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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
April 26, 2017 8:16 pm

$CTEQF – Quarterly Report for the quarter ended 31 March 2017.

https://gallery.mailchimp.com/6b234a59bc4b0bc555986937a/files/3d328480-96ae-478a-b3db-c581441b1d1b/CleanTeQ_Quarterly_report_31March2017.pdf

I haven’t read this yet, thought I’d post asap since it looks like we got it early.

long $CTEQF, $ECSIF

btw my cobalt stocks to a hit was that just a sector sell off or is there some news about cobalt.

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chrizcringle
April 27, 2017 5:57 pm
Reply to  Griffin

Awesome! This will be read ASAP!

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chas2411
chas2411
April 26, 2017 8:19 pm

$CLQ
Just released Clean TeQ Quarterly Report 31 March.
See nothing adverse, all looks fine and progressing in all fronts.

http://cleanteq.us14.list-manage1.com/track/click?u=6b234a59bc4b0bc555986937a&id=6eafa3cd70&e=9a4af8919e

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renbycage
renbycage
April 26, 2017 10:31 pm

Today was a great opportunity to buy cleanteq at a great entry price. I tried to buy more at 46 cents, but only got less than 5% of my order filled. Too bad, in OZ looks like it is up 13% at the moment, tomorrow those shares will be much more expensive. Just perused the quarterly report, and there were a few new tidbits of info in there. They are doing feasibility on 3 potential ionic projects, and stated they felt confident they would be awarded at least one contract from that. They are diverse projects, one in australia, one in africa, and one in the middle east. I think this is not new info, but the feasibility study for syerston is due 4th quarter this year, and construction of the pilot water treatment plant in china is expected in the 3rd quarter. They are looking to close outtake agreements for nickel/cobalt before the end of the year, and have been holding ongoing discussions with several interested parties. They have partnered in the development of graphene oxide technologies that seem to have game changing potential in the water purification field. Overall, in my view, nothing has changed, I have extremely high expectations for this company, and feel very confident with this investment. The downside/upside ratio for this company, in my estimation, is a tiny fraction.

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Griffin
Guest
Griffin
April 27, 2017 12:02 am
Reply to  renbycage

I couldn’t agree more. I originally got in because of the water division and HNs DD. After reading Q1 report I can’t find fault. The water division is already doing in probably their largest market, and leveraging that for the Syerston Project. If that wasn’t enough they have partnered with the developers of Graphene oxide membranes which fits perfectly with their water div. and means the water div which is already a leader in their sector will be the leader in that sector for many years to come. Thank you HN. Now if I just had more.

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secretsquirrel
secretsquirrel
April 27, 2017 3:06 am

Within the latest quarterly was the below,

” In addition to the share placement, Pengxuin Mining has also agreed to use its best endeavours to assist the Company to procure Chinese project financiers to participate in the financing of the Syerston Project for a significant proportion of the capital cost of the Project”.

This is a very exciting company, feel very secure in my holding.

Long CLQ

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secretsquirrel
secretsquirrel
April 28, 2017 8:37 am
Reply to  hendrixnuzzles

Can’t be to much under as now sitting at 75.5¢ and hopefully will move up to the Chinese 88 lucky price soon and beyond.

Big swings are inevitable as CleanTeQ is far from just a “mining company”, it’s possibilities just on the water side into China alone has revenue potentials way into the future.

All those here in now are in very very early, as you say it’s really an unknown company.

I said this some time back, CleanTeQ is RF’s environmental iPhone equivalent and outside of Ivanhoe for its sheer scale this could well be his greatest legecy, all IMO of course…..

My biggest position is Ivanhoe, followed by CleanTeQ.

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Griffin
Griffin
April 27, 2017 6:39 pm

FYI – Lithium Miner News For The Month Of April 2017
Apr. 27, 2017 12:55 PM ET|

About: Global X Lithium ETF (LIT), Includes: ALB, ALTAF, AVLIF, BCRMF, CRECF, DJIFF, DMNXF, FMC, GALXF, ILHMF, LACDF, LIACF, LIXXF, LMMFF, LNRDY, MLNLF, MNTCF, NMKEF, NTTHF, OROCF, PEMIF, PILBF, RRSSF, SQM
Matt Bohlsen

Summary
Lithium spot and contract price news – Lithium prices remain steady, spodumene prices hit a record high.
Lithium market news – “Supply and demand balance expected to stay tight.”
Lithium miner news – Galaxy Resources hits nameplate production, AMAL/Tawana achieves USD1,000/t (beating Galaxy’s record USD 905/t) spodumene binding off-take agreement.

https://seekingalpha.com/article/4066140-lithium-miner-news-month-april-2017

xposted

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ksand52
Member
ksand52
April 29, 2017 10:28 am
Reply to  hendrixnuzzles

Long Nemaska Lithium (NMX.TO – OTC. NMKEF)

You might want to take a look at Nemaska Lithium. I picked them up this time last year ( a little too earily ) but here is a link to their webpage press releases for 2017. They are on a good role, and they are already sending processed samples to potential customers for testing and evaluation

http://www.nemaskalithium.com/en/investors/press-releases/2017/

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secretsquirrel
secretsquirrel
April 28, 2017 4:40 am

We continue to highlight our belief that the rise of electric vehicles will continue to drive the cobalt price higher. “By 2020 there will be over 120 different models of EV across the spectrum,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “These are great cars. They will make the internal combustion equivalent look old fashioned.”

https://t.co/7e8rlISqQb

1.48 Target price.

$CLQ

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secretsquirrel
secretsquirrel
April 28, 2017 4:41 am

We continue to highlight our belief that the rise of electric vehicles will continue to drive the cobalt price higher. “By 2020 there will be over 120 different models of EV across the spectrum,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “These are great cars. They will make the internal combustion equivalent look old fashioned.”

https://t.co/7e8rlISqQb

1.48 Target price.

$CLQ

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secretsquirrel
secretsquirrel
April 28, 2017 4:02 pm

Tale of the Ticker: Colorado Resources Ltd (CXO.V) Moves on Volume

April 27, 2017

https://tuckermantimes.com/tale-of-the-ticker-colorado-resources-ltd-cxo-v-moves-on-volume/168294/

Long CXO.V

I like this mainly due to their location and the size of the area they exploring.

They still need to hit the right spot but there we go….

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secretsquirrel
secretsquirrel
April 29, 2017 7:43 am
Reply to  hendrixnuzzles

Yes my mistake, sorry, will re post original over there as cannot edit here now.

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rubberworm
Member
rubberworm
April 29, 2017 11:34 pm
SoGiAm
May 3, 2017 11:10 pm

$CLQ, $CTEQF LONG – May 2017 Investor Presentation – Macquarie Conference
Clean TeQ Holdings Limited (CLQ:ASX; CTEQF:OTCQX) (‘Clean TeQ’ or ‘Company’) provides the attached Investor Presentation which will be presented at the Macquarie Conference today by Managing Director, Mr Sam Riggall.
http://clients3.weblink.com.au/pdf/CLQ/01854320.pdf

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niizajim
May 5, 2017 9:26 pm
Reply to  hendrixnuzzles

Hendrix, why do you think they don’t even mention the water purification business. Seems to me that could provide some financing for them if it gets up and going, but maybe not enough time. Still, that seems like a very exciting opportunity and they don’t even mention it.

Does that mean it is not a priority for them? Seems like their focus us 100% on Syerston.

I’m down a good bit on my small CTEQF holdings, but this is a good buying opportunity. Just wondering how long term it might be.

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niizajim
May 6, 2017 8:49 am
Reply to  hendrixnuzzles

It sounds so good to me. I would think they would have no trouble finding customers, but I guess proof of concept for new technology and cost for adopting said technology can be high hurdles to overcome. Hoping for series of orders yet this year!

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alanh
May 6, 2017 4:51 am
Reply to  hendrixnuzzles

HN: I wouldnt be at all surprised if they eventually spin it off as a stand alone company once they have a few adopters.

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niizajim
May 5, 2017 9:30 pm
Reply to  hendrixnuzzles

When you say they are partnered with them, is it a licensing agreement where the other guy runs the show and just uses CTEQFs technology or is it more of a joint partnership where they share costs and both are actively involved?

It’s good to see their technology getting some press!

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rubberworm
Member
rubberworm
May 5, 2017 9:45 pm
Reply to  niizajim

“The truth of the matter is that they have not “acquired” the technology. We have a partnership agreement under which they effectively act as a distributor for us in the African market.”

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rubberworm
Member
rubberworm
May 5, 2017 10:08 pm
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alanh
May 6, 2017 7:16 am

Scandium: Its fascinating to look stuff up. I just read this and found alsorts of possibilities. http://www.livescience.com/29071-scandium.html
”The 2010 study described several processes for the recovery of scandium from several resources. Scandium is primarily recovered as a by-product of mining other ores such as uranium, aluminum, titanium, zirconium, and other rare-earth ores. ”
So what else could Cleanteq find down there?
”… the first uses for scandium-aluminum alloys were primarily fueled by the Soviet military. The alloys were mainly used on the MIG 29 fighters and in missiles due to their advantages over the most common alloys…”
”….. a British astronomer and writer, scandium is also used in alkaline batteries, as a catalyst (as scandium oxide), and to improve germination of plant seeds (as scandium sulfate). ” A fertiliser?
” the total amount of scandium produced in the United States is regarded as a “trade secret in the industry” and is not announced.”

And the killer line (where Im probably adding 2 + 2 and getting 5)
” According to Minerals Education Coalition, hydrogen gas is released during a reaction when water runs over scandium due to a reaction with the oxygen in the water.”
A fuel source created by separating water into its components of oxygen and hydrogen, where the waste product is….pure water without any loss!! (a pet interest of mine since school)

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rubberworm
Member
rubberworm
May 7, 2017 1:10 am
alanh
May 7, 2017 9:19 am

Cleantec: Been perusing the charts. Ive entered a buy at 45 but will review the 50/20 MA’s. The stochastics look right, Fibs looks to have bottomed. Ripe for a trade. But this is really a buy and hold conviction stock.
IVN.T: Would like this at 4 where theres support….but 4.20 may be too close to call. Stoch’s look right. Fibs looks right.
PGM: Looks to bounce at .070. May have a little trade in/flutter there.

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Johnnn
Guest
Johnnn
May 8, 2017 4:19 am
Reply to  hendrixnuzzles

No doubt tomo in London Friedland will be talking up Ivanhoe rather than clean teq again

secretsquirrel
secretsquirrel
May 8, 2017 6:39 pm

The Cathode is the Key to Advancing Lithium-Ion Technology
May 8, 2017

http://www.visualcapitalist.com/cathode-advancing-lithium-ion/

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rubberworm
Member
rubberworm
May 10, 2017 12:51 am

Friedland picked up 900 something shares @60 cents May 8th it seems. That was the low of the day. Looks like he was sitting in for support of the Bid IMHO. Have no idea how many shares where sitting there at the time. http://clients3.weblink.com.au/pdf/CLQ/01855843.pdf

rubberworm
Member
rubberworm
May 10, 2017 1:08 am
Reply to  rubberworm

It was 296 shares Friedland picked up that day. But it says a lot to me and cost him little to put his finger in the dike.

Johnnn
Guest
Johnnn
May 10, 2017 3:48 am
Reply to  rubberworm

One could conclude a low ball takeover bid is coming

niizajim
May 10, 2017 7:02 am
Reply to  Johnnn

I don’t understand your reasoning here. Could you explain please?

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Johnnn
Guest
Johnnn
May 10, 2017 7:32 am
Reply to  niizajim

Pushed down Asian broker – hotcopper says UBS . speculating

secretsquirrel
secretsquirrel
May 10, 2017 7:55 am
Reply to  Johnnn

Johnnn,

Not going to happen in a million Sundays mate!

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Johnnn
Guest
Johnnn
May 10, 2017 8:08 am
Reply to  secretsquirrel

UBS missed the first run they sure aren’t going to miss the next one – something big is up – whos falling for the games???

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secretsquirrel
secretsquirrel
May 26, 2017 6:31 pm
Reply to  hendrixnuzzles

Friedland being based in Singapore, which imo is possibly the most perfect place to live and do business is no doubt busy getting on with the job at hand. Yet to see any sunbathing beach shots….

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rubberworm
Member
rubberworm
May 10, 2017 10:37 am
secretsquirrel
secretsquirrel
May 10, 2017 10:37 am

https://seekingalpha.com/article/4071608-clean-teq-friedlands-nickel-cobalt-scandium-gem

Summary
Robert Friedland bought into the Melbourne-based group in 2013. In 2014, Clean TeQ acquired the world-class Syerston Nickel Cobalt Scandium Project in New South Wales.
Initially branded as an advanced scandium play, Clean TeQ decided instead to reposition the project as a nickel-cobalt play with scandium added to the equation as a by-product.
The prefeasibility study assumes construction commencing in early 2018, with first production forecast to occur in late 2020 and full year production expected in FY22.
Clean TeQ formed strategic partnerships with leading Chinese conglomerate Pengxin Mining and APWorks, a division of Airbus.
Clean TeQ to become one of the largest and lowest cost suppliers of nickel and cobalt sulphates, and has the potential to produce fivefold the current global scandium output.

Big article on CleanTeQ……

Long CLQ

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hedy1234
hedy1234
May 10, 2017 10:53 am
Reply to  secretsquirrel

Thanks for posting. I was going to as well
$CLQ

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Griffin
Griffin
May 10, 2017 8:17 pm

$CTEQF – I’m not sure how this fits but you may remember that CleanTeq has partnership with Ionic Industries to develop graphene membranes IIRC. Ionic Industries sent me a investment opportunity. I couldn’t find ASX stock symbol or link to this news so here is a cut&paste;
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dear Ionic shareholders and supporters,

It is with pleasure that we announce the launch of several capital raising initiatives:

A non-renounceable entitlements offer to members on the basis that each eligible member will be entitled to apply for one (1) ordinary new share at an issue price of $0.01 (1 cent) for every two (2) shares held at the record date to determine entitlements to the issue to raise up to a total of $2,299,761 (rights issue)
A general offer to investors of up to a further 50,000,000 shares new shares at an issue price of $0.01 (1 cent) to raise up to a further $500,000 (general offer).

All allottees of new shares will be granted (free of further cost) an option to subscribe for a further new share exercisable up to 30 june 2020 at an exercise price of $0.02 (2 cents) for every new share allotted to them.

Under the Tax Laws Amendment (Tax Incentives for Innovation) Act 2016:

You will be entitled to a carry-forward tax offset of 20% of the value of your investment (subject to certain restrictions and a maximum cap on the offset of $200,000 for any investor).
You will not be taxed on capital gains you realise on your new shares if you hold them for between one and ten years.

This offer represents an excellent opportunity to invest in a company that has achieved a number of successes over the past 12 months, including:

Signed strategic partnership agreements with Clean TeQ and Laminar for commercialisation of water treatment and graphene manufacturing technologies;
Gained extraordinary validation of our water treatment technologies through award of a $1.2 million Australian Governemnt CRC-P grant;
Obtained several patents and rights to intellectual property that will serve as the basis for long term commercial outcomes; and
Commenced the next phase of product development on graphene supercapacitors to deliver advanced prototype devices within 12 months.

These achievements, along with the full range of activities described in the Offer Information Statement (OIS) will ensure that Ionic Industries continues to build value for shareholders.

To access the OIS, please visit the Ionic Industries website:
http://www.ionicindustries.com.au/offer-information-statement-disclaimer/

For those wishing to take part in the general offer, an application form is attached at the back of the OIS.

Existing shareholders wishing to participate in the rights issue offer will receive a personalised application form and hard copy of the OIS in the mail in the coming days.

Many thanks in anticipation of your ongoing support and we look forward to further building this remarkable company.

Kind regards,

Simon Savage
Managing Director
Ionic Industries
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Anyone like to comment?

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niizajim
May 11, 2017 6:08 am
Reply to  Griffin

What in the world is that all about? $CTEQF – small position

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Griffin
Griffin
May 11, 2017 10:39 am
Reply to  niizajim

I just read it again and it made more sense this morn. I appears to be a dilution (of Ionic stock) with warrants that conforms to “Under the Tax Laws Amendment (Tax Incentives for Innovation) Act 2016” (which I think is Australian). This maybe away of picking up shares of a CleanTeq partner cheap. The question is how much do you believe in the partnership.

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