Peter Cashin, President and CEO of Quest Rare Minerals Ltd (TSX:QRM)
Strange Lake in North East Quebec is the site of a major Rare Earths find for Montreal-based exploration company, Quest Rare Minerals Ltd (TSX:QRM). Peter Cashin, President and CEO, talks to Metals News about what the resource can deliver.
Peter’s knowledge and experience is extensive. He holds a Masters of Science Degree, has worked for a number of mining exploration companies and also for the Ontario Ministry of Northern Development and Mines in the department of mineral resource promotion and marketing.
Quest Rare Minerals is the new name of Quest Uranium which was originally launched as a uranium exploration spin-off of the Freewest Resources Corporation. At this point, Quest only had restricted funds and so deliberately kept the size of their operations small and manageable.
As Peter puts it, “We had a very, very limited budget and in the first year we really took the time to cut back on the size of the property portfolio to ensure that we do pro-active exploration on a smaller amount of properties rather than reactive exploration with running after the government’s requirements for credits and renewals and work commitments …”.
One of the properties, called Strange Lake, was adjacent to a known Rare Earths resource discovered by the Iron Ore Company of Canada. Quest Uranium investigated the uranium there as their primary interest in 2006 and 2007. Following on from that, Quest’s geologists noticed something peculiar.
“In 2008, reconnaissance recognized there were some very, very strange and very high-grade values of Rare Earths within about a 10 km radius of the known deposits and so by 2009 we had done airborne geophysics over the area. We did some follow-up to that work and we discovered a significant deposit about 3 km away from the historical Iron Ore Company of Canada deposits and that’s led to the discovery of what we call the ‘B Zone’. And the B Zone is a very significant Rare Earths resource,” Peter tells us.
The B zone is well endowed with Heavy Rares with a registered rate of 60 - 65%. It is a growing resource with currently about 150m tonnes of resources - growing in terms of size as well as resource value.
Peter says confidently, “It is evident that we’ve only just scratched the surface.”
He is especially proud of his exploration team and attributes much of the company’s success to their efforts and strengths. Peter is keen to credit them for their part in the venture.
“My philosophy of advancing an exploration opportunity or even growing mineral discoveries has always been to ensure the technical integrity of the resource opportunities that we work and build them along such that the market will eventually catch on to the exploration success, and the way you do that is with a solid exploration team.”
He feels that a large factor in the potential success of the company is that the Chinese have admitted that they cannot sustain the rest of the Western World’s insatiable appetite for Rare Earths for their hard tech sectors.
“It’s almost like a forewarning to The West to say: “Look, start finding your own resources to satisfy your consumption requirements. We are going to satisfy our own primary needs first and foremost.”
Peter believes that Strange Lake will become a major and, possibly, even the sole source provider of the Rare Earth requirements certainly for North America and Europe, and possibly also for Japan. With continuing exploration success on the property through 2010 and beyond, the Strange Lake B-Zone Heavy Rare Earth deposit will rate as one of the most significant mineral discoveries, in North America, of the 21st Century.
Quest has increased the number of drill holes from 19 to about 100. They are now planning to take their 150m tonne resource from inferred to the measured and then indicated categories with a view to beginning a pre-feasibility study in March 2011 and concluding it by the end of the year.
Peter sees the main strengths of Quest Rare Minerals as being the large size of the company, the low cost of the mining, and the high proportion of heavy Rare Earth element deposits which will deliver to an important and under-served portion of the Rare Earth consumption sector.
On the timeline, which they have established, the predicted year of first production will be 2015 or 2016, which coincides with the period when the Chinese will no longer have surplus production for the Western World so that Quest can put Strange Lake forward as an alternative supply source.
They are well financed, with a $52m new issue of shares in October 2010 which was substantially larger than what they initially planned. This financing is intended for the delivery of various different concentrates of Rare Earths: Beryllium, Hafnium, Niobium, Yttrium and Zirconium.
Quest Rare Minerals Ltd is currently trading at $5.65 which compares very favorably with their price of about $3.00 a year ago. In fact, 2 years ago, it was possible to snap up their shares for a mere $0.03, making this an increase of over18,000%. Not a bad return. Their Market Capitalization stands at $330m and 58m shares have been issued or escrowed.
Peter feels that the best is yet to come if they can realize the full potential of what Strange Lake has to offer. The logical step would be to acquire refining capacity.
“We also recognize that you can add anywhere between 40 to 50% minimum premium to the value of the concentrates if you have the capacity for separation or refinement,” he says.
There are 2 ways to achieve this refinement, he explains. The first is to build a separation plant, for which the company would need to find a further $350m. The second is to develop a strategic alliance with another company which has this facility, possibly a company in Japan or Korea, he suggests.
With this additional string to their bow, their future as a sole source provider of Rare Earths would be even more assured.
SUMMARY
Quest Rare Earth Minerals Ltd is engaged on a major Rare Earths exploration project at Strange Lake in North Eastern Quebec. Peter Cashin, President and CEO, talks to Metals News about the company’s plans for becoming a major sole source provider of Rare Earths to meet the growing global demand. The Alper family owns Quest Rare Earth Minerals’ stock.
http://www.questrareminerals.com/