years managing private family assets. He is the president of Baccarat Investments Inc., a private company providing consulting and management services to public companies along with investing.
M.SC, P. GEO. & ADVISOR
Mr. Knox has worked in the exploration and development of carbonatite and REE deposits since 1984, first with Molycorp Inc., at the time the owner of the producing Mountain Pass, California, light REE mine, and later as an independent consultant for various public and private companies and projects throughout North America. Mr. Knox was part of the team that discovered the Kipawa heavy-enriched REE deposit in southwest Quebec, as well as the Ashram light-enriched REE deposit in northern Quebec. He has extensive experience in carbonatite/REE geological environments and has also worked on the Oka carbonatite complex near Montreal and the Prairie Lake carbonatite in northwestern Ontario, among others.
P.ENG & ADVISOR
Mr. Graf was born in Cranbrook, B.C. and graduated from Mount Baker high school in Cranbrook in 1969. He obtained a B.Ap.Sc. degree in geological engineering from UBC in Vancouver, B.C. in 1974 and has been registered as a Professional Engineer with the Association of Professional Engineers of British Columbia since 1980.He has successfully applied his profession for the past 40 years, conceiving and conducting mineral exploration programs in British Columbia, Alberta and Yukon as well as northern Mexico. His forte has been mineral property evaluation, field exploration and diamond drilling.Mr. Graf was a director of the BC and Yukon Chamber of Mines during the 1990’s when the provincial NDP were in power. During his tenure he was very involved in the Chamber’s Aboriginal Affairs and Environmental/Park committees trying to mitigate the NDP’s overly ambitious land use policies that were largely negative for mineral exploration in BC.In 2011, Mr. Graf was the recipient of the Chamber’s Frank Woodside Past Presidents Award for distinguished service to the Minerals Industry.
Mr. Leland earned his commission in US Army in 1998 as a graduate of the Reserve Officer Training Corps program at Norwich University. He served as an US Army Air Defense Officer focused on Short Range Air Defense for eight years, and has participated in multiple combat tours supporting Operation Enduring Freedom and Operation Iraqi Freedom (OEF/OIF) operations in Saudi Arabia, Qatar, and Iraq. After leaving the service in 2006, Mr. Leland has been employed with companies across both industry and defense contracting sectors.
Dale Wallster is a geologist and prospector with 40 years’ experience in North American mineral deposit exploration. He was president and founder of Roughrider Uranium Corp., a company acquired by Hathor Exploration Limited in 2006 for its strategically located uranium properties in the Athabasca Basin. Dale and his team are widely credited in the mineral exploration sector for the discovery of the Hathor’s Roughrider deposit. In January 2012, Hathor became a wholly-owned subsidiary of Rio Tinto as part of a CAD$650 million acquisition.
KARL T. WAGNER
Karl Wagner is the Founder and CEO of Eastern Sky Technologies, a global risk consultancy specializing in crisis management and corporate resilience. He also serves as Senior Vice President for Security, Custody Digital Group. An expert in intelligence and national security affairs, Karl has created and led multi-million dollar enterprise risk management programs in both government and private industry. Karl served as Senior Director, Global Security at Palo Alto-based Tesla, Inc. from September 2018 to April 2019. He is a former member of CIA’s Senior Intelligence Service (SIS), having served as a CIA senior leader and a Directorate of Operations (DO) expert manager, with 29 years of worldwide experience, including service in Latin America, East Asia, South Asia, the Middle East and North Africa.
He is a recipient of the CIA’s Distinguished Career Intelligence Medal (2017), the National Intelligence Exceptional Achievement Medal (November 2013), the DO Excellence in Leadership Award (2012), 4 Meritorious Unit Citations and 20 Exceptional Performance Awards.
Further information about Defense Metals and its Wicheeda Rare Earth Elements Project is available under Defense Metals’ profile on SEDAR (www.sedar.com).
Source 1: https://foreignpolicy.com/2020/05/25/china-trump-trade-supply-chain-rare-earth-minerals-mining-pandemic-tensions/
Source 2a: https://www.globenewswire.com/news-release/2020/09/01/2087264/0/en/USA-Rare-Earth-Commends-Bipartisan-Bill-Introduced-in-the-U-S-House-of-Representatives-to-Encourage-Domestic-Rare-Earth-Production.html
Source 2: Verbaan, N., Bradley, K., Brown, N., and Mackie, S., 2015 A review of hydrometallurgical flowsheets considered in current REE projects. In: Simandl G.J. and Neetz, M. (Eds.). Symposium on Strategic and Critical Materials Proceedings. November 13-14, 2015, Victoria, British Columbia Ministry of Energy and Mines, British Columbia Geological Survey Paper 2015-3, pp. 147-162
Source 3a: https://www.realclearenergy.org/articles/2019/03/14/the_future_of_electric_vehicles_depends_on_stable_us_rare_earth_minerals_production_110405.html
Source 3: These are commercial operations and the results of Defense Metals’ current results are from controlled lab testing and are not comparable
Source 4: https://defensemetals.com/wp-content/uploads/2020/11/Defense-Metals-Corporation-Corporate-Presentation-Nov-10th-2020.pdf
Source 5: https://www.globaltimes.cn/content/1204683.shtml
Source 6: https://www.reuters.com/article/us-usa-trade-china-rareearth-explainer/u-s-dependence-on-chinas-rare-earth-trade-war-vulnerability-idUSKCN1TS3AQ
Source 7: https://www.smh.com.au/world/asia/australia-s-race-against-china-s-rare-earths-weapon-20200825-p55p8s.html
Source 8: https://www.forbes.com/sites/oliverwyman/2019/05/15/as-more-evs-hit-the-road-blackouts-become-likely/?sh=556134a1dc30
Source 9: https://www.edisongroup.com/edison-explains/electric-vehicles-and-rare-earths/
Source 10: https://www.powertransmission.com/newsletter/0212/rare.htm
Source 11: https://www.livemint.com/technology/tech-news/from-iphones-to-cars-to-tvs-rare-earths-are-there-in-many-consumer-products-1559188995590.html
Source 12: https://defensemetals.com/wp-content/uploads/2020/11/Defense-Metals-Corporation-Corporate-Presentation-Nov-10th-2020.pdf
Source 13: https://www.wsj.com/articles/china-to-sanction-u-s-weapons-makers-over-taiwan-sales-11603708713
Source 14: https://www.globaltimes.cn/content/1204683.shtml
Source 15: https://www.nrcan.gc.ca/science-data/science-research/earth-sciences/earth-sciences-resources/earth-sciences-federal-programs/rare-earth-elements-facts/20522
Source 16: https://defensemetals.com/wp-content/uploads/2020/11/Defense-Metals-Corporation-Corporate-Presentation-Nov-10th-2020.pdf
Source 17: https://www.newswire.ca/news-releases/defense-metals-announces-saskatchewan-s-first-rare-earth-element-processing-facility-817615178.html
Source 18: https://www.barchart.com/stocks/quotes/DEFN.VN/opinion
This document includes certain statements that constitute “forward-looking information or statements” within the meaning of applicable securities law, including without limitation, Defense Metals’ expectations for its deposit, plans for its project, as well as other statements relating to the technical, financial and business prospects of Defense Metals and other matters. Readers are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements. Forward-looking statements address future events and conditions and are necessarily based upon a number of estimates and assumptions. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Forward-looking statements are subject to a variety of risks and uncertainties, which could cause actual events, level of activity, performance or results to differ materially from those reflected in the forward-looking statements, including, without limitation: (i) risks related to rare earth elements, and other commodity price fluctuations; (ii) risks and uncertainties relating to the interpretation of exploration results; (iii) risks related to the inherent uncertainty of exploration and cost estimates and the potential for unexpected costs and expenses; (iv) that resource exploration and development is a speculative business; (v) that Defense Metals may lose or abandon its property interests or may fail to receive necessary licences and permits; (vi) that environmental laws and regulations may become more onerous; (vii) that Defense Metals may not be able to raise additional funds when necessary; (viii) the possibility that future exploration, development or mining results will not be consistent with Defense Metals expectations; (ix) exploration and development risks, including risks related to accidents, equipment breakdowns, labour disputes or other unanticipated difficulties with or interruptions in exploration and development; (x) competition; (xi) the potential for delays in exploration or development activities or the completion of geologic reports or studies; (xii) the uncertainty of profitability based upon Defense Metals history of losses; (xiii) risks related to environmental regulation and liability; (xiv) risks associated with failure to maintain community acceptance, agreements and permissions (generally referred to as “social licence”), including local First Nations; (xv) risks relating to obtaining and maintaining all necessary government permits, approvals and authorizations relating to the continued exploration and development of Defense Metals projects; (xvi) risks related to the outcome of legal actions; (xvii) political and regulatory risks associated with mining and exploration; (xix) risks related to current global financial conditions; and (xx) other risks and uncertainties related to Defense Metals prospects, properties and business strategy. These risks, as well as others, could cause actual results and events to vary significantly. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, continued availability of capital and financing and general economic, market or business conditions, the loss of key directors, employees, advisors or consultants, adverse weather conditions, increase in costs, equipment failures, government regulations and policies, litigation, decrease in the price of REE, the impact of Covid-19 or other viruses and diseases on the Company’s ability to operate, failure of counterparties to perform their contractual obligations and fees charged by service providers. Investors are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements.
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