Ucore rallies on U.S. rare earth consortium news

Ucore Rare Metals Inc. [UCU-TSXV, UURAF-OTQX] shares rallied Monday after the company said it has partnered with U.S. firm Materion Corp [MTRN-NYSE] to respond to an open U.S. Government solicitation for a strategic assessment of the domestic heavy rare earth element market [HREE], in conjunction with an engineering evaluation of the viability of HREE separation capabilities at various sites within the U.S.

Rare earth elements are a group of 15 elements with tongue-twisting names like Neodymium, Terbium and Dysprosium, and which are vital to green technology and high-tech applications. They fall into two sub-groups: light and heavy, with the heavies being scarcer.

Since the U.S. relies on China, the dominant global supplier, for about 80% of its rare earths imports, security of supply became an issue at the beginning of this decade when China imposed export restrictions, a move that sparked renewed investor interest in the sector.

Security of supply re-emerged as a concern earlier this year when China President Xi Jinping paid a visit to a rare earth’s facility in Jiangxi, China. Bloomberg News described the visit as a scripted move that aimed to send a signal about what China might be prepared to do next in a trade war with the U.S.

China has dominated the rare earths industry for 30 years and there is little indication that this will change any time soon, industry officials say. Now, with a dramatic increase in demand for rare earth magnets needed to drive electric transportation and produce clean energy solutions, the industrial world remains exposed to Chinese dominance.

“Ucore and Materion together offer the U.S. Federal government a single-source solution to meet the urgent need for a domestic HREE supply chain,” said Ucore President and CEO Jim McKenzie.

On Monday, Ucore and Materion said they have signed a memorandum of understanding to establish a rare earth consortium for the purpose of preparing and submitting a bid to the U.S. Industrial Base Analysis and Sustainment program. The consortium expects that its bid will represent the only Heavy REE supply chain option to be fully sourced and controlled within the U.S.

Ucore is a development-phase company with a focus on rare metal resources, extraction and benefaction technologies with near term potential for production growth and scalability. The company has a 100%-ownership stake in the Bokan-Dotson Ridge Rare Earth Project in Alaska.

According to the company’s website, the Bokan property is particularly enriched with heavy rare earth elements, including the critical elements Dysprosium, Terbium and Yttrium. Approximately 40% (by weight) of the rare earth elements contained on the Dotson Ridge property are heavy rare earth elements, the company said.

However, Ucore said it is aiming to transition to become a leading nanotechnology company that provides mineral separation products and services to the mining and mineral extraction industry. The vision includes the development of a strategic metals complex in Ketchikan, Alaska, and the development of the company’s rare earth minerals property located at Bokan Mountain in Alaska.

The company recently said it established a project-specific advisory team for the purpose of designing its heavy rare earth element solvent extraction plant and processing capabilities in southeast Alaska.

Based in Ohio, Materion is a supplier of advanced materials to global markets. Its portfolio includes high performance alloys, beryllium products, clad metal strip, composite metals, ceramics, inorganic chemicals, microelectronics packaging materials, precision optics, thin film coatings and thin film deposition materials.

“Ucore’s broad experience in the REE technology markets and comprehensive work in analyzing multiple separation technologies and feedstock sources, along with the significant financial support of the State of Alaska, make us a natural choice for domestic HREE development,” McKenzie said.

“Materion’s extensive background in U.S. Government contracts, together with more than 60 years’ experience in advanced solvent extraction technologies and existing sales presence across American advanced materials markets, makes for an unparalleled partner in this important initiative,” he said.

Ucore, through its U.S. subsidiary, Landmark Alaska L.P., will be the project manager of the initiative, with Materion providing metallurgical processing, supply chain design and advisory functions.

Ucore shares rallied on the news, rising 13.5% or $0.025 to 21 cents on active volume of 2.1 million. The shares are currently trading in a 52-week range of $0.085 and 33.5 cents.

Materion shares advanced 0.52% or US30.5 cents to US $59.30. The shares trade in a 52-week range of US$42.50 and US$71.97.