written by reader 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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Griffin
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$CTEQF – Completion of Placement and SPP

https://mailchi.mp/cleanteq/completion-of-placement-and-spp?e=f149c30529

I think this answers the number of shares in dilutuon, “Further to the announcement on 8 March 2018, the Company has issued and allotted 43,575,880 shares under Tranche 2 of the Placement, representing approximately A$50 million. In addition to the Placement, which was heavily oversubscribed, Clean TeQ received a strong response to the SPP raising an additional A$5.5 million.”

CTEQF long

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Griffin
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$MGXMF – MGX Minerals and Engineering Partner PurLucid Announce Rapid Lithium Extraction System Demonstration

https://www.mgxminerals.com/investors/news/2018/366-mgx-minerals-and-engineering-partner-purlucid-announce-rapid-lithium-extraction-system-demonstration.html

note: They have 3 separate custom systems (before delivery ?) to demo.

$MGXMF long

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secretsquirrel
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rubberworm
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rubberworm

Good link … My DD has had smart money moving into nickel for awhile now. I also think CLQ’s IRR of 19.1% is total BS and they know it. Clean TeQ knows the cost of nickel is going to be booming. And Sama could get to be very interesting.

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wade3
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Not sure if this has been posted before, but here’s Motley Fool’s take on CleanTeq: https://www.fool.com.au/2018/08/15/whats-behind-the-rise-and-fall-of-clean-teq-holdings-limited-shares/

I myself recently threw in the towel and closed one of my CLQ accounts. Still holding another…so low now, what’s the point? I’ve never done well with Aussie stocks. Of course now it will skyrocket now that I’m mostly out.

eemajin
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CleanTeq SP is killing me. Could news of the upcoming aluminum battery be hurting the share price? Opinions sought.

https://finance.yahoo.com/news/end-lithium-ion-battery-210000939.html

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renbycage
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renbycage

Beware of marketing professionals masking as self described stock picking advisors/experts. Don’t be the sucker that raises the stock price for insiders that are selling into your buys. For example, I’ve seen many examples of people quoting the Gold Investment newsletter, there is a free version, and an expensive paid subscription. The paid subscribers get the “picks” first, and later, the recommendations are released to the free subscribers, often resulting in rapid gains in stock price for small illiquid mining specs, followed by a subsequent gradual sinking of the stock price. [pump and dump?] My guess is the smart paid… Read More Β»

rubberworm
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Griffin
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JOHN WATERS
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JOHN WATERS

When the Australian Co. is involved with Dow…it tells me that what they are doing is no big deal (maybe). Dow supplies ion exchange resins…as in water softeners……and I believe the Australian process is just absorbing the scandium and cobalt onto the ion exchange resin…letting the more purer water effluent go to wherever and then they are probably just desorbing the adsorbed metals with and acid wash or a salt wash and re-using it. The ion exchange resins preferentially adsorb the multivalent metals ie scandium and cobalt. In my career I have used ion exchange many times over…and it is… Read More Β»

rubberworm
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Griffin
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Griffin
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$FYI – Tesla Cobalt Offtake

“This from the man who has vowed to eliminate cobalt from the Tesla product mix because of its financial cost and the reputational cost of a metal associated with child labour and poor safety conditions at artisanal mining operations in the Democratic Republic of Congo, the world’s dominant producer.”

https://mailchi.mp/cleanteq/cobaltsupplychain-1369578?e=f149c30529

rubberworm
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rubberworm

You might find this interesting … https://www.youtube.com/watch?v=O-kbzfWzvSI

rubberworm
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