Scandium, Cobalt, and Water Purification: CleanTeQ Holdings

By hendrixnuzzles, February 6, 2017

A Microcap Teaser Solution In Advance !!
(Australian stock exchange CLQ, OTC pinks CTEQF).
CleanTeQ is sure to be the answer to future teasers you will be reading about from resource gurus, To save you all the trouble of solving them, I decided to write this article.
My portfolio was grotesquely overweight in gold and silver positions, and in moments of anxiety I thought it would be a good idea to diversify and take a few positions in something other than gold mines, royalty companies, Mongolian exploration companies, and small-cap copper miners with major operations in the Democratic Republic of Congo.
Thus I made a small speculation in CleanTeQ, solely on the basis that mining titan Robert Friedland was the Chairman, and CleanTeQ was the only resource company I could find that seemed to be in a position to mine scandium, a very rare metal that sells for a couple of thousand dollars a kilo.
My due diligence was so slight that I was embarrassed to emphasize my position to the readers at Stock Gumshoe. We are supposed to study these things a little more than I did for CleanTeQ. And after entering at 50 cents, the stock promptly dropped to 35 cents or so, making me glad that I did not look foolish by publicizing my position.
As the weeks went by, I started to find more information on the company that I should have found out beforehand. This was partly accidental, partly from other Gumshoe readers, and partly from new announcements and company news that occurred after I took a position. But the findings were all very positive, and because the company is so interesting I thought it warranted its own thread apart from the hard asset thread which I moderate.
I have a full long position and high hopes. And I thank Secretsquirrel, Griffin, Larry McKenna, and several others who helped fill in the missing pieces of the puzzle.
Below are my findings, opinions, and summary on CleanTeQ Holdings:
BUSINESS MODEL CleanTeQ is a hybrid company based with three bases: scandium mining and production, cobalt mining and production, and water purification. This seems like an odd combination, but as you will see, it is not. It is a stroke of genius. And I will explain why we should care about scandium and cobalt.
(1) The company is starting production of the Syerston mine, the world’s only scandium mine;
(2) The company will also produce significant amounts of cobalt as a co-product to the scandium;
(3) The company has a large-scale water purification technology, which will target municipalities,
Industrial operations with waste water problems, and mines, which also have water problems

PROSPECTS FOR THE THREE SEGMENTS
(1) Scandium is a very rare metal that usually occurs in only small amounts that are not economical to mine. It is mostly available as a by-product and the market is opaque, usually between private parties. Scandium has very beneficial applications in aerospace, aviation, and technology, but has not been widely applied because there is not a sufficiently reliable supply of it.
(2) Cobalt is essential in many batteries. Lithium gets all the investment press, but a majority of the battery formulations need cobalt, which is rare compared to lithium. Cobalt has a similar supply situation as scandium, it is mostly a by-product and is not commonly a prime mining target in and of itself. But demand for the electric energy market is growing rapidly and cobalt demand is growing and will continue to grow accordingly. Supply chains on cobalt are iffy.
(3) Water purification is a pressing need throughout the world. Cities with lots of people, industrialized places with lots of factories, or mines with waste water, all have a real and pressing need for large scale water purification. I think most people can accept this premise of widespread demand without a lot of documentation.

HOW DO THESE SEGMENTS RELATE TO EACH OTHER ? I cannot get too technical about the water purification technology, but I will try to explain what I understand, and how it relates to the scandium and cobalt operations. They call it Continuous Flow Ionization. Ionization is not a proprietary technology per se, but CleanTeQ has developed a way to implement ionization in a continuous feed, automated loop that improves volume, improves economics, is reasonably priced for installation, and can be custom-modified to specific waste problems. It can be used in conjunction with other filtration techniques. Further, it can be modified TO EXTRACT CERTAIN SUBSTANCES from the feed waste water. This is done by modifying the resins that are used in the ionization process.

Now it so happens that CleanTeQ has developed resins that can extract scandium and cobalt from waste water. So they potentially will have commercial sources of rare metals from the by-product waste of their water purification process !

HOW CLOSE IS THE WATER THING TO REALLY HAPPENING ? It is happening. CleanTeQ has signed a memorandum of understanding with a major Chinese municipality to implement their technology. There is a joint venture, 55% Chinese/45% CleanTeQ. Once the first one is up and working, China has a mind-boggling potential for water purification. For their teeming urban centers and for their mining and industrial locations, shall we say the potential is very large ?

CleanTeQ has 100% of rest of the world. CleanTeQ is closed-mouthed about other commercial sources, but they let on that they have been in contact with the likes of GE, Dow, and other big hitters. They state a pipeline target of $100 million by 2020; I predict they will do much better.

HOW CLOSE IS THE COBALT THING TO REALLY HAPPENING ? Very close. Battery useage is soaring and is the strategic target of many governments, corporations, and environmental groups. Batteries need cobalt.

HOW CLOSE IS THE SCANDIUM THING FROM HAPPENING ? This will take a while because the applications are high tech, with long lead times, and there is only one scandium mine in the world (CleanTeQ’s newly commissioned Syerston mine). CleanTeQ intends to develop the scandium market by being a reliable source of supply, and by driving the price down.
CleanTeQ will have viable margins with scandium prices up to half of current prices.

To give you an idea, the Russians made a few MIGs with scandium/aluminum alloys. They were faster, lighter, stronger. An addition of 0.5% scandium to aviation aluminum strengthens the frame, removes the need for riveting, reduces weight, and makes repairs easier. . The Russians dropped it because of costs; and Boeing and Airbus will not use it without a reliable source of supply. But there is about to be a reliable source of supply: CleanTeQ.

WHAT ABOUT IP PROTECTION ? I believe the IP and know-how moat is sufficient. CleanTeQ holds a perpetual license from a high-level Russian research organization that provided some of the foundation technology. I am not a patent lawyer and a lot of the know-how will be proprietary, not patented. CleanTeQ has been at this for over ten years, I think the barriers to entry are sufficient.

MANAGEMENT Totally a plus. Robert Friedland is the Co-Chairman and CEO, he has 20% of the company, great credibility and clout with the Chinese, and an unbelievable track record in mining. Sam Reggall is the other co-chairman. I know little about him, other than from my observations of him on an Australian investment show that aired last week. He was impressive.

MONEY AND FINANCES I don’t think there is anything at all to worry about. Friedland must be worth billions, the Chinese are in, and the concept has enormous potential.

Sources: as I mentioned, information is scant. My sources were the CleanTeQ website, presentations and and interviews with Friedland and Reggall, and the sketchy information on the brokerage sites. Nothing you cannot find on your own.

Long CleanTeQ

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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3592 Comments on " Scandium, Cobalt, and Water Purification: CleanTeQ Holdings"

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renbycage
Irregular
536
Cleanteq’s BFS and Ardea’s PFS will both be coming out in the weeks to come, and they will make very interesting comparisons. I can’t wait to sink my teeth into those studies. The deposits are very similar, and Ardea is following the track of Cleanteq, just about 18 months behind. They are both cobalt/nickel/scandium deposits with a possible platinum circuit. They will both be using high pressure acid leach, but then it will be interesting to compare cleanteq’s proprietary extraction method, vs Ardea’s “the old tried and true” method, to give me the first objective glimpse as to whether this… Read more »
90smoney
Irregular
1
$MUM .cve $MSMGF .otcmkts np Mustang Minerals Corporation is a Manitoba Canada based exploration company with assets is nickel, copper and platinum. My interest is in their Mayville-Makwa Nickel-Copper Project, two projects areas located 43km apart in the Bird River Greenstone Belt area claimed to have nickle and copper militarization similar to that of the “ring of fire” in Ontario Canada. The two locations are near-surface pits that will be shovel mined and ore hauled with conventional trucks. Here is a link to their most recent presentation http://www.mustangminerals.com/investors/corp-pres/ Are there any other Gummies interested in Mustang Minerals? Anyone with more… Read more »
Cowboy
Irregular
9
hendrixnuzzles
Guest
0

It is good for them but don’t get too excited. They are years behind behind Cleanteq and Airbus R&D. Airbus is already selling scandium powder for 3D printing applications and printing parts. You can imagine who is supplying them the scandium.

arch1
Irregular
7459

Airbus is in a bind right now. Boeing headfaked them by announcing they were going after the super jumbo jet market.so airbus rushed to be first to tie up a market where only
Arabian kings buy and soon saturated.
‘In the meantime Boeing was creating a super economical, lightweight, low fuel use in the n37 series,,, just now rolled out and announced. 637 I think.
I have no proof but I think it highly likely it uses a lot of Scandium. Just a tidbit of trivia for gummie info.

SoGiAm
Irregular
9630

Arch1 = Flying NonNun Guide ‘-)
#EADSY > http://www.nasdaq.com/symbol/eadsy
$BA > https://finviz.com/quote.ashx?t=ba 😉 #Sc

Cowboy
Irregular
9

I’m bored today. HN has got me reading on Vanadium. Here’s some more reading…. https://www.mining-technology.com/features/buildings-batteries-time-right-vanadium/ ….Cowboy

hendrixnuzzles
Guest
0
Solar…investment prospects versus vanadium/storage I’m not liking the landscape. May have to start looking at auto parts companies to short. ** Most of the solar volume is by huge Chinese factories selling silicon panels. You can buy them at Home Depot. How the heck can you make money investing in silicon, or a Chinese-Korean dogfight for manufacturing market share ? A small sector of the panel market uses fancy metals and complicated constructions. These have interesting metals here and there from an investment point of view, most of which can be extracted by Clean Teq. But none are a sure-fire… Read more »
SoGiAm
Irregular
9630

Cobalt stocks on the ASX: The Ultimate Guide – good to see $WFE, $CFE and $FEL included here – all ones to watch out for. Also nice to see $MQR included with its Canadian cobalt and where $4CE is the major shareholder.
https://smallcaps.com.au/cobalt-stocks-asx-ultimate-guide/
https://twitter.com/JBrewerMining/status/953609199023525888

$SPMTF up 172% since entering 🙂

SoGiAm
Irregular
9630

$EUC just 2x ed position @ ~ 0.14AUD may have bottomed
b2A

williamstown
Irregular
111

HN if any gummies are interested in subscribing to an Australian email service on small mining etc stocks.
It’s a free service: www. smallcaps.com. au
Some my already subscribe.