CEC Rare Earth Corp.

Report
CRITICAL RARE EARTH REFINING AND PROCESSING
CORPORATE OVERVIEW
December 2013
CONTENTS OVERVIEW
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Overview of Rare Earths and the market
Introduction to CEC Rare Earth Corp
The building of Rare Earth Refineries
Supply of Rare Earth Products
CEC Rare Earth Corp. Confidential
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KEY MESSAGES
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A significant gap exists for supply of Critical Rare Earth products and there is a race to
fill it – CEC Rare Earth has proven capabilities to build refineries for these products
The supply of these critical resources within the Western hemisphere will be highly
valued for re-establishing supply chains and industrial bases outside of China
A secure source of these strategic resources enables regional investment in related
industries and businesses
Rare earths contribute more to global climate change than any other factor – by
enabling clean technologies such as hybrid cars, alternative energies and cleaner
gasoline and diesel.
Contrary to typical commodities and metals (Gold, Silver, Copper) the largest value
add activities in Rare Earth products is the refinery:
– Ore – $1
– Concentrate - $5
– Refined Rare Earth Products - $20 -$100
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A major Rare Earth facility for Critical Rare Earth products established within 3 years
can be competitive with the largest RE companies globally in revenues & profits.
CEC Rare Earth Corp. Confidential
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Sources, applications, uses, demand and supply
RARE EARTHS AND THE MARKET
CEC Rare Earth Corp. Confidential
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WHAT ARE RARE EARTH ELEMENTS?
Light Rare Earth Elements (LREE)
Heavy Rare Earth Elements (HREE)
• 17 elements used for improved performance and quality
• Found combined together in mineral deposits
• Rare Earths are of little industrial value unless separated
CEC Rare Earth Corp. Confidential
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RARE EARTHS BACKGROUND
• Rare Earth mineral deposits
are not rare
• Commercially viable Rare
Earth mineral deposits are
rare
• Rare Earths separation
capability is extremely rare
outside of China
• CEC Rare Earth delivers
proven Critical Rare Earth
separation capability outside
China
CEC Rare Earth Corp. Confidential
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System
GREEN TECH APPLICATIONS
Wind and Hydro
Power
Generation
Neodymium
Praseodymium
Dysprosium
Terbium
Yttrium
Europium
Terbium
Neodymium
Praseodymium
Dysprosium
Terbium
Compact and
Linear Fluores cent Lamps,
LEDs, etc.
Neodymium
Praseodymium
Dysprosium
Terbium
CEC Rare Earth Corp. Confidential
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FOCUS ON THE CRITICAL REES
Heavies (HREEs)
Lights (LREEs)
Dysprosium (Dy)
Neodymium (Nd)
Terbium (Tb)
Europium (Eu)
Yttrium (Y)
Lutetium (Lu)
Praseodymium (Pr)
Cerium (Ce)
Lanthanum (La)
Samarium (Sm)
Gadolinium (Gd)
Holmium (Ho)
Erbium (Er)
Thulium (Tm)
Ytterbium (Yb)
CEC Rare Earth plants and our
partners will produce all of the
Critical Rare Earth products.
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GLOBAL SUPPLY SITUATION
Surplus or Deficit of major Rare Earths
2010
Source: IMCOA
2015
CEC Rare Earth Corp. Confidential
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An introduction and overview
CEC RARE EARTH CORP
CEC Rare Earth Corp. Confidential
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WHO IS CEC RARE EARTH CORPORATION?
• CEC Rare Earth Corporation is based in Vancouver, Canada with a
strong management team and key advisors from China’s Rare Earth
industry
• CEC Rare Earth team has significant experience in processing and
supplying Rare Earths
– Team members has many years of collective experience and have design and
built over 10 refineries inside and outside China
• CEC Rare Earth has two complementary business areas:
1.
Designing, Building and operating of Rare Earth Refineries outside of
China
2.
Supply of Rare Earth Products to top level industries outside of China
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CEC RARE EARTH’S KEY PEOPLE
Rojer Li (Managing Director)
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10 years experience in RE industry, extensive contacts in refining and international trading.
Li family business owns and operates the premier rare earth engineering and design company in China as
well they own, in whole or in part, four rare earth refineries inside and outside of China.
Bill Purcell (President & COO)
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Extensive experience in the downstream oil industry.
Strong background in environmental management
Peter Shearing (SR VP – Sales & Business Development)
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Broad international experience in the electronics and high-tech manufacturing industries.
25+ years of materials, electrical, and process engineering background
Apolo Ohno (Director)
Wide ranging international business experience with Fortune 500 companies; the most decorated
US Winter Olympian
Rod Jao (Director)
Global venture capital experience with a variety of industries including technology, manufacturing
and telecommunications.
Tracy A Moore (Advisor)
Extensive corporate finance experience in 20 countries, and CEO of REC’s strategic partner, Canada
Rare Earth, a public Canadian rare earth exploration company.
REC Confidential
Feb 2013
12
CHALLENGES & OPPORTUNITY
Global Rare Earth Supply and Demand Situation
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Global industry depends on China’s refineries (>90%) for Rare Earth products
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Demand for Rare Earth materials in new clean technologies and advanced applications is
growing and exceeding global output
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Prices reflect this supply gap and the lack of Western rare earth refining capability
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Non-China based companies demand new sources of Rare Earth supply outside of China to
support their business and products
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Establishment of Rare Earth refineries requires very specialized and hard to obtain expertise
and experience
The CEC Rare Earth Opportunity
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Unique team with technical expertise in the design, build and operation of Rare Earth
separation plants
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experience not available from other engineering companies
CEC Rare Earth’s advantage provides supply for its customers through highly valued off take
agreements to deliver significant revenues and profits
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CEC Rare Earth Corp unique capabilities and the advantages
BUILDING RARE EARTH REFINERIES
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CEC RARE EARTH ADVANTAGE
Turn Key Refinery Projects
– Proven expertise, experience and IP in design, construction and operations
– Lower project risks of design flaws, construction cost overruns, operating
problems and delays getting to market.
“Finding rare earths are only a small part of the process of turning the
ore into usable materials”
Dr. Steven Leeb
“Mining is the easy bit: Separating rare earth elements is where the
complexity comes in”
Kidela Capital presentation
“Mining is — believe it or not — the absolute easiest thing we do.
Once we pull it out of the ground, that’s when things get complicated,”
Mark Smith, MolyCorp past CEO
CEC Rare Earth Corp. Confidential
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VERTICAL INTEGRATION
• Buyers’ Rare Earth needs are matched to mine deposit
• Ingredients for a Joint Venture – mine, refiner, buyer
• Attractive to investors: pre-sold high value output, efficient
refinery
Buyers
• Specific element and quality specs
• Need secure, reliable supply
• Want reasonable, predictable prices
Separated oxides & metals
Refinery
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Efficient design:
Reliable supply of consistent raw materials
Known and pre-sold end product specs
Concentrate
Mine
• Extends the value chain beyond concentrate
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VALUE COMPARISON
CEC Rare Earth
Turn-key Separation Plant
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Fixed Price contract delivers a complete and
operating separation plant
Guaranteed startup success based on numerous
refinery startups
Proven ability to separate all Critical Rare Earth
Elements, production of specialty products,
Integrated process design and build team of
Rare Earth refinery experts
Operations training and support
Advantages with Turn-key
• Fixed Cost
• Proven ability to deliver quality
Rare Earth products
• On time completion
12-06-09
Typical
Engineering Project
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Estimated costs only for individual elements
(design, build, operate etc.), based on little to
no experience in REO separation
Little if any experience in the startup and
optimization of a REO separation plant
Individual process design, build, startup, and
operation teams with varying levels of RE
knowledge and experience
Engineering Project Risks
• Late startup
• Quality issues
• Budget overruns
Confidential: www.cecrareearthcorp.com
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CEC Rare Earth Corp Supply Chain
SUPPLY OF RARE EARTH PRODUCTS
CEC Rare Earth Corp. Confidential
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CEC RARE EARTH’S CHINA EXPORT SOURCES
• CEC Rare Earth has 4 primary
sources within China all who
have been inspected and
approved for the
environmental requirements
• Access to all RE oxides,
metals, and specialty
compounds for domestic
China requirements or
exportation
• More than 2000 MT committed
to CEC Rare Earth for export
to its customers
CEC Rare Earth Corp. Confidential
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PARTNER REFINERY
Mechanically complete & in final
permit approval process
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2015 production start
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SE Asia: outside of China
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3,000 MT Critical Rare Earth Products
CEC Rare Earth Corp. Confidential
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LONGER TERM SUPPLY
CEC Rare Earth is securing future supply from new projects;
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Currently in planning, design and permit stage for a full spectrum Rare Earth plant
in SE Asia
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Additional projects agreement for a 2nd SE Asia refinery; combined output exceeds
5000 MT
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Strategic alliance with Canada Rare Earth for two more major proposed refineries.
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Expect to build a total of 5 refineries with total capacity exceeding 15,000 MT
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EXECUTIVE SUMMARY
• CEC Rare Earth Corporation’s business:
– Building Turn-key Rare Earth refineries
– Supply of all Rare Earth products
• Over 5000 MT of Rare Earth supply available for top tier
customers including supply from non-China based
refineries
• CEC Rare Earth has the proven capability for processing
Critical Rare Earth products outside of China
• CEC Rare Earth is building a full spectrum Rare Earth
refinery outside China and an opportunity to participate
currently exists
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THANK YOU
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