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30 SMT007 MAGAZINE I JUNE 2022 the meantime, the price goes up, and long term, it comes back down as new mines come on. When you get into things like germanium, and the rest of your rare earths, these are all required by the industry—not in great quanti- ties, but there's still a requirement. For example, F35 jet fighters can't fly without some of these metals. On the U.S. and Canada's list of critical minerals, you'll find all the minerals that are dif- ficult to find. Basically, the more difficult it is to find, the longer it takes you to develop the mine. Johnson: We're talking 20 years to develop a mine for copper. What does that mean for min- ing something like germanium? Dykes: What takes you 20 years is when you're starting from scratch. is means you've got to get your drills in there and drill it all out because you never know how much success you will have in developing it. Every deposit is differ- ent. What's fun about geology and engineering is there are no two deposits that are alike, and you have to start from scratch in every one of them. And it's not common to get these metals all in one place. You must go to different areas of the world to find some of these metals and in the right type of deposits. ere may be deposits we found 30 years ago, but now because germanium is $9,000 a kilogram, it suddenly becomes economical. ere are one or two mines in the U.S. that have been sitting there for 40 years, and sud- denly, we say, "Hey, we need rare earth." You can then develop them fairly quickly because a lot of the work has been done previously. Once geologists find a deposit, you've got three choices: walk away, put it on the shelf, or start developing it. Johnson: Shaun, your industry forecasts out 20 years. Did the mining industry see this spike coming in the demand for electronics? Dykes: I would say some did. at'd be about 5% of those making forecasts. Work tends to slow down during the low-price environments and increase during the high prices, which is backward from the way it should be done. Investors tend to finance things when the price is high and going up. So, you raise the money to do the work while in a high price environment. By the time you get to production, the price has dropped. A perfect example was in 2008. e molybde- num price was high at $40 a pound; a mine was fully funded, and even started ordering the equipment for the mill. Everything was eco- nomic and looked really good. ey did all the work producing the bankable feasibility study, which took them four years to do. By the time they completed the feasibility study, the moly price had come down to $10. e mine wasn't economic any longer. It's 14 years later and the mine is still not in production. e mining industry must work the other way. You really have to be able to do all the ini- tial work during the low-price environments and then build your mine when the high price environment comes about so you can get your payback fairly quickly. Unfortunately, the financing doesn't work that way, except for the 5% of the financiers who can see that and say, "is is going to be economic sometime. Let's fund the work now and be ready for the next high price." Johnson: Do those cycles have some regularity to them? Dykes: ere are so many factors that control these cycles. I wouldn't say they're regular, but it's normally five to seven years. In the time I've been around, we've been through about five or six cycles. ey're all over the place with it. Again, it all depends on what happens. e cycles will likely get slightly longer because, to reduce the metal prices, you have to increase the supply. Over time, the supply side is not as fast to deliver the increase because the high-grade deposits are not there, longer timing, and every- thing else, so it stretches them out a little bit.

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