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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arch1
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In theory, practice and theory are the same. In practice they are not. What is a closed system? In classical physics one that neither gains or loses material and does not affect surrounding energy. In other words one in stasis. To look at energy input without considering energy output is like stopping mid sentence and you cannot do that in practice. You must always finish the sentence or your understanding will be incorrect. It is all too common that a researcher stops when their observations support their thesis, but that is not real science, finding the truth. HN you are… Read More Β»

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ARCH, John L Casey’s “Dark Winter” is a study of the effects of solar cycles and their impacts on the earth. ~70% of the book is devoted to “Scholarly Acknowledgements” – a summary of peer reviewed white papers. I really liked that section’s opening: “All truth passes through three stages. First, it is ridiculed. Second it is violently opposed. Third, it is accepted as being self evident.” -Arthur Schnopenhauser (1788-1860).

arch1
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Deanbob Thanks. Most people do not know that our sun is a variable star that varies a great deal in energy output in regular cycles. There are indications that we are entering a maunder minimum and the onset of a mini iceage again. Then climate change alarmists will wish for a little warming,,, and find that impossible for us. Best solution is insulation to stay cool for now as that will help us stay warm in our homes in future. BTW CO may actually cause more cooling than heating as a greenhouse gas as it absorbs as much incoming as… Read More Β»

SoGiAm
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$CTEQF longer this a.m.. Trading below $CLQ close of .99AUD. πŸ™‚
$ARTH is trading within .0003 currently…

deanbob
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The trade was .77 OTC. HN said last night that this drop was a real possibility.

arch1
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Why the extreme volatility in penny stocks such as cleantech? Probably more than half the market traders think it is overbought and due for correction. Because of that you see far more shorting going on than usual even though that is generally a good way to lose money. Too many expect a major drop. Barring sudden widespread war I do not. Stockmarket has done little more than keep up with the inflation rate in dollars, an artifact of the way the govt. chooses to measure inflation. Here is present example of how traders jump on every drop seeking to profit… Read More Β»

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deanbob
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deanbob

South Korea has said they do not want to rebuild Seoul, as they had to following the Korean conflict. Will that shift the potential for physical destruction to cyber and/or sanctions?

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SoGiAm
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#Nickel, other metals, markets, price and carts: http://www.infomine.com/investment/metal-prices/nickel/ and kitco.com
Long HendrixNuzzles and the GREAT Gummunity! Best2ALL!

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eagerbeaver
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Yes, here’s some nickel charts. You can see that the price has ticked up recently.
http://www.kitcometals.com/charts/nickel_historical_large.html
Hopefully, Cleanteq will also follow suit.

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renbycage
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re: cleanteq 1. nickel: I was surprised to discover how volatile nickel price is. It has been at over $10 pound in 2013 and 2014, it spiked to 23 ten years ago, and when it was languishing at $4 up until a couple months ago, it was sitting at a 10 year low. There will be increasing nickel demand due to its use in EV batteries, but not a huge effect at moving the needle since so much more of it is used by china for stainless steel. It seems like the chinese economy has more relevance to nickel price… Read More Β»

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deanbob
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Thank you (and all who have) for the updates. I took an entry position back ~July after my DD following HN great detailed write up. But, when HN’s original GOLD/PM thread was halted and a new 1 started, I messed something up and stopped received thread posting updates; and I did not know about this thread. Thankfully, I got back on track. And, thankfully, there was the recent price correction that allowed me to increase my position size after getting caught up on everyone’s additions.

SoGiAm
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Deanbob, you are able to find all HendrixNuzzles, or any member’s, threads by clicking on his moniker/picture that will take you to his Bio page and list all threads he has authored. The most recent thread shall be at the top of the list. Best2YouAlwayz – Ben

deanbob
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Ben, thank you for that info. That is much easier than using the ‘search’.

fizee
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CLQ shorts closing out since July as price rose but spike up last Friday. See chart at
https://www.shortman.com.au/stock?q=CLQ

arch1
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fizee Spike Friday was likely Sept. Puts expiring worthless or being closed.

fizee
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fizee

thanx a1. this is still a comparatively low level of shorting. perhaps of more interest are the levels for lithium stocks – orocobre is the 2nd most shorted on the ASX and galaxy is at 11. List available at
https://www.shortman.com.au/

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eagerbeaver
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eagerbeaver

CleanTeQ is once again flirting with 1.00 AUD on the Sydney Exchange.

Long CTEQF

rubberworm
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arch1
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Rubberworm Thank you for post. As demand increases cobalt may yield better returns than Gold mines,,, depending on recovery costs. There has not been any meaningful recycling program but one is likely to soon develop with the huge number of batteries being produced. Recycling might be another area for Cleanteq

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Griffin
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arch1, there is one company I know of that is setting u to recycle lithium batteries, American Manganese Inc, $AMYZF. AMI has patented their battery recycling technology. Here is an article that I received from them;

http://www.stockhouse.com/news/newswire/2017/08/22/the-most-lucrative-niche-cobalt-market

$AMYZF long sp

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niizajim
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$AMYZF np – I saw a pump article on them just recently and it sounded intriguing, but haven’t taken a position. I figured I would watch it a little and see what happens. Didn’t want to buy right after a pump either. Only took a cursory glance, but on the surface, it sounded good.

arch1
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niizajim I think that wise until they show they can turn a profit,,, unless they have a cushy government subsidy to milk the taxpayers.

arch1
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Griffin Thank you I was unaware of this startup. I would be curious as to how their recovery costs compare with new metal/mining. Often recycling costs more unless done on massive scale to grind the material being recycled,,, often more difficult than ore processing

What has been called recycling so far is collecting batteries and dumping them in hazardous waste repositories. BS the public to feel good. like most glass and plastic recycling.

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