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:: Innovation Metals and Hexagon Resources form JV for the Commercialization of RapidSX Technology for Rare-Earth Separation
Innovation Metals Corp. is pleased to announce the execution of a binding Investment Agreement with Hexagon Resources Limited, on the formation of American Innovation Metals Inc., a new joint-venture company focused on the commercialization of IMC’s RapidSX™ technology for the separation of rare-earth elements (“REEs”).
Through the BIA with IMC, Hexagon has an Option to acquire 49% of AIM with an exercise price of US$2.0 million, plus US$4.0 million in deferred consideration. Hexagon will also contribute commercial and marketing capabilities to identify and to secure feedstocks, generate licensing opportunities for the RapidSX technology and sales/offtakes for REE oxides (“REOs”) produced. The exercise of the Option is conditional on Hexagon shareholder approval, to be sought at Hexagon’s AGM on November 22, 2019.
Hexagon is an Australian-listed energy-materials development company, with natural-flake graphite assets in Australia and the USA. The company has recently pivoted its graphite-development strategy from upstream mine development to now focusing solely on the downstream processing of graphite and other energy materials in the United States. Hexagon has for the past two years focused on the transformation of graphite into battery materials and products for highly-specified industrial applications. A positive downstream scoping-level study, examining the purification and production of a diverse range of high-quality graphite products, was successfully completed in May 2019. This ongoing work has led to the development of a strong technical and commercial network in North America, spanning the entire battery supply chain. It was through this network that Hexagon was introduced to IMC and the present joint-venture opportunity.
The US$2.0 million investment by Hexagon will be utilized to build a commercial demonstration plant (“CDP”) in North America. The CDP will have a planned production capacity of 60,000 to 80,000 kg of REOs per year, with construction and commissioning planned for completion in Q3 2020. The investment will also be utilized to complete the protection of the RapidSX IP via global patent applications. “IMC has long recognized the need for cost-effective REE separation and purification capabilities in the USA and beyond,” commented Dr. Gareth Hatch, Chairman and CEO of IMC. “In addition to ongoing US-China trade tensions, in recent years the authorities in China have been more strictly enforcing environmental protection and pollution-control measures, leading to the closure of non-conforming industrial plants and facilities. The REE industry is no exception, and these steps have led to a gradual reduction in REE production capacity, tightening supply. The joint venture with Hexagon represents a unique opportunity to support the much-needed diversification of the REE supply chain, and we look forward to working with the Hexagon team to realise our shared objectives.”
IMC developed the RapidSX separation technology with the assistance of US$1.8 million in funding from the US Department of Defense, resulting in the production of commercial-grade separated REOs at the pilot scale. The technology combines the time-proven chemistry of solvent extraction with a new column-based platform, which significantly reduces time to completion and plant footprint, as well as lowering capital and operating costs. It has also been successfully applied to the separation and purification of other metals in solution, such as Ni, Co and Fe in leach solutions produced from Ni laterite ores, as well as Li from Li brines. “Hexagon is excited to be working with the IMC team to commercialize the RapidSX technology for REE separation, particularly with respect to the US supply chain,” said Mike Rosenstreich, Managing Director of Hexagon. “The lack of US-based operational REE separation capacity presents a serious vulnerability to US national and economic security and the security of its allies, as REEs are critical for defense technologies, electric vehicles and US economic growth plans. Without downstream capacity to separate and purify REEs, the USA and its allies are vulnerable to potential supply disruptions, price spikes and trade disagreements related to REEs. It is our intention to remedy this situation with the successful commercialization of the RapidSX approach to REEs.”
The CDP will be used to conduct staged scoping- to feasibility-level studies on the performance, capital and operating costs of a full-scale, RapidSX-based REE separation plant.
Initial commercialization by AIM will focus on licencing of the RapidSX technology to mixed REE chemical-concentrate producers for fixed and revenue-based fee structures. Ahead of these licensing agreements, clients will have the opportunity to utilize the CDP to test the separation of their mixed REE chemical concentrates, while covering the plant operating costs.
Following Hexagon’s initial investment, AIM could potentially be self-funding through to commercialization with operating costs covered via client projects. It may also attract government grants and incentives, particularly from the USA, with respect to the future construction of a US-based independent, full-scale RapidSX-based REE separation plant, to be owned and operated by AIM.
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