Asian Metal: Thank you for taking the time to speak with us today, Andre. Congratulations on reaching this stage, it's always an exciting period in the lifespan of any mining project.

Looking over what the company has just announced, it positively confirms a lot of what was already known. I think the general consensus has been for a while now that Kipawa is a great and high quality project with some very interesting rare earth content.

How would you summarise Matamec’s key strengths at present, particularly with regard to the conclusion of the feasibility study?

Andre Gauthier: For us, another major step is done. Each step of the project requires an economic assessment. You have to be sure that the project is viable economically and technically. The study showed that we have had positive results, which is very good.

Also, we increased the mine life from 12.9 years to 15.2 years, and also have the potential to increase the mine life with further detailed engineering. The deposit is such that we can conduct another drilling campaign to prove that we can increase the resources.

Another point that is important is in regard to the PEA. The precision of the study is +/-35%, and what our shareholders and investors should know is that we increased the CAPEX by 18% - under the 35% - but we decreased the OPEX by 13%, which is good news. We know that we can also optimise the project on the IRR. Pre-tax is around 22%.

We know that we can increase rare earth recovery. Many good things have come out of this feasibility study.

Asian Metal: Yes, I noticed in the study that you mentioned that there is a lot of scope for increasing the project with potential to develop zirconium and some of the minor metals at the Kapawa project.

Andre: Zircon, yes, we also have gallium, fluorspar. About 40% of the tonnage itself is fluorspar but we are focussing at present on the rare earths. When it is proven that everything is in order with the rare earths, we will then look into processing the other by-products.

Asian Metal: Integral to this project is its economic feasibility. Obviously you have confidence in the long-term price of rare earths otherwise we would not be here having this conversation today.

How about over the past 18 or 24 months, though? Falling rare earth prices must have been a worrying trend for a project at such a crucial stage.

And what about now? We have seen an increase in prices over the summer due to China's export policies - do you think that prices have bottomed and that we are at the start of a an era of higher rare earth prices?

Andre: Our prices are forecasted for 2016-2020, but what we know and we have confirmation from Toyota and other big players in the industry is that the warehouses and many other companies are full for many months and we have seen a lot of price decreases. For the last two months we have seen a new trend of buyers coming back to the market.

From now to the time we are in production in the next 18 months, we have time to see if the trends we expect are confirmed. If this happens it is a good sign for industry.

Asian Metal: And so where do you see the key drivers of growth coming from - is it consumer electronics, hybrid vehicles? Is it all demand from East Asia?

Andre: Many industries. It is coming from the car industry – hybrid and electric and with wind turbines…

Asian Metal: And this is where the joint venture with Toyota comes in?

Andre: You know better than us, each rare earth has its own market and you have to analyse each one element by element in order to understand the key trends. We consulted many industry experts – including Asian Metal – and we feel confident that everything will be OK for the future!

Asian Metal: In general, I feel that demand for rare earths is relatively limited at the moment. Do you think that the development of projects such as Kipawa will spur on greater reliance on rare earths as consumers have increasing confidence in the sector's sustainability?

Andre: Yes.

Asian Metal: Moving on to a broader theme, more companies outside of China are either now producing or are reaching a stage where production is looking more and more feasible. What would you say the greatest challenges the sector is facing - from an operational, market and even geopolitical perspective?

Andre: For me, the greatest challenge to the sector is the financing of projects. The sector in general is facing a crisis in many ways, but the financing is the key.

If you can raise money whilst you are in the feasibility stage, like we have, and have cash in the bank also then you are in a good position. We think that a lot of our competitors, our peers, are not at the same level. And also, I think that a lot of people in the past have said a lot of things, which now they have to prove.

From the beginning in 2007, when we started this project, we have always said the same thing. We work with world experts Tony Mariano on the mineralogy, or Les Heymann in 2007-2008. Dr. Mariano said on the mineralogy side at the very beginning that we had a chance to compete with China. Mr. Heyman, on the metallurgy side, said that if you can develop the metallurgy for silicate and skip the filtration problem with the silica gel, and with the nature of your mineralogy and everything you can compete and add sufficient resources- You will be able to compete with China … and we are well on the way to demonstrate that.

We said at the beginning that the key is to have good mineralogy and to have sufficient reserves. The metallurgy comes in at the end. And, also, the pricing. If you have all of these on your side you are on the way to having a very good project, and ultimately, to becoming a future producer.

We are a rare earth deposit. With the grades that we have demonstrated we are on the way to being economic. If it was just the lights the we are not economic, but with the heavies it becomes a very good thing.

So, regarding the sector and the problems that exploration companies face, financing and mineralogy are the key issues.

Being located in Canada, in Quebec is very important. We have the support of the Quebec government … The Quebec Government considers us to be a strategic project for the province.

Asian Metal: You have pre-empted my next question with that answer, which was going to be about mining in Canada. A lot of the rare earth projects currently in development outside of China are in less stable parts of the world. Working in a place like Canada, with one of the most advanced mining economies out there, must have a lot of advantages to it.

Andre: Yes. In addition, we are lucky. You probably know that the only source of niobium in North America is located in Quebec. We also have the biggest strategic deposit of titanium. We can now add a third one with the rare earth project. The support of Quebec’s government over the past 60 years has been key to making this happen.

It is also good from the U.S. Government’s perspective. Some rare earths are key components in North American defence. This is another good thing for the development of our project.