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Peter Emanuel introduces Ucore, its rare earth refining mission, and the company's progress from acquiring Rapid SX technology to securing major U.S. government funding and recent production milestones.
Thanks very much.Uh my name's Peter Emanuel.I'm Chief Financial Officer with Ucore.Uh being Chief Financial Officer, I was sitting in the hallway earlier and and doing some maths.And if the price of gold tracked the price of dysprosium for the last 24 months, gold would be sitting at $36,898.60
as of the end of September.Uh and even over the last 12 months, the price of dysprosium has has gone up by 4 X.Interestingly, at a time when rare earth equities have generally slid and probably fallen from 50 to 80 %.So uh I think the the term contrarian gets thrown around a little bit too much for my liking, but if ever there was a time uh and a place and an opportunity, this this feels like it.Um extrapolating that analogy, imagine a situation where uh you're you're running a company that was on the cusp of constructing the first gold refinery in North America capable of accepting independent feedstock.You can see why we at at Ucore are pretty excited with the world right now.I'll likely make some forward-looking statements.Trust everyone will go through and give that a read a bit later.
It's it's on our website.Our journey down the rare earth refining path really started in in earnest in uh 2020.We acquired a company called Innovation Metals Corp uh and through that acquisition, a technology called Rapid SX, Rapid Solvent Extraction.Uh it's a derivation of traditional solvent extraction, uh the current go-to technology for refining rare earths worldwide at commercial scale.Uh over the next couple years, we really progressed that tech.Uh I'd say bench, but that's a bit a misnomer, a bit larger than bench scale.Uh fast forward to 2023, the the then DOD, the now DOW, to their credit, could see that rare earth refining was going to be a problem.Uh and they were right.Uh in the interest of trying to solve that problem and being proactive, they put out an RFI essentially looking for rare earth technologies that could be demonstrated at commercial scale in North America for the refining of rare earth
elements.My understanding is they got 60 odd applications.We were one of them.Uh through that process, we were awarded a $4 million grant.The purpose of that grant was purely to demonstrate that our technology could process rare earth elements at commercial scale in North America.We did that for the next couple of years.Fast forward again, uh 2025 in May, the the now DOW came back to us, said look, love the tech, love the reporting, love the way you're hitting your milestones.We're happy with everything.We've got another $18 million for you.We really want to progress commercial scale refining of rares as fast as we can.Uh and that's sort of a brief history of Ucore over the last five years ago.More recently, uh we've had some fairly significant developments as well.Uh we've uh we produced samples of NDPR oxide, dysprosium oxide, shipping those to magnet makers for qualification.
Uh with the good folks here at Red Cloud, we raised $69 million over the summer uh to get fully financed for our first stage of production that's expected to come on stream in H1 2027.Uh and interestingly, we had the DOW come back to us yet again with some additional funding for some gadolinium and some erbium processing.Uh and I'll hit a bit more on that later in the presentation.
He explains the current rare earth market backdrop, including price bifurcation, China dependence, and Ucore's business model of buying concentrates and refining them into higher-value oxides.
I'll be honest with you.This is a half hour slide deck and I just realized we've got 20 minutes, so I'm going to skip some stuff fairly quickly here.Suffice to say, people are finally paying attention to rare earths.It's been a long haul.The world is aware.Admittedly, like I say, the equities have pulled back a little bit.Conversely, they're pulling back at a time when the underlying dynamics of the industry are going bananas.So it's an interesting dichotomy we're in the middle of at the moment.I've already referenced rare earth prices a little bit.I'll highlight this slide and the next one very briefly.The the the expectation of the rare earth sector, the industry for the last 10 years has been independent premium pricing for rare earths that are produced outside of China.And it's really over the last 15 16 months we've seen a bifurcation of rare earth pricing where you've got one price for rare earths outside of China and one price inside China.
PRND is a light rare earth oxide.There is some PRND processing around the world outside of China.You can see there's a small premium there for X China production.Dysprosium is the is the one I referenced in my first analogy there.As of today, there is negligible dysprosium refining outside of China and you can see that's reflected in the delta in the price.We've got 200 bucks a kilo for dysprosium in China and it hit 4 grand in September outside of China.So it's a remarkable time for the industry as we see the supply chain come online.Now getting a bit more specific into what Ucore does, most people are aware that 90 95% of rare earth products come from China.What many people don't realize is that only in the range of 60% of the world's rare earths are actually mined in China.Close to 30% of the world's rare earths are mined outside of China, shipped to China where they are refined and they feed that supply chain.
That's where we see the opportunity at Ucore and that's what very much what we're focused on.This is a schematic, you know, shows a rare supply chain similar to any any mineral supply chain.You got a mine on the left hand side of the slide.Do some on-site beneficiation, generate a mineral concentrate, subject subject that to a leaching or similar process.You'll get a chemical concentrate or a rare earth carbonate.This is where the rare earth supply chain is a little bit unique.17 different rare earth elements.They're all found together, commingled together in nature.So if you mine one, you mine them all.You've got to separate them from each other, refine them to a high enough purity so they can be used in metals, alloys, and magnets.And it's that separation and refining step that Ucore is focused on.Two quick things to highlight relative to this slide.
Generally, a rare earth concentrate or a carbonate typically sells for in the range of 60 maybe 65% of the value of the contained oxides.It's a great deal of value add at the refining step.And for that reason, obviously it's a compelling business case for Ucore.And for that reason, we don't intend to toll process for other people.Our business model is to buy a carbonate or a concentrate from some of these mines that are in operation around the world and and shipping to China, refine it, generate purified oxides, sell the oxides.And that opportunity is coming in.You know, it's it's an interesting time in the industry.Some of the existing mines are are making some progress going downstream in terms of generating their own own oxide production.There are a number of new rare earth mines that are coming on stream at the same time.
And while some of them may have aspirations to go to oxide down the road, none of them will be coming out of the gate.And and some are more than happy to be selling a concentrate and a carbonate.And again, that's where we step in here.
The presentation shifts to how solvent extraction works and how Ucore's Rapid SX process improves speed, throughput, and cost while remaining independent of Chinese technology. He also outlines the Kingston test facility and the staged buildout of the Louisiana refinery.
Little bit about the technology itself.As I mentioned, at the moment, all rare earth refining worldwide is undertaken using the technology called solvent extraction.This is accountant's version of a science science topic, so I won't go too deep here, but you've got rare earths in a liquid, you know, leached liquid and acid.You've got extracting chemicals and what they refer to as an organic liquid.Mix the two liquids together.The extracting chemicals bind selectively to certain of the rare earth elements.The liquids then separate out again, and through that process you achieve a separation.Do that over a number of steps.Ultimately, you get a purified rare earth oxide.Rapid SX, rapid solvent extraction, uh, uses the same chemistry, same chemical reagents as conventional solvent extraction.We mix the liquids in a unique way to achieve a faster mixing, but more importantly, a faster separation at the end of end of the process.
Uh, we submit our final report to the USDAW uh, that that was submitted a while ago.Uh, we concluded that the mixing time was in the range of 1.8 1.8 times faster than conventional solvent extraction.The settling time is about 5.4, I think I've got that right, times faster than conventional solvent extraction.Obviously, if you've got a given plant size and you can put two to three times the throughput through it, OPEX advantages, you've got CAPEX advantages, you've got lower reagent use, et cetera.So that's really the benefit that we see.Our technology is completely independent from China.We're not relying on any Chinese technology, uh, or equipment, uh, which is relevant given the ongoing increase in in export controls that China has been implementing over the last couple of years.Uh, everyone was aware, I think, back in the spring of 2025 when China added some rare earths to its export control list.
They added more rare earths to the export control list in October of 2025, but significantly at that point of time, they also added rare earth refining and technology to that export control list.So not only are they trying to restrict the world's access to the elements, in their in the perfect world for them, they'd like to restrict the world's access to the ability to refine the elements as well.Uh so again, important that we don't uh we don't rely on any of that.This is the facility I mentioned uh earlier where we've put um I think it's now in the range of 7,500 hours on this facility, refining rare earths in Kingston.Uh this is where we were doing all the DOW work.It's a couple hours down the road from here.Uh it shows very well.This picture, you know, doesn't quite show the scale of it.
It's both the size of two tennis courts.It's in a 5,000 square foot facility.We've since taken on another 5,000 square feet in the same building uh to amp up some progress and and progress some scale-up testing for our first facility in Alexandria, Louisiana.
We took possession of this building uh a couple years ago.Uh this will be our first commercial rare earth refinery uh slated for for stage one, I guess um uh commissioning in H1 of 2027.We're very much going through a staged approach to ramping this thing up.Stage one is 600 tons per annum of rare earth refining.Stage two is 3,600.Stage three is 6,600.And stage four, ultimately full-scale production will be 9,600 tons per annum uh of rare earth concentrate throughput.And just to get a give a bit of context to that, uh our internal modeling at 9,600 tons per annum uh shows top-line revenue in the range of $800 million US.Admittedly, that's that that modeling was generated before much of the run-up in rare earth earth that we've seen.Like that modeling contemplates I think on average around $475 dysprosium.Uh as as we saw on the earlier slide, we're clearly closer to four grand.
So I'm not sure where dysprosium is going to settle out.It certainly appears as though it's going to be north of our internally projected figures uh and even north of some of the rare earth force uh that we've seen put uh put on by the US government over thelast while.I'll notice as well we've uh we've got a D pass rating uh with respect to this facility.Defense production appropriation systems I think I might have that acronym wrong uh essentially means that our project by virtue of having this D pass rating has to be prioritized by vendors ahead of other unrated projects.Uh so that's proven to be exceptionally useful in terms of minimizing time on long lead items and making sure stuff's coming in the door on a on a timely basis and getting done for us on a timely basis.
He details additional U.S. and Canadian grant funding focused on samarium, gadolinium, and related critical materials, emphasizing that the support has been non-dilutive and tied to milestone progress.
Uh I sort of hit on the US government support already again.We uh we started off with 4 million in 2023, additional 18.4 in 2025 uh and then in September of this year the US government came back to us and said look there's a significant issue with respect to samariumand gadolinium.We've got another 4.6 million dollars.We'd like you to spend some time focusing on that, see if you can accelerate that aspect of your production uh sooner rather than later.And uh it's it's been interesting.I can tell you in our conversations with a number of defense contractors there's significant concern about the availability of samarium and gadolinium.At the moment there's negligible refining of those two elements outside of China.I uh I actually debated using uh the price of gadolinium in my gold analogy at the start, but uh that would would have resulted in gold over 150 grand uh announced.
So it uh it felt like a bit uh a bit too much of a stretch and I didn't bother.It's it's literally gone from $5 to north of $300 uh over the last over the last year or so.Uh Government of Canada for that reason came back to us about a year ago now uh at the meeting of G7 ministers uh for natural resources here in Toronto.Actually close to a year ago to the date here, October 31st 2025 uh announced they've got another $36 million for us in funding on top of a previous $4 million grant uh really to progress samarium and gadolinium processingin Canada.They're very keen to very keen to be seen to be doing their part with respect to the G7.Everyone's aware of the concerns with respect to critical materials.Everybody wants to see those problems solved.All governments are working very hard to get that done uh and that's been very beneficial to us.
I I'll highlight uh this additional funding from the Government of Canada is uh subject to finalization of details if you will.That's been ongoing for a while.Among those details is quite frankly the quantum uh and the amount of the funding as well.I didn't highlight particularly clearly but I should and will that all of the funding we've received to date is straight up grant.So it was interesting.We got the first $4 million from the DOD straight grant and I was in my mind thinking okay surely the next tranches are going to have some teeth in them and they're going to be trying to tell uswhat we can do and what we can't do or claw back provisions and whatnot.There's uh there's none of that.We we hit our milestones.We report to the DOW.We get paid.Uh straight up grant, straight non non-dilutive funding.
So and uh there's ongoing conversations both north and south of the border.We've seen the governments be fairly active over the last year with respect to funding projects.We we still feel quite comfortable by virtue of our relationship with the DOW uh that we're in a full position to see some more funding coming over the next while.
He highlights Ucore's partnership with Sumitomo, the importance of Japan as a magnet market, and the broader outlook for rare earth demand, government involvement, and investment opportunity before opening the floor for questions.
We've got some great partnerships.I heard Dana one mentioned the relationship with Sumitomo.Uh we announced our relationship with Sumitomo back in the summer and to be honest with you, I think the market very much under appreciated the value of that relationship.Sumitomo has been involved in the rare sector for 30 years both inside of China and outside of China.Uh they you know most people are aware that 90% of magnet making happens in China right now.Of the 10% that's happening outside of China 90% of that is happening in Japan.There's no better partner to be selling product into Japan than Sumitomo.Uh and while there's lots of fantastic magnet making projects coming on stream today as of this very moment the vast majority of it's happening in Japan.So so they're a great ally to us.Personally I found it fascinating and watching them operate.
They've been to our facility in Kingston 10 times over the last few years and I'll admit it took me about five times to figure out what they were doing and basically what was happening is every time a decisionmaker was coming from Japan our New York team was bringing them to Kingston to make sure they were on board and doing what we were doing.So they're a great ally.Really quick summary given I've got about 30 seconds left.Uh we're at a fantastic time for the sector.Double digit growth projected over the next while coming back again to the robot analogy.Uh you know 30 I think it's 3 million humanoid robots takes up the entire annual world's rare magnet supply as of today.Uh I don't know if anyone's buying into Musk's billion robots by by 2035 but clearly that's going to suck up a lot of the current production.
Uh there's no doubt about it.We're seeing governments get on board.Uh we're seeing prices react remarkably and you know everyone's got their own opinion but but I I I I quite frankly the market the equity market got maybe a bit ahead of itself about a year ago.I think it's way overreact overreacted the other way and sort of this off risk and penalizing pre-revenue companies over the last five or six months and I think there's a real opportunity here.That's it for now.I can take a few questions.I'm going to highlight I got a bit of an ear issue going on here so like scream at me like you're speaking to your 90-year-old deaf grandmother.