The following interview was conducted on May 15th-18th via phone and email by Peter Epstein, CFA, MBA. The opinions expressed herein are entirely those of the three named individuals. Please see a direct link to applicable disclosures and two excellent links regarding Ucore Rare Metals (OTCMKTS:UURAF) at the bottom of the interview. Ucore Rare Metals is a speculative, small cap company that may not be suitable for all investors. Readers should conduct their own due diligence, including visiting the company’s website and consulting with their own investment advisors. Note: [This article does not incorporate news released after May 18th. For instance, an important press release was released on May 20th. This and other news flow will be addressed in subsequent article(s)].

I would like to thank Steve & Reed Izatt, PHD of IBC Advanced Technologies and Mark McDonald of Ucore Rare Metals for taking a considerable amount of time answering follow up questions I had about Molecular Recognition Technology, “MRT.” I grilled the Izatts about Ucore’s proposed use of MRT because my prior article on Ucore Rare Metals attracted some criticism. Skeptics are to be expected and management, technology partners and independent advisors are available to discuss opposing points of view. Over the decades, “new” technologies in the processing of metals & minerals have been fraught with failures. I believe some of the pushback on MRT might be from painting all new technologies with the same brush.

In doing research on peer REE juniors, several propose the use of their own separation technologies. My view on MRT is that it’s one of several that might come to fruition in coming years. However, MRT appears to stand out in that it could be used for third-party processing or reclamation applications. That would allow Ucore to generate revenue this year or next. Other company’s proposed separation technologies seem to apply solely to their own projects.

My intent in interviewing the Izatts and Mark was to better understand what they believe, (biased as they are) and convey that view so that readers can make their own judgments.

Peter: There’s been both skepticism and supporters of MRT. Have you received more or less skepticism than youexpected?

Steve: I think that people have their own agendas. I don’t mean that in a disparaging manner, just that potentially revolutionary technologies always face skeptics. The REE investment space has historically not been populated by people with scientific or engineering backgrounds. It’s easy to say something won’t work. But the discussion should center on chemical and engineering principles. Persons with processing and technical backgrounds have spoken favorably of our technology and its scalability.

We have separated the entire suite of individual rare earths. This offers incontrovertible proof that our MRT process works at lab scale. We have scaled up numerous other projects outside of REEs based on our proprietary SuperLig® products. The proven separation characteristics of MRT, coupled with our actual accomplishments in scaling up similar processes should give investors significant confidence.

Peter: It’s my understanding that the MRT process is more of a physical or mechanical process?

Steve: The MRT process uses selective SuperLig® resins incorporated in columns through which REE-containing, Pregnant Leach Solution(s), “PLS” are pumped. We have designed proprietary SuperLig® products consisting of silica or polymeric beads to which selective chemical ligands are attached. These ligands selectively coordinate (or bind) the metal of interest based on coordination chemistry principles. Unwanted metals pass on to the raffinate. Once bound to the SuperLig®, the targeted metal can be stripped (or eluted) off the column in pure form through contact with dilute acid, which causes the ligand-metal bond to part. The SuperLig® beads are contained within columns. The PLS is pumped through the columns and the REE are selectively separated, first from the gangue metals such as iron, aluminum, uranium, thorium and then from each other. IBC has been installing similar processes for over 25 years. We’re confident about the scalability of the process and that it will be green and low cost.

Peter: Does anyone have reasonable skepticism about aspects of MRT that you believe have merit?

Steve: The science underlying MRT is sound, evidenced by hundreds of peer-reviewed publications and prestigious awardsfrom the American Chemical Society and others. The 1987 Nobel Prize in Chemistry went to three pioneers in the field of molecular recognition: Pedersen, Lehn and Cram. Dr. Reed M. Izatt and his co-workers at Brigham Young University made key advances in MRT. Dr. Izatt’s team proceeded to establish the thermodynamic properties of selective metal interactions with a wide range of novel macrocyclic ligands, including those involving attachment of the ligand to solid supports or beads.

This ground-breaking work allowed for commercialization of MRT in the metallurgical industry. MRT is supported by world-class science in its development and commercial applications. Both the chemistry and engineering of the MRT processes is well understood. We are very familiar with the key parameters necessary for successful scale-up and commercialization. In the case of the lanthanides, it is critical to first separate the REEs, as a group at high recovery and high purity. This preserves the value of the REEs contained in the PLS, as essentially all of them are recovered, and allows for subsequent simplified separation of the individual REEs at high purity from a solution that does not contain impurity metals.

Reed: The thing that people might not understand is that initial separation of the suite of REEs from the PLS is crucial, otherwise you have metals and materials from the original ore that follow through and must be separated in subsequent steps. If you have already removed the impurity metals, subsequent separation of individual rare earth metals is simplified (fewer steps).

In the cases I’m familiar with, the selectivity and recovery of the REEs from pregnant solutions that other technologies treat come in at far less than 99+%. Some in the low 90%’s. Even then, one still has to deal with an appreciable amount of junk material complicating the separation process. Further separation of individual REEs is greatly simplified once you’ve gotten rid of the deleterious materials. Less selective methods such as solvent extraction, ion exchange or chromatography, strongly bind the target metal and let the other metals flow uninhibited. This is especially true for metals such as REEs that are chemically very similar to each other. This problem is avoided using IBC’s proprietary SuperLig® resins because the ligand is pre-designed to be highly selective for only the target metal so that the target metal remains stuck to the resin until released with an eluent (or stripping agent).

Peter: Without naming any names, how aware are you of other REE separation technologies?

Steve: With our long history in separations chemistry we are, of course, familiar with most of the different technologies currently being evaluated. These technologies can be very effective in specific environments in the broad field of chemical or biological processing. However, in the world of metals processing and separation, where we have focused our careers, we believe that the most important attribute of any technology used for separating metals is selectivity. This is especially true with highly similar groups of metals such as platinum group metals (PGMs) and rare earth elements (REEs). IBC uses multiple chemical parameters to create ligands that are extremely precise. These proprietary ligands, attached to solid supports or beads (SuperLig®) provide the basis for the superior selectivity used in the MRT process.

Our company would not view a purity or recovery number in the 70%, 80% or even 90%+ range as a ‘true separation’. In our world, separation means that one does a complete separation i.e., > 99%. Once you’re at >99% you can increase purity to as many 9’s as you want to meet commercial requirements. The importance of high selectivity can easily be seen by simple math. If a process achieves only 75% separation then it must take the 25% and get 75% of that, this process must then continue for many stages to arrive at a purity of > 99%. In contrast, one of the main advantages of MRT is that it maintains high separation coefficients (binding constants) even at very low concentrations. Thus, high purity can be achieved cost-effectively and quickly.

Peter: With MRT, you guys have put it out there,  >99% purity & >99% recoveries….

Steve: Yes, and the purity results obtained by IBC have been validated by an independent laboratory.

Peter: In the case of solvent extraction, one gets 99% purity but only 60% or 70% recovery, is that right?

Steve: Yes, even if it’s more like 70%-80% recovery, recoveries are very low compared to MRT. Although commercial purities are ultimately achieved, hundreds of separation stages are required. This means high cap-ex and op-ex as well as long processing times and the generation of large amounts of waste.

Peter: So, are you saying that you’ve achieved the target purities for potential customers of Bokan REEs?

Mark: We have been testing MRT specifically on our Bokan ore. The goal to prove the process on Bokan ore has been met. Our testing of the MRT separation process has gotten us plus 99% purity, which was the objective. The next step is get the purities needed for specific customers. We’re talking to lots of different customers. We have already produced the full lanthanide suite at + 99% (at lab scale) which would be a very salable purity for all rare earth metals.

Steve: The MRT system can achieve the required purity at lab scale, but it’s wasteful to get purity for purity sake. We believe the best approach is to survey customers and understand their needs. It may be that certain customers can tolerate certain impurities but not others.

Reed: The rare earths are a unique set of elements, some are very valuable to certain customers and others are hardly valuable to any customer. When one separates them one will get a number that are not of much value and one has to worry about what to do with those. Having a process, such as MRT, that’s able to selectively pull out some, but not others, is a very valuable proposition.

There has been quite a bit in the literature about this point, the fact that low-value REEs are being produced and there’s really no market for them and they just pile up. It’s only a few of the REEs that are needed. As Steven points out, different customers will need different REEs at different purities. It’s wise to do as Ucore hopes to do, from a base purity of >99% ask customers what their specs are and tailor-make the separation.

Peter: Say you’ve got 99.9% purity, but a customer wants 99.99%. Does that mean you run it through MRT one more time?

Steve: Yes, the MRT system can easily be engineered to achieve additional separation stages. However, depending on customer requirements, a different type of SuperLig® that selectively extracts the specific impurity can be used as well. This is one of the great advantages of MRT. We have multiple SuperLig® products that can be used in concert, to meet customer requirements.

Peter: If you’re toll milling REEs from around the world, how different is each PLS, and does that require making a lot of changes?

Steve: Remember that the first step in our process is to separate the REEs from the gangue metals. Once the REEs are separated, as a group, we would apply the same SuperLig® products to their individual separation, regardless of the source. Now you’ll probably have different percentages of each individual REE in different feeds, but the MRT system can be engineered to handle varying percentages. Different sizes and numbers of SuperLig® columns can be used, as needed.

Peter: Circling back, is that to say that in other technologies no matter how good they are, recoveries would be less than 99%?

Reed: We assume so. Without the numbers we can’t tell. However, some of the other technologies appear to have low selectivities and weak metal-ligand binding constants or separation factors, suggesting they will have materials, such as iron, aluminum thorium, etc. as impurities, as well as mixing of the rare earth metals. They might not be able to selectively remove those impurity metals and get pure individual rare earth metals without added costs, substantially longer processing times, and generation of appreciable waste.

Peter: Steve and Reed, how much of your time is devoted to the development of MRT for REEs? Is this just one of many projects that you’re working on?

Mark: IBC is in business to make a profit. Because we have such a lucrative opportunity, they’ve been good enough to give us as much capacity as we’ve required. Our assessment is that IBC has all of the laboratory and production capability needed to fully capitalize on the opportunities. The next major priority for us is the pilot plant. We’ve been inundated with opportunities since our early March announcements about the success of MRT at lab scale. Immediate opportunities to use MRT, not only in the rare earth space but in recycling and tailings processing, have been presented.

There’s potential for near term revenue to be generated from MRT. However, our number one priority remains moving ahead on the Bokan HREE project. IBC and Ucore have been able to work very effectively together to this end. We have met with potential customers and are actively discussing opportunities. We’re already under contract with numerous Fortune 500 companies that want to move their separation programs forward inside an ongoing testing phase. So we’re very engaged.

Steve: I would think this fact would be very interesting to investors. Ucore is now, as far as I know, the only junior REE company that can realistically state that it has an additional technology-based revenue model, other than the basic supply of mixed rare earths. What’s more, that revenue model has already been proven up in numerous other mining sub-sectors, from PGM’s to specialty metals. So, Ucore is essentially taking a proven business model, one with a decades-long track record, and transposing it into the rare earth sector. I think this is fantastic because I know how much money a model like that could possibly generate.