SPONSORED

Our National Security and EVs Depend On Rare Earth Minerals- A Potential $14.4 Billion Industry(1)

We’ve Uncovered Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF), A Company Primed to Unleash as One of the Only Rare Earth Miners Nearing a PEA(28) Company At The Center Of This Potential

What do smartphones, hard drives, fluorescent and LED lights, flat-screen TVs, computer monitors, clean energy, EVs, batteries, defense technologies, and national security all have in common?(2)

Rare earth metals, or REEs (rare earth elements), are a group of 17 chemically similar elements crucial to many of the products mentioned above.

This could be the opportunity of a generation, though, for North American-sourced rare earths. All because of China’s stranglehold on the industry.

Do you have any idea what a critical national security threat this is? We are essentially relying on our biggest adversary for crucial minerals that keep our society and national security functioning.

Do you want a sustainable future along with your entire livelihood reliant on a country that “can leverage, through overproduction and price manipulation, to bankrupt their competition”? (4)

Didn’t think so.

That may be the reason why MP Materials, the largest producer of rare earth materials in the Western Hemisphere,(4) saw its stock price more than triple from $10.80 on Nov 02, 2020, to $31.51 at the close on Sep 23, 2021.(4)

Besides, MP reported blowout growth numbers on its latest earnings report on August 9, including revenues that more than doubled YoY to $73.1M and popped 141% year-over-year.(4)

Fast-forward to today…

We have uncovered a potentially explosive rare earth play that may not only follow in MP’s footsteps. It could be the most undervalued ground-floor play when it comes to North American sourced rare earths.

That company is Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF). With its 1,708-hectare Wicheeda Rare Earth Element (REE) Project located near Prince George, British Columbia, Canada,(3) this mineral exploration company could be the play in this space with the most game-changing potential.

Most importantly, this company anticipates putting out its PEA in mid-November, making it one of the only rare earth projects in all of North America with a PEA. Very few rare earth companies have achieved the completion of a PEA, and DEFN could be on the cusp. This is extremely, extremely rare, and quite special for a North America-based rare earth company to accomplish.

Some other advantages and potential catalysts that we came across for this company shocked us. And we’ve seen everything.

Reason #1- National Security Has Made Demand for North American-Sourced Rare Earths Generationally Critical

Why are North American-based rare earth miners like Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) so generationally important? China controls the market.

Its grip on the market is only getting tighter, too. Unless you are Xi Jinping, this is dangerous.

From mining to exports, America’s most potent competitor since the Soviet Union controls the market and holds the key to our sustainable future, national security, and daily lives.

China is believed to provide more than 85% of the world’s rare earths.(4) It is also home to roughly two-thirds of the world’s supply of rare metals and minerals.(4)

Calling this a national security crisis is an understatement.

Especially when you consider how essential rare earths are for defense applications.

When Afghanistan fell to the Taliban in August, that only made the need for North American-sourced rare earths even more desperate. As if the Taliban acquiring advanced American weapons wasn’t bad enough.

Now that the Taliban is back in power, China’s cozying up to them in an attempt to exploit Afghanistan’s nearly $1-$3 trillion war chest of rare earth metals.(9) China’s not even bashful about it either. Hours after the Taliban took over Afghanistan, a Chinese foreign ministry spokeswoman said Beijing was ready for “friendly cooperation with Afghanistan.” (9)

Shamaila Khan, director of emerging market debt at AllianceBernstein, added that the Taliban has emerged with resources that are a “very dangerous proposition for the world,” with minerals in Afghanistan that “can be exploited.”(9)

So riddle me this. Do you seriously want to depend on China and the Taliban for vital rare earths that our national security and defense rely on?

We are practically on our hands and knees groveling with an enemy that with rare earth supply “can leverage, through overproduction and price manipulation, to bankrupt their competition.”(10) According to Forbes, this could already be happening.(11)

If this status quo with China remains, we may soon reach “escape velocity” for rare earth demand. We could get to a point where annual demand growth exceeds over 6,000 tons a year, with supply unable to catch up.(12)

Many rare earth companies, including DEFN, will have to deal with China if North America doesn’t. It’s not entirely in DEFN’s hands, though. DEFN may have no other choice but to send its products for sampling and testing to the Chinese refineries because North America has little to no facilities for this. Governments are sleepwalking and not rushing in to help more.

So while DEFN prefers North America, they may have no choice. All potential roads seem to lead to China, which is not what anyone wants.

Does this not alarm you? If you don’t understand how important Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) is for your future, think about what it could mean for your children’s future.

Reason #2- The EV Industry’s Survival Depends On Rare Earths

Outside of national security and defense applications, the most critical usage for rare earths is electric vehicles (EVs) and green technology.

Consider these facts and figures:(3)

  • ​​​​Resulting growth in NdPr (Neodymium and Praseodymium) demand is forecast to drive a potential supply deficit by 2030.
  • IEA forecasts a 10 fold increase in EV adoption to 250MM vehicles worldwide by 2030.
  • In standard drivetrain motors, a typical EV uses between 1kg and 3kg of neodymium-iron-boron (NdFeB) magnets.
  • Every 10MM in new EVs requires an additional ~10,000 tonnes of NdPr or ~20% of the current annual global supply.
  • NdPr based magnets are found in 93% of all EV motors. Tesla, GM, Ford, VW, Hyundai, Toyota, and many others.
  • OEMs build vehicles using these magnets.

Neodymium is a mighty metal. The neodymium magnets in a typical EV weigh up to 3kg (6 lb). Still, even at 1/12th of that weight, a neodymium magnet can support heavy-duty steel and could have about 18 times more magnetic energy than the standard variety.(3)

Plus, even though the worldwide health situation has dented auto sales, demand for these magnets in electric vehicles shot up by 35% last year alone to 6,600 tons, according to Adamas Intelligence.(3)

The permanent magnets in hybrid and EV motors cost more than $300 per vehicle, or up to half the cost of the motor, analysts also say.(3)

Beyond this, those magnets are also in demand for wind turbines, global installations of which jumped 53% last year, according to the industry trade group.(3)

Not to keep beating down China’s bush, but come on- do you really want to rely on them for these supplies? Especially as China alone is responsible for over 27% of total global emissions, far exceeding the US. (Source 13) Mix that in with a U.N. report that just LAST MONTH called climate change “code red” for humanity, and we better get our act together- quickly.(14)

Don’t be naive. Be a realist.

There is no way to keep up with EV demand without reliable access to domestically sourced rare earth minerals from companies like Defense Metals Corp (TSXV:DEFN)(OTC:DFMTF). It’s laughable to think that we could effectively see the EV industry balloon into a $7 trillion global market by 2030 and a $46 trillion market by 2050 without them.(3)

UBS also forecasts electric models to make up half of the world’s new car sales by 2030, up from only 4% last year.(3) Without domestically sourced rare earths, this claim is equally humorous.

Reason #3- Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) and Its Wicheeda Project Could Significantly Supply Domestically-Sourced Rare Earths

Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) could be as well-positioned as anyone to meet the demand for North American-sourced critical rare earths. As tensions rise with China, the push for domestic rare earths has become a pillar of American foreign policy. With high-grade concentrate, Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) might be on the cusp of a generational opening to provide options for global offtake partners.

Defense Metals’ primary project is the Wicheeda Property. It has one of the highest-grade road-accessible deposits in rare earth mining and consists of approximately 6 mineral claims within roughly 1,708 hectares.(3)

Calling this project a potential game-changer is an understatement.

Not to mention, it’s located just about 80 km northeast of the city of Prince George, British Columbia.(3)

Defense Metals is advancing the Wicheeda REE Deposit through resource expansion drilling, metallurgical optimization, and initiation of environmental baseline studies. Already, the results look incredibly encouraging, with mineral resources of 4,890,000 tons averaging 3.02% LREO (Light Rare Earth Elements) and inferred mineral resources of 12,100,000 tons averaging 2.90% LREO.(16) This also represents a 49% increase in overall tonnage along with a 30% increase in overall average grade compared to the maiden 2019 resource estimate.

Positive flotation and hydrometallurgical test work also achieved a high-grade 50% LREO concentrate at >85% recovery. In addition, hydrometallurgical test work demonstrated 90% REE extraction with opportunities for further improvement.(3)

This project also poses several competitive advantages for the company, including:(3)

  • Top global jurisdiction in a location with infrastructure and easy access.
  • High-grade open pit resource with favorable host rock.
  • Conventional metallurgy – testing to date has yielded high-grade, potentially marketable concentrate.
  • Long-term strategic options to advance the project.
  • Seasoned management + technical team + board/advisors.

Most importantly, this project offers ground floor potential for vertical integration to support a rapidly growing market while reducing reliance on China.(3)

Just look how it compares to some of the top projects globally- especially several projects in China.

The 2021 Wicheeda drill program, which comprises 2,000 to 5,000 meters, focuses on expanding the zone REE mineralized dolomite-carbonatite to the north, and on further delineating existing inferred resources within the central and northwestern areas of the deposit.(29)

Why could this be so huge? The company anticipates putting out its PEA in mid-November which makes it one of the few rare earth projects in all of North America with a PEA.

We can’t stress enough how important this is. Very few rare earth companies have achieved the completion of a PEA, and DEFN could be on the cusp. This is extremely, extremely rare, and quite special for a North America-based rare earth company to accomplish.

“We’ve crammed an awful lot of work into two years – we have a 30-ton bulk sample, sent to Ontario for metallurgical testing,” CEO Craig Taylor said.(29)

We’ve seen even more recent progress, too. On Sept. 21, 2021, the company announced that the first drill hole of the 2021 campaign testing the North Zone of the Wicheeda REE Deposit intersected a 215-meter core interval of visually REE mineralized carbonatite. This is the longest carbonatite interval ever drilled at Wicheeda. The program is progressing on schedule and is currently on the 4th drill hole, with over 750 meters drilled to date.(16) Assay results have not been disclosed; drilling is ongoing.

Days later, on Sept. 29, 2021, the company provided an economic scenario analysis update on Wicheeda.(28) The purpose of this scenario analysis, led by SRK Consulting, is to evaluate the potential of multiple mine development scenarios through the completion of economic trade-off studies that will establish the basis for conducting a preliminary economic assessment (“PEA”).

Site visits for SRK resource and mining qualified persons (QP’s) have been scheduled for the 1st and 4th weeks of October 2021 to coincide with ongoing core drilling operations.

Already, SRK has accomplished several key elements that will inform the scenario analysis including:(28)

  • Detailed data review (completed at sufficient detail to ensure no fatal flaws)
  • Scenario definition (complete);
  • Evaluation of mineral processing, hydrometallurgy and separation costs (complete);
  • Pit optimization (complete)
  • Mine scheduling (in preparation)

The mine costing and economic modelling phases are subject to completion of the mine scheduling now underway. Subject to a successful scenario analysis, the PEA work will build on the scenario analysis, with the addition of further geology and resource review; process metallurgy Capex/Opex; infrastructure layout; wastewater management; social, environmental, and permitting aspects; marketing; economic analysis; and reporting.

Craig Taylor, CEO of Defense Metals, stated: “We are extremely pleased with the progress of the defined stages of the scenario analysis. Subject to successful results of the completed scenario analysis our goal is to be in a position to report our PEA to market by mid-November of this year.”(28)

Needless to say, Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) could have all the ingredients for some genuine, earth-shaking moves thanks to this Wicheeda Project. It could be at the right place, at the right time.

Reason #4- Its Most Recent Move- The Surging Uranium Space?

On Sep 23, 2021, Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) announced it was reevaluating its Athabasca Basin Uranium Projects.(17)

Shrewd move, ladies and gents. According to data by Markets Insider, as of Sep 17, 2021, the spot price of uranium is up 65.5% year-to-date(18)

The bottom line is this. Uranium has suddenly become one of the hottest commodities in the energy industry.

This is precisely the reason why the company announced an updated internal technical review of its Athabasca Basin uranium project holdings.(17)

During 2018, Defense Metals acquired 100% of the Geiger North and Klaproth projects for a combination of cash and share payments, with Geiger North being subject to a 2% net smelter return royalty. The projects comprise a total of five mineral claims totaling 9,363 hectares (ha) located in the northeast Athabasca Basin, with the Geiger North claims (1,233 ha) being in good standing until summer-fall 2022 and Klaproth (8,130 ha) in good standing until early 2023.(17)

The Geiger North and Klaproth projects are located approximately 35 kilometers northwest of the McClean Lake mine and mill, in a relatively under-explored area of the Athabasca Basin adjacent to the Wollaston-Mudjatik transition zone – a primary crustal suture related to most of the significant uranium deposits in the eastern Athabasca Basin.(17)

The Geiger North and Klaproth projects are surrounded by multiple major mining companies, giving the company a strategic foothold in a proven and prolific uranium mining district.(17)

Uranium mineralization in the northeast Athabasca Basin and the Geiger and Klaproth projects is typically associated with sheared graphitic-gneiss basement rocks that present as prominent conductive anomalies.(17)

Defense Metals is currently initiating an updated review of historical exploration within these projects.(17) The expectation is that the results of the data could form the foundation justifying renewed exploration. This may include the commissioning of project-wide airborne electromagnetic geophysical surveys to identify prospective basement conductive anomalies.(17)

In layman’s terms? Buckle up. This could be a huge deal. Especially when you consider that we may be seeing a renewed buzz around nuclear power as a clean energy alternative. According to Yahoo! Finance, “Next-generation nuclear power could be a hidden investment gem in the coming decades,” and how “nuclear energy provided 52% of America’s carbon-free electricity in 2020, making it the largest domestic source of clean energy, according to the U.S. Department of Energy.”(19)

Uranium is what powers commercial nuclear reactors that produce electricity. It is also essential to produce isotopes used for medical, industrial, and defense purposes around the world.(20)

So not only is Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) forward-thinking when it comes to the need for domestically sourced rare earths.

It’s thinking ahead to nuclear energy’s potential comeback. Nuclear energy could be the most overlooked clean energy opportunity in the market today. As it evaluates its uranium projects, Defense Metals could greatly capitalize on this.

Reason #5- The Stock, The Fundamentals, and Technicals Paint a VERY Pretty Picture

With the rare earth story seeing more and more traction, the DEFN stock has nearly doubled over the last 52-weeks. On Sep 30, 2020, it was trading as low as $0.15. Now, as we sit here after market close on Sep 24, 2021, we’re talking about a stock trading at roughly $0.28 a share. Do the math- that would be a move of approximately 86.67%. (Source 21)

Not to mention, over the last month, the stock’s moved approximately 33.33% from its Aug 24, 2021 low of $​​​​0.21 to its Sep 25, 2021 close of roughly $0.28.

Yet despite this impressive overall performance, it’s still a bit of a pullback from the peaks it saw earlier in 2021. If the demand surge continues the way it is for domestically sourced rare earths as a way to circumvent China, watch out. If the buzz keeps growing for uranium, watch out some more. This stock could be charging forward with a vengeance.

Especially when you consider that the stock has a float of just about 76.44M and a market cap of 22.5M as of September 23, 2021.(23)

In addition, several of its short-, medium-, and long-term technical indicators are showing bullish signals (as of Sep 23, 2021), such as its 20 Day Moving Average, 20 – 50 Day MACD Oscillator, 50 Day Moving Average, 100 Day Moving Average.(22)

Fundamentally, the company seems to have some things to like too. The company, as of September 23, 2021, had an Altman Z-Score of roughly 20.4.(24) This measurement is usually a good indicator of financial health and bankruptcy risk. Typically, companies want a score of 3, more or less.(25) This score would Defense Metals a figure over 6x greater than the target figure. That’s outstanding.

Plus, the company seems to have a current ratio of approximately 11.4x(26), and a quick ratio of nearly 10.5x(27). These figures indicate that DEFN can likely meet its short-term liabilities with more than enough current assets.

So to sum it up…

Those stock moves, technicals, and fundamentals add some meat to the bones.

Defense Metals isn’t your run-of-the-mill, slot-machine-like mining play. This is a company that not only is solving a critical national security threat. It’s at the forefront of a clean and sustainable future.

Want to cut out a hostile adversary from choking off the supply of our most essential minerals? Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) may be your company.

Want to be at the center of the EV boom? Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) may be your company.

Want a sustainable future with the potential for uranium’s importance to skyrocket? Well, then, Defense Metals Corp. (TSXV:DEFN)(OTC:DFMTF) may be your company.

Miners like this don’t come around often. But these guys could be at the perfect place in these unprecedented times. Momentum only seems to be heating up, so it’s time you pay closer attention before it’s too late.

About Defense Metals Corp.

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”.

 

Technical Report

National Instrument 43-101 Technical Report on the Wicheeda Property, British Columbia, effective June 27, 2020 and prepared by APEX Geoscience Ltd. (Steven J. Nicholls, B.A. Sc., MAIG and Kristopher J. Raffle, B.Sc., P.Geo) is available under Defense Metals’ profile on SEDAR (www.sedar.com).

Forward-Looking Information & Risk Factors

This document includes certain statements that constitute “forward-looking information or statements” within the meaning of applicable securities law, including without limitation, Defense Metals’ expectations for its deposit, plans for its project, completion of drilling and assay results, completion of the PEA and the expected outcomes, as well as other statements relating to the technical, financial and business prospects of Defense Metals and other matters. Readers are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements. Forward-looking statements address future events and conditions and are necessarily based upon a number of estimates and assumptions. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Forward-looking statements are subject to a variety of risks and uncertainties, which could cause actual events, level of activity, performance or results to differ materially from those reflected in the forward-looking statements, including, without limitation: (i) risks related to rare earth elements, and other commodity price fluctuations; (ii) risks and uncertainties relating to the interpretation of exploration results; (iii) risks related to the inherent uncertainty of exploration and cost estimates and the potential for unexpected costs and expenses; (iv) that resource exploration and development is a speculative business; (v) that Defense Metals may lose or abandon its property interests or may fail to receive necessary licences and permits;  (vi) that environmental laws and regulations may become more onerous;  (vii) that Defense Metals may not be able to raise additional funds when necessary; (viii) the possibility that future exploration, development or mining results will not be consistent with Defense Metals expectations; (ix) exploration and development risks, including risks related to accidents, equipment breakdowns, labour disputes or other unanticipated difficulties with or interruptions in exploration and development; (x) competition; (xi) the potential for delays in exploration or development activities or the completion of geologic reports or studies; (xii) the uncertainty of profitability based upon Defense Metals history of losses; (xiii) risks related to environmental regulation and liability; (xiv) risks associated with failure to maintain community acceptance, agreements and permissions (generally referred to as “social licence”), including local First Nations; (xv) risks relating to obtaining and maintaining all necessary government permits, approvals and authorizations relating to the continued exploration and development of Defense Metals projects; (xvi) risks related to the outcome of legal actions; (xvii) political and regulatory risks associated with mining and exploration; (xix) risks related to current global financial conditions; and (xx) other risks and uncertainties related to Defense Metals prospects, properties and business strategy. These risks, as well as others, could cause actual results and events to vary significantly. 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, the loss of key directors, employees, advisors or consultants, adverse weather conditions, increase in costs, equipment failures, government regulations and policies, litigation, decrease in the price of REE, the impact of the current health predicament or other diseases on the Company’s ability to operate, failure of counterparties to perform their contractual obligations and fees charged by service providers. Investors are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements.

Sources:

 

Source List

OTC:DFMTF
TSXV:DEFN
Company Contact

815 Hornby Street Suite 605
Vancouver BC V6Z 2E6 CA
+1 604 283-6110
https://www.defensemetals.com

What They Do

The NI 43-101 Technical Report on the Wicheeda Property is available at www.sedar.com

Defense Metals has an indicated mineral resource of 4,890,000 tonnes averaging 3.02% LREO and inferred resources of 12,100,000 tonnes averaging 2.90% LREO. It is an advanced mineral exploration company focused on metals and elements commonly used in the EV market, military, national security and the “GREEN” energy technologies, such as, high strength alloys and rare earth magnets. Defense Metals has an option for 100% of the 1,708 Ha., Rare Earth Wicheeda Property in British Columbia, Canada.