Produces Rare Earth Permanent Magnets at KIRAM

Titanium Powder Approved for 3D Printing

These have been two fantastic announcements in my opinion.  A Korean 3D printing group has confirmed that titanium powder produced by ASM exceeds the purity of the industry standard.  An offtake agreement is being negociated for 1500 tons per year. The other is that rare earth ( NdFeB) magnets have been successfully produced from ASM feedstocks by KIRAM where the performance exceeds that of a commercial sample.  A 5200 ton plant for producing these metals is expected to be at full capacity in mid 2022.  (Currently using a pilot plant)

My initial thoughts: From googling, the typical commercial price for Ti powder for 3D  printing appears to be US $300-400 per kilogram.  You would imagine that an offtake agreement in the region of 1500 tons would result in a significant discount to this, but nonetheless the potential cash flow looks promising.  The price for the precursor (TiO2) to the Ti powder is in the order of $3-4 per kilogram. ASM has indicated that the their process for metallising Ti from TiO2 is 50% more efficient, so there is then signifncant potential for great margins.

Bulk prices for 1kg of Neodynium magnets was ~US$100 for N45 grade magnets.  I am not sure how that compares to the ones produced, but gives a ballpark and also indicates that selling 1000 tons of these magnets is going to be good for cash flow.  Nd will be a product of the Dubbo mine. 

There was also an investor presentation published earlier in the month. 

Investor presentation

COMMERCIAL SCALABILITY AND 2X EFFICIENCY OF PROCESS

ASM has demonstrated the manufacture of a copper titanium alloy in their scaled up facility with double the metal yield compared to the pilot process. They indicated that this result demonstrates that they can make any commercial titanium alloy currently on the market.

After a bit of searching copper titanium alloys are both conductive and high strength and are used in EV battery connectors, robotics, aerospace and power sub station disconnects. 

I hold ASM

ASM PRODUCES KEY HEAVY RARE EARTH DYSPROSIUM METAL IN KOREA

The announcement indicates that their 95% own subsidary, Zircon Tech, has now produced Dysprosium using their patented energy efficient electrorefining technololgy.

Dysprosium is another rare earth used in making magnets and imparts resistance to demagnetisation in neodymium based magnets.  Up to 12% is used in the high performance magnets, e.g. for high performance EV motors.  Dysprosium  is difficult to produce using conventional methods due to the high temperatures required (melting point ~1400C). ASM has now demonstrated that they can produce key magnet metals dysprosium, praseodymium and neodymium, as well as titanium.  The next targets are ferro-dysprosium alloys and zirconium, the later making up a large part of the resource at the Dubbo project. 

I hold ASM

08/09/2020  NdPr METAL PRODUCTION AND PERMANENT MAGNET SAMPLES

https://www.asx.com.au/asxpdf/20200908/pdf/44mf5r54h9c57x.pdf

03/09/2020 ASM TO ACQUIRE 95% OF ZIRONTECH

https://www.asx.com.au/asxpdf/20200903/pdf/44m8tr2c2m1zwp.pdf

Both of these are more positive announcements.  Re the acquisition Zircon Tech is ASMs JV partner who has been developing their electrorefining technology, so the acquistion effectively locks in all the related IP

The most recent announcment shows they now have the capability to use their technology to make NdPr alloys that can be used for making the permanent magnets that are used in the production of electric vehicles among other things. 

I hold ASM

ASM had an ASX announcement a few days ago.  The share price has now doubled from the recent low. 

The announcement was good,  They demonstrated that they could refine a key rare earth metal, but usually this sort of announcement results in a 1 day pop in the share price. In this case it has been 3 days of double digit gains. This has broadly been the same for small cap rare earth asc stocks, but ASM has been the lead. 

Is there something else going on? There have been some rumblings in the media regarding AUS and US governments continued backing of maintaining non China rare earth supply. However,  as far as i have seen,  there has not been anything specific to ASM.

ASM JV PRODUCES SECOND KEY PERMANENT MAGNET METAL -PRASEODYMIUM

https://www.asx.com.au/asx/share-price-research/company/ASM

----end

I hold ASM

SUCCESSFUL PRODUCTION OF Ti METAL FROM PILOT PLANT

https://www.asx.com.au/asxpdf/20200810/pdf/44lbs681q6vw6q.pdf

---end

I like this focus on metal production, which makes ASM more than just a rare earths mining company with demonstrated capacity in metals production through the joint venture. Subsequent studies will focus on Zirconium where ASM has previously highlighted that zirconium ore as being one of the main products of the Dubbo project.  It is interesting that they will also focus on Dysprosium and Praseodymium given that these haven't been a focus of past investor presentations, although they are mentioned as being present in the ore body.  These metals impart improved corrosion resistance in NdFeB magnets. Dysprosium is a focus of Northern Minerals (NTU).  Praseodymium (and also Dysprosium to a lesser extent) is a focus of Hastings technology metals (HAS). ASM currently has exclusive rights to the patented electrorefining process.  In addition, I wonder how much the titanium refining would be of benefit to Iluka (ILU) a mineral sands miner and also Titomic (TTT) or  Aurora Labs (A3D) in terms of securing local supply chain of titanium metal for their metal 3D printing technologies.  TTT in partiular has indicated that securing a supply chain for the metals that use in their 3D printers as being important. 

I hold ASM, NTU and TTT.