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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
Griffin
August 30, 2017 12:29 am
Reply to  hendrixnuzzles

Thanks HN that makes me happy as I’m pretty close. I’m currently involved in setting up a new RV storage park. I’m still hoping to find some major time to put our investments on a spreadsheet.

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Griffin
Griffin
August 30, 2017 12:58 am
Reply to  hendrixnuzzles

This property that has been sitting empty for the last few years some friends of one of the tenets shops looked into installing an RV storage and backed of due to cost. That was a year or two ago and in the mean time 2 or 3 RV storages in the area have closed up for various reason not lack of tenets. The owner decided to go for it (he hadn’t done anything like this till then. Asked me to be security 24/7 beats $10k for cameras. We have been renting since the beginning of July and about 3/4 full. If you are interested the web site is http://www.rotechrvstorage.com/site-map.html
If you have any questions let me know.

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renbycage
renbycage
August 30, 2017 5:28 pm

One thing of interest, cleanteq stock has been exactly tracing the price of nickel, up and down, since the beginning of this year. If you pull up an 8 month chart for both, you could literally overlay the graphs. In the same time, cobalt has been going straight up, more than doubling, but for whatever reason, the stock is following nickel instead. I think nickel has plenty more to go, if true, that could be a huge catalyst for the SP.

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renbycage
renbycage
August 30, 2017 6:04 pm
Reply to  renbycage

There are multiple factors that are positive for the price of nickel moving forward. https://hotcopper.com.au/resources/metals-stainless-steel-demand-keeps-nickel-near-nine-month-peak.80661/#.Wac1Nq2ZPXE

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renbycage
renbycage
August 30, 2017 6:10 pm
Reply to  renbycage

With all the talk about batteries, 2/3 of the worlds nickel supply goes to chinese stainless steel. And demand for chinese stainless steel is up like 3.5%, unexpectedly. Who knew?

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renbycage
renbycage
August 30, 2017 6:27 pm
Reply to  renbycage

Historical nickel has been highly volatile, it was as high as $23/lb in 2007, under 5 in 2009, over 13 in 2011, 9 as recently as 2014 before descending to 4 as recently as 2 months ago, which was at 13 year lows. Now it seems to be coming up, and from the combination of historical and present day factors….. I could easily see it doubling from that low. That would be party time for cleanteq.

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arch1
August 30, 2017 6:39 pm
Reply to  renbycage

A lot of stainless is used to make the anode/outer case of NiMH
batteries in China.

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secretsquirrel
secretsquirrel
August 30, 2017 7:07 pm

http://www.asx.com.au/asxpdf/20170831/pdf/43lxkl6zy2v8p0.pdf

Australian Securities Exchange & Media Announcement
Clean TeQ Holdings Limited
CLQ:ASX; CTEQF:OTCQX

31 August 2017
Binding Off take Agreement
signed
with Beijing Easpring

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SoGiAm
August 30, 2017 7:28 pm
Reply to  secretsquirrel

$CTEQF long – Secretsquirrel, you’re amazing! Receiving and posting information prior to it being posted on the company’s website.
http://www.cleanteq.com/investors/asx-announcements/
Thank you! Best2YouAlwayz!

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Johnnn
Guest
Johnnn
August 30, 2017 7:29 pm
Reply to  secretsquirrel

here come the Chinese

eagerbeaver
eagerbeaver
August 30, 2017 7:58 pm
Reply to  secretsquirrel

Let’s see what happens on the ASX.

Griffin
Griffin
August 30, 2017 9:04 pm
Reply to  eagerbeaver

$ASX:CLQ 11:00 am Australian time up .04

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Griffin
Griffin
August 30, 2017 11:06 pm
Reply to  Griffin

$ASX:CLQ 1:00 pm Australian time up .04

They were up .05 about 12:00 pm IMO they lost the WOW with out an approx dollar figure for the agreement.

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Griffin
Griffin
August 31, 2017 12:18 am
Reply to  hendrixnuzzles

I wasn’t trying to be negative but a lot of analyst and investor just don’t have the perspective we Gummies do because of your on Clean TEQ. I’m also wondering if the lack of a current Feasibility Study doesn’t reflect also on the SP. The FS may be the best catalyst we see near term that will put out some numbers on profitability.

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Griffin
Griffin
August 31, 2017 1:06 am
Reply to  Griffin

$ASX:CLQ 3:03 pm Australian time up .06

time for sleep

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Griffin
Griffin
August 30, 2017 11:08 pm
Reply to  hendrixnuzzles

The last paragraph says a lot to future clients, about quality of product.

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eagerbeaver
eagerbeaver
August 31, 2017 12:58 am
Reply to  hendrixnuzzles

HN…. Yes, i read the announcement with great interest and the possibility that the cathodes may be made on site at Syerston. The LCO cathode is completely cobalt oxide whereas the NMC is one third each of cobalt, manganese, and nickel salts so if that is also to be fabricated onsite, the manganese would have to come in from another source.
I didn’t know Clean Teq’s autoclaves were en route. That would be great. I have been searching for news of their shipment from New Caledonia.

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renbycage
renbycage
August 31, 2017 12:27 am

Nice to see the binding off take agreement, we knew this was coming, and so now we’ve already got 20% of it sold, 5 years before we produce a bag of it. There seems to be some positive market reaction in the form of a 5% pop on the Oz side, but there is a couple of hours to go, so we’ll see how it closes, hopefully better than yesterday.

The rest of the press release was intriguing, though I’m not sure if I liked the teaser aspect of it. Its a bit unusual for a company to announce things that are possible, and in discussion. That includes a possible 25% or larger buy-in, a possible cathode plant on site, a possible life of mine agreement. Sounds good, but if anyone is interested, I have tons of possibilities I sell you for cheap. I figure if they are going to release these possibilities, they must be pretty far along in those discussions that it is just a matter of working out details. If would be pretty sucky if those possibilities fall through after they put out this press release.

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SoGiAm
August 31, 2017 1:06 am

$PTNUF long, PGM.asx – Haven’t seen this located on the thread yet: August 9th, 2017 Significant increase to the Owendale Mineral Resource (23 pages) -http://www.platinaresources.com.au/wp-content/uploads/2017/08/2017.08.09-ASX-August-2017-resource-update-2.pdf

Key highlights
― 127% increase in the higher grade 600 ppm cut-off scandium Mineral Resource, which is the focus of immediate project development
― 21% increase in the 300 ppm cut-off scandium Mineral Resource
― Substantial upgrades to the Measured and Indicated scandium Mineral Resource
― Mine planning commences for scandium Ore Reserves
― Encouraging tonnage increment to the Cobalt Mineral Resource from recent drilling
― Company assessing the potential economics of cobalt/scandium and a further drilling program
Yippy Skippy! 🙂 Best2ALL 🙂

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SoGiAm
August 31, 2017 9:49 am

$PTNUF longer this a.m. at .07098 under PGM.asx close of .93 AUD.
Have a great day and beyond ALL

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secretsquirrel
secretsquirrel
August 31, 2017 3:26 pm
Reply to  hendrixnuzzles

Seems a definite possibility, that’s the real reason some of us bought into it. I would also add that AUZ which borders, nearly surrounds CleanTeQ is another strong contender. Both would be good to add together under one roof so to speak. AUZ is very cheap, yes lot of shares, but I liked the management’s view on things.

Outside of this box, I see the RF/Chinese/CleanTeQ situation in Australia as a very exciting project. All my other investments are about drilling holes one way or another whereas CleanTeQ is so so much more. Safe jurisdiction, great management, fantastic products!

Long large CLQ obviously,
Long the other 2 also.

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SoGiAm
August 31, 2017 3:39 pm
Reply to  secretsquirrel

$AUZ.asx np – Secretsquirrel, does Australian Mines’Limited have an ADR on the OTC? I have been unable to locate such.
Thank you!
https://australianmines.com.au/
Long $CTEQF, $PTNUF, and Gumaraderie ! 🙂

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secretsquirrel
secretsquirrel
September 1, 2017 2:32 pm
Reply to  SoGiAm

Hi just see your post, sorry I don’t know, my broker is not Australian, that’s all I can add.

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eagerbeaver
eagerbeaver
August 31, 2017 3:45 pm
Reply to  secretsquirrel

Yes, it’s all very exciting. Seems like chump change for Platina. You would think there would be multiple parties interested. I wonder if HPX technology has been applied to any part of the Owendale real estate.
Long CTEQF, PTNUF

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Jeffrey M
Jeffrey M
August 31, 2017 3:48 pm
Reply to  hendrixnuzzles

What is the most shares that one could realistically buy of $PTNUF in a day? I’m assuming I’d need to place the order via voice rather than online

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SoGiAm
August 31, 2017 4:00 pm
Reply to  Jeffrey M

$PTNUF long – Don’t believe there is a limit Jeffrey. There was an as order for 60K earlier. No phone call required at TD Ameritrade. Advise not to go overboard on you position size though. Best2You

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Jeffrey M
Jeffrey M
August 31, 2017 4:09 pm
Reply to  SoGiAm

thanks Ben, definitely won’t go overboard but in the case of Fidelity I generally can’t trade more than 10,000 shares online at a clip which would be an $800 position if my math is correct!

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secretsquirrel
secretsquirrel
August 31, 2017 6:53 pm

1 September 2017 08:27am (AEST)

CLQ: S&P DJ Indices Announces September Quarterly Rebalance
Clean Teq Holdings Limited released an announcement at 08:24am on 1 September 2017.

CleanTeQ added to the ASX300 today.

Cannot add the full link info as won’t allow me, but this is the bottom line.

Must be good news!

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secretsquirrel
secretsquirrel
September 1, 2017 9:35 am
Reply to  hendrixnuzzles

Great call hn!
(and let’s not forget ivanhoe)

Many here including me are indebted to this tremendous pick, financially and for the ride it will be in the coming many years.

I jumped on CleanTeQ early and now hold a very significant position, my average being 0.69aud. Second largest position only to Ivanhoe which I have recently trimmed (know said I wouldn’t) but being so overweight in a jurisdiction and thinking with my clear head on decided was really to risky. I still hold a large amount as it’s a great stock and should go much further. I want to add more later.

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jerome50
jerome50
September 4, 2017 4:25 pm
Reply to  hendrixnuzzles

I to have decided to lighten my position in IVN by about 30% and have almost double my position in cleanteq. I also have some uranium positions which I think I will lighten up by about 50% ( at a loss) and deploy that into either more cleanteq, or Mux as I feel uranium with be in the dumps for awhile yet

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michmana2
michmana2
September 1, 2017 3:57 pm

A couple of more metals affected by the electric vehicle movement.

http://mobile.reuters.com/article/amp/idUSKCN1BC4OF

Cleanteq tech could help here too.

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renbycage
renbycage
September 2, 2017 4:32 am

6 months ago, when CTEQF hit its high of .88, nickel was at $5, and cobalt $23. As of this writing, Nickel is at 5.41, and Cobalt $27.67 and CTEQF at .75. If the metal prices hold, or even better, keep rising, we should be looking at a new SP high sometime soon. We may also get a rise as we get closer to the 4th quarter in anticipation of the DFS. And then, we never know what and when the next news comes out, a contract or off-take commitment. I like the chances for a significant move before the end of the year. Maybe we touch 1 before the end off the year, 1.10 would be beautiful.

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renbycage
renbycage
September 3, 2017 3:36 pm

Cleanteq says they can produce nickel sulphate for about $3 a pound. So the move of nickel from $4 to $5.41 in the last 60 days is monumental. Since the stock is being priced almost exclusively for its nickel and cobalt in the ground, this kind of move in the price of the commodity can explode the SP. What would a gold mining stock do if gold went up by 40+% in 60 days. That would put gold at 1800. Also, Cobalt has gone up over 100% this year. It looks to me like nickel will run up much higher, I suspect we’ll see $7 again soon enough. Also remember, we will get a premium over spot prices for the high purity sulphate forms our circuit will produce. When you add scandium credits, this business is just set up sweeeeet. Whatever they do with water and mineral extraction is over-the-top, but dreaming for the day they get a chinese mega-water deal. They are now literally closing mines there until they pass new stringent environmental standards, and cleanteq has the solution for many of these situations, where the wastewater needs additional processing before it can be released. By the way, some of these mine closings, and the threat for more to come, is also contributing to metal prices rising, as supply may be interrupted in some cases, or threatened to be interrupted. Some of these companies are looking at hundreds of millions in expenditures to rehabilitate its processing in order to achieve these new standards, cleanteq has specifically targeted this growth market.

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eagerbeaver
eagerbeaver
September 3, 2017 5:30 pm
Reply to  renbycage

Renby…Yes, completed agree, and hoping for significant further appreciation in Cleanteq. And isn’t it astonishing that China is rigorously cleaning up their act now.

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Johnnn
Guest
Johnnn
September 3, 2017 6:28 pm
Reply to  renbycage

& pengxin just happen to be the largest shareholder in one of China’s largest publicly listed water treatment companies

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eagerbeaver
eagerbeaver
September 3, 2017 6:21 pm

I don’t believe this has been posted before but it’s a fascinating interview of Rick Rule at the recent Sprott Natural Resource Symposium. He talks generally about the price of gold, junior miners, lithium and cobalt, prospect generators, the resource market, and his outlook for 2018. When discussing cobalt, he mentions that Sprott is invested in ventures in both the Congo and Russia.

https://www.youtube.com/watch?v=38TtenjHtMA&t=534s

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rubberworm
Member
rubberworm
September 3, 2017 7:37 pm
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