Investor Alert - Rare Earth Mining Sector Alert for Defense Metals (TSX-V: $DEFN.V) (OTCQB: $DFMTF)

 

Vancouver, British Columbia - December 9, 2020 (www.waternewswire.com) Media alert for Defense Metals Corp. (TSX-V:DEFN / OTCQB:DFMTF/ 35D: FSE). The company was featured in the following article and interview:

Full article and Original source
https://stockhouse.com/opinion/interviews/2020/12/08/rare-earth-elements-set-to-take-centre-stage

Oliver Gray, The Market Herald

When it comes to the lucrative world of mining, the long-standing stars of the show are gold and silver - particularly this year with a pandemic-driven spike in gold prices to an all-time high of more than US$2,000 per ounce.

But one sector, which to date has garnered little mainstream attention, is starting to make some noise.

Rare earths, according to geologists, are not necessarily rare but precious, particularly for their use in military, technological and electric vehicle applications.

North America had previously been a champion of the industry, with some of the world's largest players, but production gradually shifted to China in the early 2000s.

It began in 1997 when Magniquench was sold to an investment consortium spearheaded by Archibald Cox, Jr. - the son of the Watergate prosecutor by the same name - with two Chinese state-owned metals companies, San Huan New Materials and China National Nonferrous Metals Import and Export Company. Inevitably, Magniquench was shut down in the United States and moved to China, re-opening there in 2003.

Molycorp was then left as the last remaining rare earths producer of any significant scale, but ultimately collapsed in 2015.

Since then, China - with its low labour costs, less concern for environmental impacts and generous state subsidies - has grown to account for 97 per cent of global production.

But, with a global shift away Chinese dependence, there appears to be a greater emphasis on the return of the rare earths industry to North America.

At the start of October, Ellen Lord, Under Secretary of Defense for Acquisition and Sustainment, gave a testimony to the Senate Armed Services Subcommittee on Readiness and Management Support:

"A U.S. rare earth mineral strategy should ... consist of national stockpiles of certain rare earth elements, re-establishing rare earth mineral processing in the U.S. by implementing new incentives and removing disincentives, and [research and development] around new forms of clean rare earth mineral processing and substitutes. We will need your help," she said.

The next day, U.S. President Donald Trump signed an executive order declaring a national emergency in the mining industry, with a view to "incentivising the domestic production of rare earth minerals critical for military technologies while reducing American dependence on China."

Before that, Nevada-based MP Minerals - owner of the Mountain Pass rare earths mine in California's Mojave desert, the largest rare earth project in North America - signed a deal in July this year to list on the New York Stock Exchange through a $1.5 billion merger with Fortress Value Acquisition Corp. That deal has now been approved by Shareholders.

So, what does all this mean for Canada's rare earth sector?

If you're Defense Metals (TSXV:DEFN, OTC:DFMTF, FRA:35D, Forum), it means a great deal. The Vancouver-based company owns the Wicheeda Project, located roughly 80 kilometres northeast of Prince George British Columbia, which bears many of the same characteristics as the prolific Mountain Pass mine[1].

A 30-tonne bulk sample from the project was sent to SGS Canada in Lakefield, Ontario, for metallurgical and processing test work, which returned a pilot plant concentrate grade averaging 51.6% LREO (Light Rare Earth Oxide) and an average recovery of 77.3%[2]. These results, which were published in September 2020, put among a select group of rare earth deposits capable of producing a greater than 50% LREO flotation concentrate, including Mountain Pass which boasts a concentrate grade of 60%[3].

In addition to a world-class rare earth deposit, Defense Metals has the benefit of an experienced leadership team led by President and CEO Craig Taylor, which includes Alex Knox - an advisor to the company - who previously had a hand in exploration and development activities at the aforementioned Molycorp.

We spoke to Craig to see what the impending return of North American rare earth production means for the Defense Metals and for the broader industry itself.

Thanks for taking the time to speak with us today, perhaps you could give us a brief introduction to Defense Metals and its operations?

Sure, and thanks for having me Oliver, first off, Rare earth isn't rare, but being able extract it from the rock and have the infrastructure to deliver a viable product is extremely RARE! Through its recently updated NI 43-101 mineral resource estimate, Defense Metals has shown that the Wicheeda REE Deposit exhibits reasonable prospects for future economic extraction, while large-scale floatation pilot plant metallurgical testing demonstrates our ability to produce a potentially saleable high-grade REE mineral concentrate with options for continued refining and separation to purified rare earth oxide product.

Our deposit is located 70 kilometres north of Prince George BC, Canada, a highly skilled mining hub city. The infrastructure is spectacular. We have amazing road access, electricity, water, and CN Rail only 30 Kilometres away! So that's what separates us from the rest of the crowd in the rare earth space. Moving towards completing our Preliminary Economic Assessment (PEA) we expect Wicheeda's favourable location will have a positive impact on our capex, relative the majority of other Canadian REE projects that are typically located far from existing infrastructure. We are a primary NdPr (neodymium-praseodymium) deposit, which are critical elements in lightweight high-strength permanent magnets used in the green energy, EV and military / national security markets, which are growing due to the anticipated widespread adoption of EV's, and as trade wars continue to escalate between China and the US/ Canada, Japan, Europe, and Australia.

The results from the Wicheeda Project's 30-tonne bulk sample put the deposit up there with some of the world's most promising - what does this potential mean for the long-term path of the project?

We are extremely happy with the results of bench scale hydrometallurgical and flotation pilot-scale testing of our bulk sample. First and foremost, we have shown the ability to produce a very high-grade >50% rare earth mineral concentrate, which is something many other Canadian REE projects struggle to achieve. The downstream hydrometallurgical process is expected to benefit significantly from this quality of flotation concentrate grade. We have already seen the benefits in our bench scale hydrometallurgical test work which achieved 90% REE recoveries from concentrate[4].

Since those results were published, the Wicheeda Project has been the focus of additional exploration activities. Has that changed the outlook for the project at all?

Click to enlargeThe fall 2019 drill program was perfect, something I've never seen, a 13 for 13 drill program with mineralization in every hole and significant expansion potential to the north remaining. The 2020 indicated mineral resources of 4,890,000 tonnes averaging 3.02% LREO (Light Rare Earth Elements), and inferred resources of 12,100,000 tonnes averaging 2.90% LREO; represented a 49% increase in overall tonnage and 30% increase in overall average grade, compared to the maiden 2019 resource estimate[5]. Our updated resource estimate and the results of subsequent internal scoping studies have given us the confidence to pursue a PEA, which we hope to release by end of Q1, 2021. Looking ahead to future project development we also initiated baseline environmental monitoring in anticipation of future project applications.

With a recently completed financing, Defense Metals is working towards the completion of a preliminary economic assessment for the Wicheeda Project. How will that change the development of the deposit?

Oliver, we are quite excited about moving towards completion of a PEA as we are finally going to be able to put a value to the company, not just our market cap. With Neodymium and Praseodymium prices increasing steadily of the last 6 months, we are expecting extremely positive results. We are targeting as a base-case a potential 15 year mine life at 2 million-tonne/year throughput. Let's not forget our deposit remains open to expansion to the north, therefore step-out and infill drilling presents opportunities to increase the size of and confidence in our deposit moving forward.

In late August, the Government of Saskatchewan unveiled $31 million in funding for a rare earth element processing facility, how does that benefit Defense Metals?

For Canada and Saskatchewan this a first ever opportunity for Canada to start processing REE's and compete with China and increase North America's need for critical minerals and reduce our reliance on China.

What does a NYSE listing like that of MP Minerals' mean for the North American rare earth sector?

Great question. MP Materials, 1.4 Billion valuation and listing has been a huge lift for the entire REE market. Essentially creating a barometer for REE interest. Large smart money has taken MP material to numerous all-time highs from their recent listing last week. If you're interested look at our DEFN news dated November 16th, 2020, Defense Metals Applauds Planned Advancement of North American REE Supply Chain with Fortress-MP Materials Merger.

Has the increasing focus on North American production changed Defense Metals' strategy in any way?

Yes, this new focus really moves us up the ladder, we believe access to infrastructure, high grades, and favourable metallurgical test results places the Wicheeda REE Deposit no.1 in Canada and top 3 in North America.

Thanks again for your time, is there anything you'd like to add before we finish?

Do your due diligence, the facts will speak for themselves, we are extremely under-valued, now is the time to invest in DEFN, thanks Oliver.

About Defense Metals Corp. https://defensemetals.com/

Defense Metals Corp. is a mineral exploration company focused on the acquisition of mineral deposits containing metals and elements commonly used in the electric power market, military, national security and the production of "GREEN" energy technologies, such as, high strength alloys and rare earth magnets. Defense Metals has an option to acquire 100% of the 1,708 hectare Wicheeda Rare Earth Element Property located near Prince George, British Columbia, Canada. Defense Metals Corp. trades in Canada under the symbol "DEFN" on the TSX Venture Exchange, in the United States, under "DFMTF" on the OTCQB and in Germany on the Frankfurt Exchange under "35D".

For further information, please contact:

Todd Hanas, Bluesky Corporate Communications Ltd.

Vice President, Investor Relations

Tel: (778) 994 8072

Email: todd@blueskycorp.ca

Forward Looking Information

This news release contains "forward‐looking information or statements" within the meaning of applicable securities laws, which may include, without limitation, statements relating to finding partnerships, securing potential offtake agreements, and other business opportunities, the technical, financial and business prospects of the Company, its project and other matters. All statements in this news release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of rare earth elements, the ability to achieve its goals, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed and on reasonable terms. Such forward-looking information reflects the Company's views with respect to future events and is subject to risks, uncertainties and assumptions, including those filed under the Company's profile on SEDAR at www.sedar.com. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, continued availability of capital and financing and general economic, market or business conditions, adverse weather conditions, failure to maintain all necessary government permits, approvals and authorizations, failure to maintain community acceptance (including First Nations), decrease in the price of rare earth elements, the impact of Covid-19 or other viruses and diseases on the Company's ability to operate increase in costs, litigation, and failure of counterparties to perform their contractual obligations. The Company does not undertake to update forward‐looking statements or forward‐looking information, except as required by law.

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