Medallion Resources (TSX-V: MDL) CEO Mark Saxon on the Checklist when Siting a Rare-Earth Element Production Facility

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Medallion Resources (TSX-V: MDL)(OTC: MLLOF), Mr. Mark Saxon. Mark, how are you?

Mark Saxon: Gerardo, good afternoon. Doing very well.

Gerardo Del Real: Listen, I'm reading through your most recent bit of news here and the headline reads, "Medallion Completes Siting Study for North American Rare-Earth Element Production Facility." I must admit I excite a bit because when I read through the news it sounds like the state of Texas, which I currently reside in and call home now, is right up there on the leaderboard. Is that an accurate interpretation there?

Mark Saxon: Yeah. Obviously, Gerardo, we've been a little more general in our release to say the Gulf States, but certainly the Gulf States of the U.S. have many natural advantages, let's say, in terms of what we're trying to do. I suppose the unique thing with what we're doing in Medallion is that we're using a by-product feedstock. 

That by-product feed stock is produced in many places, many mines around the world where mineral sand production takes place. We're going to pick that up and take it to the place for processing where it's optimized. It's got the best cost. It's got the best waste management. We really can be selective about where we operate. We've gone through a whole checklist of features that are important to us and important to the economics of the project. Texas looks really good and that whole Gulf States region has access to chemicals, highly skilled people, political support, all the things we need for a very successful production.

Gerardo Del Real: As I'm sure you're aware, Tesla not only is building a gigafactory out here, but also a processing facility. I have to believe this only increases the visibility and the attractiveness of the state, right?

Mark Saxon: Yeah, absolutely. I guess the old saying of doctors, surgeons siting themselves next to McDonald's. Really the same thinking applies here that I'm sure the thinking process that Tesla has been through to choose Austin, Texas, that area where we you're based is exactly the same thing that we've been through. You need skilled people. You need competitive power. You need great transport networks. You need coastal access, chemicals, people, all those things. Texas obviously has that and so we're going to end up in similar locations, but for different reasons.

Gerardo Del Real: Now, the study was designed, as you mentioned in the release, to compare U.S. and Canadian localities. Can you walk me through what that checklist looked like?

Mark Saxon: Yeah, for sure. Really, we're a Canadian company. We've been optimistic about working in Canada as well. We continue to keep the door open on that one, but I guess the colder climate, the coastal access is not as good in Canada, obviously. The U.S. has, particularly on that East Coast, has multiple port access. The petrochemicals industry obviously produces a lot of by-product chemicals that are suitable for a monazite process. Those things, I guess, put us firmly in the southern U.S. – and transport networks as well, obviously. The Gulf Coast and moving a little bit further towards the west gives us access to flat land, reasonably low rainfall. Probably heat rather than cold is a problem there. But that's fine for our processing. That's an advantage. When we line those things up, then we're not excluding anything. Then we're happy to talk to all regions and have those discussions. Texas does look good.

Gerardo Del Real: You make mention of how transferrable the technology is, which leads me to believe that this isn't a one-off. With a mine, you find, let's say, a gold deposit, you build a mine. You have one mine, and that's the deposit that you mine out for the life of it. Right? The cashflow generated is what it is with the one mine. But with this technology, the Medallion and monazite process, this is something that I believe seems scalable and something that you could simultaneously plug and play in different locations. Is that accurate? Do I understand that right?

Mark Saxon: Yeah, absolutely. The scoping study that we've done in terms of siting in the U.S. is the first one. We liked the U.S. because the customer development is very good in the U.S. and the rare-earth security in the U.S. is very poor. So it ticks a lot of boxes there for us. But as you say, this is a very transferable technology. We can consider picking up the technology and taking it really to any location in the world where we have, again, a similar list of positive features, but we could certainly operate on a mineral sands mine site. 

We can operate in chemical hubs and refineries and other locations around the world. We really aren't limited to just one location. As you say, when you build a mine, you're stuck with the infrastructure you've got. You're stuck with the location and the climate condition. For us, we're really able to choose the best of all worlds. We're able to put our facility in the best location in terms of both profitability and customers and access to raw material.

Gerardo Del Real: I have to believe that the RARE Act, which was endorsed by Vicente Gonzalez here of Texas, amongst others, had to have played a part in the company, Medallion, aligning itself with a bipartisan group that seems at the very least on the surface to understand how important it is to establish a secure critical mineral supply chain. Is that accurate, Mark?

Mark Saxon: Most certainly. That announcement of the RARE Act came through at really just the perfect time for us as we were finalizing the decision process with Stantec on the siting study. Understandably, U.S. politics at the moment is coming to a head in terms of the election and to see something that is bipartisan out of Texas is great. It really shows that state and that region is focused on what happens after the election, not just what happens before the election. Both those senators have shown long-term vision and good thinking about bringing industry to their state and also bringing security to the U.S.

Gerardo Del Real: Imagine that capital goes where it's treated well.

Mark Saxon: Yeah, exactly. It's not that hard to work that out, I suppose. We want to invest in a place where people want us to be and that tax revenues and the downstream business of rare earths are fairly substantial. I think, as you know, the U.S. at the moment, doesn't have a rare-earth magnet maker. So by what we're doing and building the foundations, I think we can attract a fairly substantial magnet maker behind us. I think that Texas is a smart place for that. You look also at what Lynas Corporation out of Australia has done in collaboration with Blue Line, and again, that's in Texas. We're all following the same playbook in terms of how we make it.

Gerardo Del Real: What comes next, Mark? What are the next steps?

Mark Saxon: At the moment we're preparing for what we're calling a Techno-economic study, which is essentially a pre-feasibility scale study to understand all the final decision making points in our processing. We've really completed, I can say 95% of the physical test work that we need to do on this process. Now there's always optimizations and improvements, and that will happen up until the day we build, but most of the heavy lifting is done there. Now it's about the final economics and some of the real design decision we need to make.

Gerardo Del Real: Excellent. Mark, thorough update. Anything else you'd like to add to that?

Mark Saxon: No, I guess the last comment would be that either tomorrow or Monday, we will be seeing an upgrade of our listing to the OTCQB. So that'll certainly make our shares more accessible to U.S. Shareholders. Trading there as M-L-L-O-F and obviously our senior listing is in Canada with MDL as our ticket, but getting stronger in the U.S.

Gerardo Del Real: Good timing and congrats on executing well. When we began to tell this story, I believe shares traded around the $0.06 or $0.07 cent level. Right?

Mark Saxon: Yeah, that's right. We've got some good momentum and just the story makes sense. It's easy to market a story that makes sense. We're in that position at the moment so I feel very fortunate.

Gerardo Del Real: Perfect. Congrats, Mark. Thanks again.

Mark Saxon: Thanks, have a good evening.