New on my Radar: Appia Rare Earths

A couple of weeks ago a pal called me and suggested I look into ionic adsorption clays. Great. What the heck are ionic adsorption clays? I was busy and didn’t get around to actually looking them up. Today my pal called again.

Appia Rare Earths and Uranium is, in fact, a company well worth looking into. Uranium in the prolific Athabasca Basis in Northern Saskatchewan, an Ontario property with an NI 43-101 compliant uranium and rare earth resource and, in Brazil, ionic adsorption clays on a fairly large property which is being advanced rapidly.

I am just beginning my due diligence on Appia (API.CNX) and I wanted to get a handle on ionic adsorption clays. Where better than my old friend and rare earths trader, Tim Worstall who has an excellent article on rare earths, their economics and why ionic adsorption clays offer significant advantages. It’s worth reading the whole thing but here’s a taste,

But it's the economics of ionic clays that matter here. Firstly, the capital requirement to mine is much lower. It's simply not necessary to mine at such scale as the more traditional hard rock mines, thereby reducing the entry cost. The actual process is much cheaper too - strip the overburden, wash the clay in an extractant, gain the rare earths in solution…

…Ionic clays as a concentrate source get around one of the biggest costs and problems in the whole process. Having to extract, at vast cost, that lanthanum and cerium from the concentrate. Materials that are worth around nothing currently (50 cents a kg is about right these days). Further, this problem is only going to get larger as rare earth production expands. In order to get that more Pr/Nd etc. then ever more La/Ce will have to be produced at that cost.

Yes, my head hurts too. However, the takeaway is that the production costs of desirable and valuable rare earths from ionic adsorption clays are a fraction of what they would be from more conventional hard rock sources.

Now I am off to do a bit of analysis of the Brazilian project. How big, how far advanced, what the mix of rare earths is (if that has been released) and how well set up Appia is to execute on the exploration and development of this project.

But this is a heads up.

Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.

I currently do not hold shares in API.CNX but I may acquire shares at anytime. ]