Inflationary Thoughts, and What to Do as Things Unfold

Inflationary Thoughts, and
What to Do as Things Unfold
Like many people (perhaps like you, dear reader), I’m a
creature of habit.

For example, when I buy something in a store I always ask for
a receipt. Or I hit the button for a receipt if it’s one of
those self-serve dispensers, like with fuel pumps at a gas
station. Then I fold the receipt and drop it into the left
pocket of my trousers. See? Habit.

Later, I empty my pockets, take the receipts, and stuff them
into an envelope on my desk. The idea is that I’ll sort them
later for taxes. Except I hardly ever do that last part.
Staying organized for taxes is not a habit, I guess.

At any rate, this short, personal confession is my way of
introducing a quick discussion about inflation, currently over
8.5% per no less than the U.S. Government. And it’s likely
even more than that number because I believe that government
bureaucrats badly misperceive and understate reality.

So, here’s what happened. The other day I was cleaning my desk
and found a stash of gasoline receipts from about a year ago.
Back then it cost about $35 to $40 to fill the fuel tank of my
car.

Lately, though, it costs me about $70 to $75 to fill my gas
tank. That’s about 80% more than a year ago.

Same car. Same fuel tank. My driving habits are about the
same. Same roads. Same trips to the store, errands, etc. Same
everything, except that it costs me much more to fill the
tank.

There’s a reason for this, of course. A year ago, the price of

oil was nestled in the range of $65 per barrel. Today it’s
north of $110. Do the math, right? The price of oil controls
the price of motor fuel. Oil up, gasoline up; cause and
effect.

Meanwhile, rising prices for energy – oil, gasoline, diesel –
explain a big whack of why the rate of inflation is high and
increasing, not just at the fuel pumps but at the grocery
store and pretty much everywhere else.

Inflation is up because the global supply of energy is tight,
which is certainly the case for oil, and also the scenario for
much else in the arena of fuels.

And energy demand is up due to a global recovery from Covid.
More people want more and more energy. And due to the massive
levels of government spending over the past couple years,
there’s money out there to chase it.

In other words, demand/people/money are chasing – or more
precisely, “cornering” – a relatively static supply of oil,
hence higher prices to clear the market.

All this, while higher costs for energy flow through to
everything.

Higher energy costs affect what you pay to drive your car, and
what it costs farmers and processors to produce food and other
goods, and what it costs manufacturers and shippers to create
and move everything, and eventually deliver it to stores where
people buy it all.

In this regard, inflation is now truly structural. That is,
inflation is built into the entire economic system. It’s
deeply rooted in the fundamentals of energy availability, and
how much energy costs its end-users.

Now, consider a follow-on point to what we just discussed.
That is, absent a lot of additional energy miraculously

showing up and hitting the system (hint: very unlikely) the
whole situation will remain bad, if not get worse.

However bad you think it is now – high prices at the gas pump
or supermarket – it’s about to hurt even more. There’s no
relief in sight, unless you’re one of those well-insulated
people who want to see a major global recession to, as the
saying goes, “destroy demand.”

The takeaway here is that inflation is structural. So stand by
for more of it. Stand by for higher prices. Stand by for your
dollars to buy less and less, while your quality of living
declines.

And okay, one more takeaway, with an upbeat angle. Looking
ahead, hard assets – real things like metals and energy
resources – will not only hold their value through the coming
storm, but preserve and create wealth for the holders.

On that last point, invest accordingly.

That’s all for now…   Thank you for subscribing and reading.

Imperial   Mining’s  Quebec
scandium play is aluminum’s
best friend
To me scandium sounds like it should be a country between
Finland and Sweden in the Baltic Sea, but then again a lot of
people have considered some of my thoughts pretty strange.
However, scandium is becoming a critical metal of growing
importance in aluminum alloys for auto, commercial aircraft,
military armor and EV development, significantly reducing

weight and manufacturing costs. It’s used as a hardener and
strengthener of common aluminum alloys, which are also heat
and corrosion resistant. Its weight reduction applications in
the automotive, aerospace, fuel cell and defense sectors in
turn help reduce the overall carbon footprint by making
aircraft and vehicles lighter and more fuel-efficient with
lower emissions. Because of these tremendous applications,
demand is expected to grow considerably from the current 35
tonnes per annum of product availability to western markets to
as high as 2,000 tonnes by 2040.

Source: Imperial Mining Group Corporate Presentation

Obviously, I don’t need to comment on the importance of supply
chains, “on-shoring”, etc. in light of what the world has seen
over the last year or two. We’ll suffice it to say that
domestic is better. Which leads us to today’s topic of
conversation – Imperial Mining Group Ltd. (TSXV: IPG | OTCQB:
IMPNF). Imperial is a Canadian mineral exploration and

development company focused on the advancement of its Crater
Lake scandium-Rare Earth property led by an experienced team
of mineral exploration and development professionals with a
strong track record of mineral deposit discovery in numerous
metal commodities. The Company also has a pair of gold
prospects, Opawica and La Ronciere all in Quebec.

However, what makes Crater Lake so special is that it is the
only hardrock scandium deposit in the world and happens to be
in the mining friendly jurisdiction of Quebec, close to
hydroelectric capacity and Quebec’s aluminum metal production
where 90% of Canada’s “Green” aluminum is produced. As well,
it is looking like Bécancour in Quebec is becoming Canada’s
battery cathode manufacturing hub with recent announcements
from BASF regarding a cathode active materials and recycling
site to support North American producers in their transition
to e-mobility and General Motors and POSCO Chemical’s $400
million facility to produce cathode active materials for
vehicle batteries. It would appear that Imperial could borrow
a line from the real estate business and say their project is
all about location, location, location.

Source: Imperial Mining Group March 15, 2022 Press Release

It also doesn’t hurt that Crater Lake already has 43-101
compliant resource estimate. In September Imperial received
the inaugural NI 43-101 Technical Report for the Crater Lake
TG Zone Mineral Resource Estimate.

Source: Imperial Mining Group Ltd. press release Sep 23, 2021

The results of the Resource Estimate for the Northern Lobe of

the TG Zone far exceeded the minimum threshold resource
Imperial internally set for a 20-25-year notional mining
operation, or 10 million tonnes. And the good news is
mineralization remains open laterally and at depth,
demonstrating the potential to increase the mineral resource
with additional drilling.

The Company has plenty of catalysts over the next several
months to keep the news flow coming for investors. Work on a
43-101 Preliminary Economic Assessment (PEA) on the TG Zone
scandium-rare earth zone resource is progressing and is
expected to be completed in the next few weeks. A diamond
drill program on the TG Zone (Northern Lobe and Southern Lobe)
will commence in late June with up to 22 diamond drill holes
for approximately 2,500 m. In addition, there is excellent
potential to expand the mineral resources with further
drilling on the Southern Lobe. In late Fall 2022, the new
drill hole data from the summer program will be forwarded to a
consultant to revise and update the previous 43-101 Resource
Estimate of the TG Zone. This revised resource will allow
Imperial to move forward with a Pre-Feasibility (PFS) or
Feasibility (FS) Study.

During Summer 2021, Imperial collected a 50-tonnes bulk sample
for use in a pilot plant study. It is expected that the
remaining 32-tonnes will be shipped to Sept-Iles, QC by the
end of July 2022 to be used in a pilot plant study to further
test and optimize Imperial’s patent-pending metallurgical
process method. Additionally, Imperial has commissioned a
hydrometallurgical flowsheet development program based on its
patent pending two-stage hydrometallurgical method for the
extraction of scandium and rare earth elements with SGS
Canada. The program, which started on January 31, 2022, is
partially financed from a $245,355 grant from the Quebec
Ministry of Energy and Natural Resources with expected
completion at the end of Q3 2022. Results from the work will
aid in the engineering design of Imperial’s pilot program for

the Crater Lake project for later in 2022.

As you can see, there is plenty on the go at Imperial Mining
Group and the good news is they started May with C$2.8 M in
working capital and virtually no debt. The Company currently
has a market cap of C$14.7 million representing plenty of
opportunities for a potential domestic supplier of an up and
coming critical material.

Jack Lifton, Byron W. King
and Ur-Energy’s John Cash
explore the future direction
of   the  American   uranium
industry
In this episode of Critical Materials Corner, Jack Lifton and
Critical Materials Corner Co-Host & InvestorIntel Columnist
Byron W. King speak with John Cash, CEO of Ur-Energy
Inc. (NYSE American: URG | TSX: URE).

John explains that Ur-Energy is today producing yellowcake,
the commercial form of uranium, by the environmentally
friendly method of “in-situ” mining, which he explains. Ur-
Energy then processes the mine output to commercial
yellowcake.

John rounds out the discussion by defining the size of the
American domestic market for uranium. He tells us where and in
what form uranium for domestic American civilian use
originates; what parts of the domestic American uranium supply

chain are deficient; and whether or not America can ever have
a secure domestic supply of uranium for its largest in the
world civilian nuclear electricity generation industry.

This is a must-see video for all of those interested in green
energy self-sufficiency for America.

To access the complete episode of this Critical Materials
Corner discussion, click here

About Ur-Energy Inc.

Ur-Energy is a uranium mining company operating the Lost
Creek in-situ recovery uranium facility in south-central
Wyoming. We have produced, packaged, and shipped approximately
2.6 million pounds U3O8 from Lost Creek since the commencement
of operations. Ur-Energy now has all major permits and
authorizations to begin construction at Shirley Basin, the
Company’s second in situ recovery uranium facility in Wyoming
and is in the process of obtaining remaining amendments to
Lost Creek authorizations for expansion of Lost Creek.
Ur‑Energy is engaged in uranium mining, recovery and
processing activities, including the acquisition, exploration,
development, and operation of uranium mineral properties in
the United States. The primary trading market for Ur‑Energy’s
common shares is on the NYSE American under the symbol “URG.”
Ur‑Energy’s common shares also trade on the Toronto Stock
Exchange under the symbol “URE.” Ur-Energy’s corporate office
is located in Littleton, Colorado and its registered office is
located in Ottawa, Ontario.

To learn more about Ur-Energy Inc., click here

Disclaimer: Ur-Energy Inc. is an advertorial member of
InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp.,
(IIC), does not contain, nor does it purport to contain, a
summary of all the material information concerning the

“Company” being interviewed. IIC offers no representations or
warranties that any of the information contained in this
interview is accurate or complete.

This presentation may contain “forward-looking statements”
within the meaning of applicable Canadian securities
legislation. Forward-looking statements are based on the
opinions and assumptions of the management of the Company as
of the date made. They are inherently susceptible to
uncertainty and other factors that could cause actual
events/results to differ materially from these forward-looking
statements. Additional risks and uncertainties, including
those that the Company does not know about now or that it
currently deems immaterial, may also adversely affect the
Company’s business or any investment therein.

Any projections given are principally intended for use as
objectives and are not intended, and should not be taken, as
assurances that the projected results will be obtained by the
Company. The assumptions used may not prove to be accurate and
a potential decline in the Company’s financial condition or
results of operations may negatively impact the value of its
securities. Prospective investors are urged to review the
Company’s profile on Sedar.com and to carry out independent
investigations in order to determine their interest in
investing in the Company.

If you have any questions surrounding the content of this
interview, please contact us at +1 416 792 8228 and/or email
us direct at info@investorintel.com.

Ur-Energy,   Hedging   the
uranium supply against the
chaos of war
The big question right now is what will Putin do next? Last
week U.S President Biden banned Russian oil and gas imports.
Will Russia respond by banning uranium exports to the USA?
That would certainly cause a huge drama given that Russia
largely controls the uranium market (41% of supply from
Kazakhstan, 6% from Russia) and the USA’s dependence on
uranium to power 19% of the electricity grid and a significant
part of its navy which is nuclear powered.

In anticipation of a possible Russian uranium export ban or
supply shock, the uranium price has been moving higher since
the war began. At the current uranium price of US$60/lb the
outlook for uranium producers is looking dramatically
improved.

Uranium prices have spiked higher since the Russia-Ukraine war
began on February 24, 2022

Source: Trading Economics

Ur-Energy Inc. (NYSE American: URG | TSX: URE) is among the
top two U.S uranium producers (when operational). Ur-Energy
operates their flagship Lost Creek ‘in-situ recovery’ uranium
mine and facility in south-central Wyoming, USA. The Lost
Creek Mine and facility has been on care and maintenance
awaiting higher uranium prices. Ur-Energy also owns several
other projects including the Shirley Basin Project
(construction ready), Lucky Mc Mine, and Last Soldier uranium
projects in the USA as well as the Excel Gold Project in
Nevada, USA.

A summary of U-Energy’s uranium projects in the USA

Source: Ur-Energy website

The recent good news for Ur-Energy investors can be summed up
from the following two key announcements:

   1. November 1, 2021 – Ur-Energy announces Lost Creek
      development program to advance readiness to ramp up
     uranium production. Ur-Energy stated: “We are pleased to
     announce the commencement of a development program at
     Lost Creek that will advance us from reduced operations
     to full production-ready status…… As of October 27,
     2021, we had more than $40 million in cash and 285,000
     pounds of U.S. produced U 3 O 8 in inventory worth
     approximately $13.4 million, stored at the conversion
     facility.”
   2. March 9, 2022 – “The economic analyses within the Lost
      Creek report continue to support the potential viability
      of the property. Total future life of mine (LoM)
      production (without additional exploration) is modeled
      to be 12.3 million pounds from 2022 to 2036 with LoM
      operating costs estimated to be $16.34 per pound. All
      in, the estimated total costs per pound, including
      royalties and extraction taxes, is estimated at $33.61
      per pound before income tax of $8.72 per pound. Pricing
      used in the analysis ranged from $50.80 to $66.04 per
      pound……The Property has a calculated before tax internal

rate of return (IRR) of 72.2 percent and a before tax
      net present value (NPV) of $210.9 million applying an 8%
      discount rate. When income taxes are included in the
      calculation, the after-tax IRR is 66.8 percent and the
      after tax NPV is $156.8 million.”

Note: Bold emphasis by the author.

Lost Creek update

Minimal   controlled   production    continued   at   Lost   Creek
throughout 2021 in recognition of market conditions. Ur-Energy
has all required permits for operations within the first three
mine units at Lost Creek and expects to have the final permit
to allow operations within the HJ and KM Horizon at LC East
and additional mine units at Lost Creek this year. Ur-Energy
is in the process of obtaining remaining additional amendments
to Lost Creek authorizations for expansion of the Lost Creek
Mine.

Lost Creek recently received an amendment to its license
allowing expansion of mining activities within the existing
Lost Creek Project and the adjacent LC East Project. The
license now allows annual plant production of up to 2.2
million pounds U 3 O 8 , which includes wellfield of up to 1.2
million pounds U 3 O 8 and toll processing of up to 1 million
pounds U 3 O 8 . Additional approvals (as referenced above) for
this expansion are expected in H2 2021.

At the current uranium price of US$60/lb it looks highly
likely we will very soon hear an announcement of Lost Creek
production restarting.

Shirley Basin update

In addition to Lost Creek, Ur-Energy can bring on their
Shirley Basin Project. It has a before tax IRR of 105.6% and
NPV8% of $129.7 million. Ur-Energy has all major permits and
authorizations to begin construction at Shirley Basin, the

Company’s second in situ recovery uranium facility in Wyoming,
USA.

2021 year end results

Ur-Energy’s 2021 results are not important given that there
was virtually zero (251 pounds of U3O8) uranium production and
no sales. Ur-Energy reported: “As of December 31, 2021, we had
cash resources consisting of cash and cash equivalents of
$46.2 million. No sales of U 3 O 8 were necessary in 2021. The
Company had a net loss of $22.9 million or $0.12 per common
share.”

Ur-Energy, new CEO, John Cash stated:

“We are encouraged by the dramatic increase in domestic and
global support for nuclear power, as it is increasingly
recognized as the only plausible solution to climate change.
Ur-Energy is in the enviable position of being able to quickly
ramp up and participate in an improving uranium market and, in
addition, we could immediately deliver up to 284,000 pounds
U3O8   into   the   Uranium   Reserve   Program,   currently   being
established by the U.S. Department of Energy. On March 3,
2022, we had $44.7 million in cash, plus our ready to sell
U.S. produced inventory, worth approximately $14.4 million at
recent spot prices. Additionally, we continue to advance the
construction of header house 2‑4 to expedite production when
market signals allow us to ramp up at Lost Creek.”

Closing remarks

Uncertainty of uranium supply from Russia and Russian
controlled sources such as Kazakhstan is leading to a surge in
uranium prices, up almost 50% in the past 3 weeks since the
Russia-Ukraine war commenced.

At current prices, Ur-Energy’s two key projects Lost Creek and
Shirley Basin would be highly profitable as per recent
economic studies done at uranium prices similar to today’s

price. All of this means it is highly likely we will soon see
the resumption of uranium production by Ur-Energy at Lost
Creek Mine in the near term. It also times well with the
U.S.’s intentions to build up a reserve of uranium and the
recent White House Fact Sheet aiming to build USA supply
chains for key materials.

For investors looking at a hedge against the war, then look no
further than uranium. And if Putin bans exports of Russian
controlled uranium to the USA and others, then expect to see
uranium prices closer to US$100/lb, than to today’s price of
US$60/lb.

Ur-Energy trades on a market cap of US$380 million. Looks
appealing.

Looking Beyond USD for Gold
Note from Peter Clausi: On June 24, 2019 I originally
published this piece. Today, it is arguably even more
relevant; and as such are re-publishing for your review.

Gold is glittering again, having its strongest week since
April, 2016. Many reasons are offered for this long-expected
global run, including natural economic cycles, industry
consolidation, the new-normal of rape talk in The White House,
conflicts in the Middle East and trade uncertainties.

Whatever the reasons, a higher gold price has a trickle-down
impact on the junior exploration companies, the ones in the
field doing the high-risk heavy lifting to bring new projects
into development and production. It’s a well-known axiom to
search for gold in the shadow of a headframe, which is why
gold camps develop. You find gold near to where someone else

already found gold.

Many of these gold camps were historically in production but
became economically non-viable when the gold price fell below
all-in sustaining costs. I remember attending the world’s
greatest mining show, PDAC in Toronto, in 2001 when gold was
under USD$300 an ounce – a very grim time to be in the mining
industry! Mines and exploration projects were shuttered
because the anticipated revenue from the deposits was less
than the cost of running the mine, which left no cash for
corporate operations, and that’s not a recipe for success.

Those same projects will be back in play, likely in new hands
if gold is able to sustain this run.

PDAC 2012 was giddy as gold had hit its all-time high of
USD$1,900 per ounce the previous August. Projects with iffy
economics were being green-lighted to try to exploit that
price. We all know how that ended.

Gold is almost always quoted in USD. That’s the revenue
number, the price at which the producer can sell the gold.
What’s very interesting is that the majority of costs on a
gold project are incurred in local currencies, not USD, so
it’s important to track not only the USD sale price for gold
but the movements of gold in the local currency. If the
revenue number is up and gold is sold in USD, and the costs
are held steady and incurred in local currencies, the
opportunity exists for miners in those jurisdictions to
increase their margins. What were barely viable projects can
be made economically healthy due to exchange rates. This isn’t
another trick of accounting from those ivory tower theorists
under IFRS. This is the real world of real cash flow.

Look at Australia. The Frasier Institute recently pronounced
Western Australia to be the world’s second most attractive
mining jurisdiction. Gold there is not flirting with a mere
$1,400 an ounce. No, gold quoted in AUD hit an all-time high

of $2027 last week, and closed out the week above $2,000.
(Thanks to goldbroker.com for the chart below.)

This gives the Australian gold projects an advantage in
attracting foreign investment capital. If costs are incurred
in Australian dollars, and the inflation rate continues to be
under 2%, the expanded gross margins will see Australian
projects on a fast track. Previously worked mines that had to
be shuttered due to the fall in gold will be re-opened.

(Note this only speaks to gross margins. Australian mining
companies have the stereotype for being lifestyle companies
for their directors and management team, killing the net
margins. The shareholders must ensure that new investment
capital goes into the ground, not the Managing Director’s
pocket.)

Canada is in a similar position. Gold closed the week at
CDN$1,852, and Canada had an inflation rate of 2.4% in April,
2019. Low inflation plus a rising revenue number equals
renewed global interest in Canadian gold projects.

Saskatchewan finished third globally in that same Frasier
Institute report. Quebec, the Yukon, Northwest Territories

also made it into the Top 10 globally. Nunavut came in at 15,
Ontario at 20. Of the fifteen provincial or territorial mining
jurisdictions in Canada, six finished in the top 20 globally.
That’s impressive, and that’s why that same report ranked
Canada as the #1 mining jurisdiction on a national level
beating out (who else) Australia.

There’s more to gold than USD.

Christopher      Ecclestone
analyzes the Impact of the
Russian Invasion of Ukraine
on  the   Global  Resources
Markets
In a recent InvestorIntel interview, Tracy Weslosky spoke with
Christopher Ecclestone, Principal and Mining Strategist
at Hallgarten & Company about the impact of the Russian
invasion of Ukraine on the resource market.

In this InvestorIntel interview, which may also be viewed on
YouTube (click here to subscribe to the InvestorIntel
Channel), Christopher Ecclestone pointed out that Russia
produces a lot of minerals and metals, but that it is a key
producer of critical metals like nickel, cobalt, platinum and
palladium. Explaining how Russia is currently being cut off
from global markets, he went on to highlight the disruptions
in platinum and palladium supply given that Russia is among
the largest producers of those metals. Christopher went on to
discuss the impact of the European conflict on the rare earths

sector and on the Canadian resource companies with Russian
investment.

To watch the full interview, click here.

About Hallgarten & Company

Hallgarten & Company was founded in 2003 by the former
partners of a well-known economic think-tank. Their output
encompasses top-down and bottom-up research from a Classical
Economic (Austrian School) perspective. Over the years, the
team has successfully picked trends using macroeconomic
underpinnings to guide investors through the treacherous
waters of the markets. It was only natural, in light of the
focus of Classical Economics upon the “real value” of monetary
assets that the firm’s strengths should ultimately have become
evident in resources sectors and projections of commodity
trends.

Hallgarten & Company has advised and managed portfolios of
offshore and onshore hedge funds.

Hallgarten also provides consultancy services on Latin
American economic, politics and corporate matters including
the production of bespoke research.

Hallgarten research is now available on Bloomberg and FactSet.

To learn more about Hallgarten & Company, click here

Gold         market             experts                Jack

Lifton, Byron W King, Chris
Thompson and John Kontak
discuss   the  present  and
future gold market
In this InvestorIntel Gold Panel discussion, InvestorIntel
Editor-in-Chief & Publisher Jack Lifton and Geologist and
Newsletter Writer Byron King are joined by Chris Thompson,
President of eResearch Corp. and John Kontak, President and
Director of West Red Lake Gold Mines Inc. (CSE: RLG | OTCQB:
RLGMF) to discuss the present and future gold market.

With the theme of the discussion around gold as a secure asset
class, the panelists agree that the investment cycle may be
setting up for “…a very good day for gold is in the near
future.” To hear this InvestorIntel Gold Panel discussion,
click here

Leading rare earths junior
Appia adds a new uranium
claim    block   to    their
expanding asset portfolio
Two of the best-performing commodities in the past year have
been the key rare earth magnet material blend, neodymium,
praseodymium (NdPr), and the energy metal, uranium. Today’s
company has established itself as a leading rare earths junior

in Canada, but recently changed its name and expanded its
uranium portfolio. This means investors get exposure to both
the key magnet rare earths and also uranium. Even better, it
controls 3 projects/properties.

The Company is Appia Rare Earths & Uranium Corp. (CSE: API |
OTCQB: APAAF) (Appia) formerly known as Appia Energy, with its
Alces Lake rare earths project and its newly acquired uranium
mineral claim block (Otherside), as well as other uranium
properties located in Northern Saskatchewan, Canada, and its
Elliot Lake uranium and rare earths property in Ontario,
Canada.

Appia’s very high-grade rare earths project at Alces Lake

For background on Appia’s rare earths projects you can read
some past articles here which focus on Appia’s tremendous
asset at Alces Lake, Canada which has the 2nd highest average
rare earth’s grade in the world, at 16.65 wt% TREO. High-grade
zones are up to 49 wt% TREO. The rare earths are hosted in
favorable ‘monazite’ ore at or near surface spread over 27sq
km of tenements. There is a 23-25% Critical Rare Earth Oxide
(CREO) component, including neodymium (Nd), praseodymium (Pr),
dysprosium (Dy), and terbium (Tb).

Appia’s 100% owned Alces Lake Project has the world’s second
highest average grade of TREO

Source: Company presentation

Appia has access to use the Government funded Saskatchewan
Research Council (SRC) processing facility in Saskatoon,
Canada. Existing pilot facilities there(1,000 tpa capacity)
have already optimized a monazite processing flow sheet for
Appia. The SRC production-scale processing facility is
expected to be partially operational in early 2023.

Appia plans a smaller surface and near-surface operation to
start production with an open-pit scenario which is easier to
permit and manage and should have a low CapEx/Opex.

Appia’s latest results include:

     Drill results at Wilson North (Alces Lake) with average
     17.5 wt% TREO over 9.38 metres with up to 37.9 wt% TREO.
     High grade REE mineralization identified over an
     estimated 27 square kilometre area. Channel sample of

14.71 wt % TREO from Sweet Chili Heat and 11.94 wt %
     TREO from Diablo. 10.35 wt % TREO returned from grab
     sample at Zesty. 7.86 wt % TREO returned from grab
     sample along the Oldman River trend. New discovery of
     REEs with 2.27 wt % TREO grab sample from “Train
     Domain”. Elevated critical electronics metal, Gallium,
     values have also been returned for all samples enriched
     in TREO.
     Promising Results from Initial Metallurgical Tests on a
     Composite Sample from Alces Lake. Laboratory heavy
     liquid separation tests recovered 95% of the total rare
     earth oxide (TREO). Appia President Frederick Kozak
     stated: “TREO recoveries and the percentage of TREO in
     concentrate are comparable to other producing global
     rare earths projects, supporting the potential for Alces
     Lake as a future monazite rare earths supply.”

Appia is waiting on further drilling core and channel sample
assay results from the 2021 program. In terms of major near-
term catalysts, Appia states: “Analysis of 2021 drilling and
assays may lead to NI 43-101 report early 2022.”

Saskatchewan Uranium Properties

Appia recently announced that they significantly increased
their uranium claims by acquiring the Otherside claim block of
27,291 contiguous hectares. Appia states: “The claims were
staked on the basis of similar geological and geophysical
signatures to the Company’s Loranger property as well as other
known high-grade, large-tonnage uranium deposits in the
Athabasca Basin including Fission Uranium Corp’s Triple R
deposit, NexGen Energy’s Arrow deposits and others.”

Appia now owns 4 uranium properties/claims over a total of
69,344 hectares – Loranger, North Wollaston, Eastside, and
Otherside. The properties are well located with proximity to
infrastructure such as roads, highway, powerline, an airstrip
as well as two uranium mills. The properties are ready to

explore, with at or near-surface high-grade uranium, no
sandstone cover, and negligible overburden.

Saskatchewan Uranium Properties – Loranger, North Wollaston,
Eastside, and Otherside

Source: Company news January 10, 2022

Appia stated on January 10, 2022 that the next steps are:
“Appia has commenced the permitting process for a winter
drilling program on the Loranger property and anticipates
commencement of drilling in approximately one month, depending
on weather and permits. The Company is fully funded for this
program.”

Elliot Lake (Ontario, Canada)

Appia also has a 100% interest in 12,545 hectares (31,000

acres), with rare earth element and uranium deposits over five
mineralized zones in the Elliot Lake Camp, Ontario. The
Resource details are shown in the table below.

Source: Company presentation

Closing remarks

Appia is becoming a significant rare earths and uranium
junior. Appia now owns three very promising projects – Alces
Lake (very high grade and critical rare earths), Saskatchewan
Uranium Properties (Loranger, North Wollaston, Eastside, and
Otherside), and Elliot Lake (rare earths & uranium).

Appia trades on a market cap of C$54 million.

Will              Technology                    Metals’

Supply Meet the Demand for
EVs?
Since market economics’ common sense was codified by Adam
Smith in the 18th century, people have been aware of the fact
that the price for a good or service is what a willing buyer
will pay a willing seller. Of course, the seller must be able
to get the good or perform the service and the buyer must have
or be able to get the money. These last requirements seem to
have escaped the notice or understanding of the market
manipulators also known as Western politicians.

The global OEM transportation vehicle market is really not
free. It is being politically manipulated by climate change
politics, based on the belief that eliminating the carbon
dioxide output from the use of fossil fuels in vehicle
powertrains, based on internal combustion engines (ICEs) and
replacing them with onboard stored electricity in batteries
driving electric motors (BEVs) will have a significant
“positive” effect for humans on the earth’s climate. Whether
or not this cause-and-effect hypothesis is true the total
conversion of the world’s transportation fleet to battery
electric power is not possible for the size of the present
fleet and its projected growth. This is because the (battery)
technology metals necessary to effect this change simply do
not exist in sufficient quantities that are accessible to
mankind’s engineering abilities, willingness to deploy
capital, and the real global energy economy.

This supply limit will not become apparent until after 2025,
so it is being ignored as a problem easily solved by the
“efficient” market, whose actual strictures the political
class does not understand.

One clue about structural limitations, which politicians
either do not understand or do not believe, is that the

current Western commodity price inflation is driven by
efficient market supply shortages, which will automatically
correct from infinite supply resources, not by free market
excess (unsatisfiable) demand. Another, perhaps more
insidious, supply limitation is simply the price ceiling, the
maximum amount that the consumer can/will pay for a metal,
before that metal becomes too expensive for the intended use.
This is happening now, for aluminum, as soaring energy costs
in Europe, for example, force the shutdown of aluminum
electrolytic smelters, the production cost from which has
become more than the market price of aluminum. This was caused
by an entirely man-made shortage of electricity through sheer
political short-sightedness, not by the aluminum marketplace.

The politically driven demand pull for BEVs has already skewed
the lithium market by driving lithium prices high enough to
allow mines and sources, that would have been marginal or
worse, to appear to be economical and to develop. But lithium
prices are already too high for the continuing decline in
battery costs to achieve par with fossil-fueled engines in the
near term, if ever. The politicians’ answer to this is to
restrict fossil fuel production and make it more costly. Thus
a (n inflationary) price spiral has begun that could price
BEVs as well as reduced production, thus more expensive, ICEs
and their fossil fuels “out of the mass market!”

The structural metals and materials used to make vehicles used
for the transportation of people and freight can be, and
mostly are, recycled. This is driven by the fact that it takes
less energy to recycle structural metals than to produce new
material from mines. A significantly large proportion of the
iron, aluminum, copper, zinc, and lead used to construct new
vehicles is recovered each year from the recycling of end-of-
life scrapped vehicles. Cars in North America, have average
useful lives of 12 -17 years. The North American car “fleet”
is over 300 million vehicles and each year about 5% of the
fleet is scrapped. This means that enough iron, copper,

aluminum, and lead is recycled each year to build 15 million
new vehicles if 100% perfect recycling is assumed. It is
noteworthy that the recycling efficiency of the American
scrap, iron & steel, aluminum, copper and lead industries is
very high and that most American steel for automotive use is
made from scrap in, reliable, fossil or nuclear fueled
(electrical) baseload requiring, electric arc furnaces. The
North American OEM automotive industry considers 17 million
vehicles produced and sold to represent a good year, so it
does not have a problem sourcing structural metals for
components. In fact, enough new vehicles are imported into
North America that the need for structural metals for just
domestic production by the OEM American automotive industry is
met by just the metals produced from recycling.

So far, so good.

Now comes the not-so-good news about the technology metals
required for manufacturing automobiles. Today’s internal
combustion engine powered motor vehicles use, on average,
about 0.5kg of rare earth permanent magnets (REPMs), so the
annual need for such by the domestic OEM industry is between
6,000 and 8,500 tons of REPMs (here I assume that of the 17
million units sold each year up to 5 million are imports from
another country (including Mexico and Canada besides China,
Japan, Korea, Germany, France and the UK).

And, a Tesla Model 3, electric vehicle (EV) with the range
required by American buyers uses up to 5kg of REPMs, and 6-8
kg of lithium, measured as the metal, in its lithium-ion
rechargeable battery-based powertrain.

How many Gigawatt hours of lithium-ion battery storage for use
in EVs and stationary storage can be produced with the earth’s
known physically and economically accessible deposits of the
necessary critical materials? I was going to submit that
question as an abstract to a coming battery conference, but I
realized that the academics and bureaucrats, and corporate

researchers who attend the conference don’t have enough
background in industrial mineral economics to understand what
I want to say, and, in any case, don’t want to hear it.

Below is Bloomberg’s guesstimate of the demand growth for the
supply of all of the metals necessary to build (projected
levels of)    EVs through 2030. It is very important to
understand that the only increased demand for metals for
building EVs that matters are for those metals that are non-
structural, the EV Technology Metals. EVs will use no more of
structural metals in the aggregate than ICEs do, so that as
the ICEs are replaced by EVs, there will be no increased
demand for iron, aluminum, or zinc, and a marked decline in
the demand for lead as starter lead-acid batteries are phased
out.

Source

But those technology metals specifically required for an EV’s
powertrain, the battery and the electric motors will see a
dramatic increase in demand if and when EVs achieve a
significant market penetration.

For some reason, which I think is just ignorance, the major
news media “predictors” pay no attention to the distinctions
between the demand for structural metals, which will simply be
the same total, with the exception of that for copper, as is
used today unless the annual global total production of motor

vehicles increases dramatically, which is very unlikely.
Mature Western (and Japanese and Korean) domestic markets will
decline in demand as longer lived vehicles become necessities
due to price. This may well have a negative effect on
recycling efficiency for all metals as the scrap market re-
adjusts to lower supply and lower annual demand for new
vehicles.

EVs, however, as they replace ICEs will not increase the
demand for structural metals per unit, but it is the demand
for EV technology metals that could skyrocket, if that much
supply were possible.

To reiterate: The above chart is wrong with regard to iron and
aluminum demand for vehicles; they are a function of the total
number of vehicles built in a year, and, since Western markets
are mature in transportation vehicles, the demand for new iron
and aluminum for that use is unlikely to increase more than
25%, if that, to add new vehicle production, perhaps mostly
for the Indian and African home markets.

For EV Technology Metals the story is very different. An EV
uses about 50 kg of copper for its wiring harness, electric
motor windings, and lithium-ion battery internal circuitry.
This represents a 50% increase over the demand for copper in
an average ICE, so that the demand for copper for EVs could
add fifty percent to the overall demand for copper by the OEM
automotive industry today if and only if ICEs are completely
replaced by EVs. Thus, the factor for copper in the above
chart, 10X, should be 1.5X.

The potential demand growth for the most critical EV
Technology Metal, lithium, is the limiting factor in the
projected transformation of power trains from fossil fuels to
battery moderated electricity. Today BEV sales are reported to
be 3% of the global total vehicle sales. This is projected to
reach 10% by 2025, so that by 2025 at least three times as
much lithium will be needed to satisfy the demand for

batteries.

In 2021 some 86,000 tons of lithium, measured as metal, were
produced. 60% of that total was used to manufacture lithium-
ion batteries. Let’s call that 50,000 tons for batteries in
2021.The 36,000 tons of lithium used for non-battery uses is
unlikely to grow, so the necessary supply increase to satisfy
the needs for producing 10% BEVs in 2025 is 3x, for a total
demand in 2025 of 150,000 tons of lithium, measured as the
metal. Adding the 36,000 tpa of lithium demand for other uses
we get a total lithium demand of 186,000 tons for 2025, which
is essentially 2X 2021 total demand for lithium. This is most
likely do-able by the lithium mining industry, but the
downstream supply chain to turn 150,000 tons of lithium into
fine chemicals and battery electrodes does not now exist, and
although capacity increases may be planned it cannot be
determined how much will actually be constructed in time. This
is determined by the availability of capital, its proper
allocation, the availability of engineering skills, and the
availability of construction capacity. Although these can be
quantified, government interference, also known as regulation,
is the single largest time, and frequently capital, consuming
impediment to mining and process engineering in the West.

The   (mineral)   economic   illiterates   who   populate   our
universities and governmental bureaucracies live in a fantasy
world of infinitely available natural resources and their
unimpeded economic production. In that world, and only that
world, is a green energy transition possible without an
unacceptable decline in global standards of living, and the
creation of a have and have-not society on a global scale. Let
the UK’s current

Production and processing of the EV Technology Metals are and
will continue to be a good investment until a consensus is
reached about a balanced energy economy, in which fossil fuels
continue to be used for critical needs for which they are
irreplaceable. Continued production of EV Technology Metals

after that will be determined by price.

Critical   Material  Corner
experts debate one of the
most important minerals for
sourcing rare earths
In this episode of Critical Materials Corner, InvestorIntel
Editor-in-Chief & Publisher Jack Lifton and Geologist and
Newsletter Writer Byron King take on monazite — one of the
most important and desirable mineral ores for sourcing rare
earths. With guest Frederick Kozak, President of Appia Rare
Earths & Uranium Corp. (CSE: API | OTCQB: APAAF), Byron King
explains that while it is very rare to find a monazite
deposit, “it is extremely rare to find a really really good
monazite deposit…”

“One of the hottest rare earth deposits you will ever see
anywhere…” starts King, find out why Saskatchewan, Canada is
critical to the production of rare earths in North America.

To access the complete episode of Critical Materials Corner,
click here