Asian Metal: Thanks for accepting the interview of Asian Metal, Dirk! Would you like to give a brief introduction of your company firstly?

Dirk: Thank you. Torngat Metals is a privately held company headquartered in Montreal, Quebec, Canada. We are preparing to be a supplier by 2023 of 11,500 tonnes per year of a full range of rare earth products, with a focus on the heavy and light rare earths required for permanent magnets. We are committed to the highest levels of sustainability at all stages in development and operation of the mine and the processing of finished products. 

Asian Metal: Would you please to introduce your Strange Lake project?

Dirk: Our Strange Lake project is based on developing our gadolinite miarolitic pegmatite rare earth resource located in northern Quebec, approximately 240 km northeast of Schefferville. After selective mining, we plan to beneficiate the ore onsite into a rare earth concentrate that will be shipped to southern Quebec for processing into high purity rare earth products for sale, both as separated and mixed rare earth products. Torngat has 274 mining claims totaling 10,941 hectares in the approximately 6 km diameter Strange Lake Alkalic Complex. We are currently focused on the area known as the B Zone, which has a 25+ year mine life. With future exploration, we are positioning Torngat to be a very stable and sustainable long-term supplier of rare earth products. 

Asian Metal: From what I understand, Strange Lake project is famous for being a huge rare earth resource. May I know what do you think as the project's other advantages? 

Dirk: Yes, it has been well known for years that Strange Lake is one of the world's biggest rare earth resources. We have a number of other significant advantages that make our project favored to be one of the resources that actually goes into production. One advantage is that our resource is high in rare earths with the greatest demand growth, particularly the heavy and light rare earths for permanent magnets. Our ore's rare earth composition is 4.1% of Dysprosium plus Terbium, and 15.8% Neodymium plus Praseodymium. Another advantage is that the rare earths in our ore are relatively easily liberated, enabling low and very competitive production costs. The Strange Lake Project also has the advantage of being in one of the most geopolitically stable regions that is also very supportive of resource development and mining, particularly in the northern regions where Strange Lake is located. 

Asian Metal: Developing a rare earth project is always a challenging work. Would you like to introduce what is the biggest challenge you are facing at the moment?

Dirk: Like many rare earth projects, and mining projects in general, our challenge is to access financing to match our stage of development. We are addressing this challenge by identifying the areas to work on that will add the most to the project's value and reduce its risks. This approach has driven our technical workplan for 2018, the results of which are that we have increased confidence in our mining, beneficiation and processing flowsheets and our new and significantly reduced cost estimates. 

Asian Metal: As far as I know, Torngat Metals did a lot of geological work in 2018. Could you share the latest results?

Dirk: Yes in 2018 we undertook a comprehensive review and reconstruction of our geological model, as well the mine site beneficiation flowsheet. Our focus is to aggressively drive down the capital and operating cost estimates and take full advantage of the unique mineralogy of our resource. Using our new geological model, the dominant rare earth-bearing minerals and their textures can now be related to the rare earth element grade of a rock type, unit, or subdomain. These relationships will be used to optimize mining and mineral processing plans. 

We have determined that the B-Zone contains an "enriched domain" which hosts the rock types, textures and minerals that contain the highest concentration of permanent magnet rare earths. The "enriched domain" can be divided into discrete subdomains that represent traceable zones with clearly defined contacts. The new geological model will enable selective mining of high-grade ore (50-100% head grade increase compared to previous estimates) for 25 years. 

We are currently conducting pilot testing with a composition sample indicative of the "Enriched Zone" to test the ease of liberation of rare earth-bearing minerals that are present as interstitial aggregates, along grains boundaries and in fractures. We are confirming that we will be able to remove more of the gangue material more quickly, at each processing step. We are testing a staged approach, allowing the simple liberation of rare earth-bearing minerals into the fine fraction, significantly reducing the cost of crushing and grinding. After removal of the initially easily liberated rare earth-bearing minerals, the coarser fraction is being piloted through X-ray transmission sorting, attrition milling, and magnetic separation. We estimate that we will be able to achieve a significant increase (200-300% compared to previous estimates) in the concentration of the rare earth concentrate that is shipped from Strange Lake. These developments are enabling us to significantly reduce the capital and operating cost estimates at mine site as well as for the processing plant in southern Quebec. 

Asian Metal: May I know what's the development prospect of Strange Lake in the coming years? 

Dirk: We are targeting rare earth production in 2023, matching rare earth demand growth forecasts. To get there, we are planning to share a preliminary economic assessment (PEA) in mid-2019 that captures the advantages from our new geological model and processing plans. The PEA will include a new resource classification. We will also be continuing our piloting of each stage of processing, using the ore we previously mined and have stockpiled. The piloting results will be fundamental to our Prefeasibility Study (PFS) that we plan to complete in 2020. 

Asian Metal: The global rare earth market was dim over the past years and current rare earth prices have backed to levels in Q3 of 2010. Taking PrNd mischmetal prices for example, current prices stand at USD56.7-58.2/kg FOB China, without much change from late July of 2010. May I know your opinion about the rare earth prices trend in the coming year?

Dirk: We will be watching whether rare earths will receive the level of attention that lithium has been receiving, since the demand drivers are the same for both. We will also be watching for stockpiling throughout the permanent magnet supply chain. Depending on these trends and unpredictable events (such as trade actions), we anticipate that prices will be relatively stable with an upward trend over the year. We anticipate that prices will become more volatile as the supply chain begins to implement plans for the expected increases in demand for permanent magnets. 

Asian Metal: It is well-known that the EV and HEV industries are the major driving downstream industries of PrNd. Would you like to share your opinion about the development prospect of EV and HEV industries in the coming years?

Dirk: We are at the point where everyone is forecasting significant adoption growth rates of EV and HEVs globally, the only difference between forecasts is in timing. With the momentum for fighting change increasing, it is becoming more likely that the more aggressive forecasts for EV and HEV adoption will be correct. Through regulatory drivers and consumer demand, automakers are preparing their lineups to feature a rapidly increasing number of EV and HEV models. They will be under pressure by shareholders to ensure their electrification strategies are successful and deliver expected financial returns, which means that EV and HEV sales will grow significantly. One of the key challenges will be for the supply chains to grow in tandem so that no supply or demand imbalances have an impact on growth of the EV and HEV market. Torngat is preparing to a part of the solution for the expected future rare earth supply challenges. Even with thrifting, substitution between rare earth elements and other technical developments, there will be supply challenges for some of the rare earths used in permanent magnets. Torngat plans to begin production in 2023, timing that lines up well with the rare earth supply gap that is anticipated. 

Asian Metal: Thanks for your time and support for Asian Metal. Wish you every success in your business.

Dirk: Thank you for the opportunity. We look forward engaging with your audience and to providing future updates as we continue to move our Strange Lake project towards production.