Medallion Resources shares surge as it notes recent rare earth price rise

Medallion Resources Ltd (CVE:MDL) (OTCQB:MLLOF) (FRA:MRDN) shares zipped up on Thursday as the group noted the recent rapid rise in magnetic rare earths prices as it awaits a key techno-economic assessment of its planned extraction plant in the US. Medallion has developed a process to achieve low-cost, rare-earth element (REE) production by exploiting monazite, which is widely available as a by-product from mineral sand mining. READ: Medallion Resources starts technical assessment of its proprietary rare earths extraction process In November this year, the company said it had hired an independent Australian engineering consultancy to complete a techno-economic assessment of  its Medallion Monazite Process, which will provide commercial capital and operating cost estimates for the extraction facility. "Driven by high growth forecasts for electric vehicles (EVs), wind energy and electronics that require substantial volumes of high strength REE permanent magnets, the price of magnetic REEs have moved rapidly upwards in recent months. The price for neodymium (Nd) and praseodymium (Pr), together called "NdPr", has risen almost 50% this year to $65/kg after averaging $41/kg for the last decade," Medallion told investors in a statement. "As all major automakers have committed to rolling out new EV and hybrid models, Swiss Investment bank UBS recently forecast NdPr pricing to move to $100/kg by 2025." Medallion's proposed plant is expected to produce around 3,500 tonnes year of rare-earth products, including around 800 tonnes per year of the magnet metals NdPr, which is key in the powerful and lightweight traction motors that propel electric vehicles (EVs) such as Tesla's (NASDAQ:TSLA). Mark Saxon, Medallion's CEO said: "With current and projected pricing of NdPr we expect the economics from our independent techno-economic assessment to look very positive. "We welcome approaches by prospective business partners as we progress towards final design and engineering." MP Materials Inc (NYSE:MP), which went public last month, produces around 15% of global rare earth output from Mountain Pass in California, and has rekindled investor interest in the space, noted Medallion, along with Texas Mineral Resources (OTCPK:TMRC) and Lynas Inc (ASX:LYC) the integrated Australian-Malaysian REE producer. MP Materials is the only operating REE mining and processing site in North America, and today ships a mineral concentrate to Shenghe Resources Holding Co Ltd (Shanghai: 600392) in China for processing. The US producer plans to use recently-secured capital to extend its operations downstream to include extraction, separation, and marketing of separated light REEs. Medallion is working closely with its trading and logistics partner Talaxis Ltd along with their permitting and transport networks to ensure commercial volumes of mineral sand monazite are available to meet Medallion's execution timeline. Medallion Resources shares in Toronto added 25% on the day to C$0.25 each. Contact the author at giles@proactiveinvestors.com