Coffee with Samso Episode 203 may well be one of the best ASX small-cap resource businesses in 2025, that is largely unknown to the general investing community.
The Cyclone Metals Limited (ASX:CLE) is about the pedigree of the Iron Bear magnetite project. In Australia, the general ASX punter thinks of iron ore as haematite greater than 62% Fe, but there is a new sheriff in town and he is called Magnetite.
Where can you find a mineral resource business that is owned by a small cap junior with a market capitalisation of less than AUD $50M that has funding all the way through to mining and processing the high-grade iron pellets? Just remember that Cyclone Metals was an AUD $10M market cap company when it started the journey.
The transitioning from haematite to magnetite in the iron ore industry is happening and it is largely driven by the depleting of high-grade haematite iron ore. - Paul Berend
In this episode of Coffee with Samso we are talking to Paul Berend, Executive Director and CEO of Cyclone Metals Limited (ASX:CLE). Cyclone is a fascinating story of a junior aspiring to be a producer with a major, VALE, partnering with funding. A space in which most juniors would be struggling to find funding, CLE has a big brother taking care of all the bills.
The Business of Cyclone Metals Limited.
The steel-producing industry is transitioning to low emission and the process of Direct Reduction (DR) steel production is the solution to a global reduction in emission for the typically high carbon emission business. Direct Reduction steel production requires iron pellets that are very low in impurities and this is directly controlled by the quality of the source material.
As Paul Berend explains,
....not all magnetite deposits are suitable for Direct Reduction Pellets which is why the Iron Bear deposit is perfectly aligned to allow this process to be achieved.
Recent work by Cyclone Metals Limited has shown that the use of Direct Reduction on iron ore from Iron Bear can create iron pellets above 71% Fe content. According to Paul Berend, this is a very unique feature of the ore body. A feature that is not seen in many other iron ore resources and that includes those at Champion Iron.
Click Below to Watch the Coffee with Samso:
Paul proudly points out in the Coffee with Samso,
This is a great conversation with Paul Berend as he explains the story of Cyclone Metals clearly and in great detail.
Chapters:
00:00 Start.
00:08 Introduction.
04:10 Who is Paul Berend?
05:24 The Magnetite Story - Why Have We Not Embraced it Yet?
08:44 Transition of Value from Haematite to Magnetite.
09:41 Carbon Footprint of Magnetite.
10:07 Rise of Magnetite Projects?
10:33 Depletion of Brazilian High-Grade Iron Ores -The Reason Why VALE is in CLE.
10:51 Importance of Direct Reduction (DR) Steel Production.
11:57 Only Way to Make Direct Reduction Steel - Premium of DR Pellets.
13:05 DR Pellet Market Comparison.
13:48 How Do You Make Direct Reduction Pellets?
15:14 Reason Why DR Pellet Production is Rare.
15:47 Comparison of Low Impurity Iron Deposits.
16:30 DR Player requires an ABILITY To Reduce Impurities.
18:01 How much of the Current Resource will transition to Reserve Status?
19:08 Iron bear is a Low Stripping Ration deposit.
19:30 Metallurgy Will Increase the Economics of Iron Bear.
21:30 What is the main Business of Cyclone Metals? Is it DR Production?
22:26 Is Iron Bear DR Capabilities why Vale is interested?
23:18 Iron Bear can supply high-grade iron ore all the way to DR levels.
25:07 How Did the Agreement with Vale Evolve?
26:55 How important was the 10M?
28:30 Earning a Mandate to Operate Socially.
29:25 Importance of the First Nations Conversations.
32:12 How Important is the Relationship with First Nation Groups?
33:42 The Reasons why Vale could be the Reason for Success for Iron Bear.
36:24 Potentially One Technical Challenge for Iron Bear - Dry Tailings.
37:34 The Importance of Earning a Mandate To Operate
39:07 Twitter Shareholder Questions
39:27 Will the Trump Tariffs affect the Iron Bear Business?
40:48 The Vision of Iron Bear - It is a Bigger project than Champion Iron.
41:58 Reducing the Carbon Footprint of a Manufacturing Hub in Northern America.
43:25 How much is the resource expected to be built up to?
43:58 Iron Bear is a Premium Magnetite project.
45:15 What cost will the hydroelectric power cost us per kilowatt?
46:51 Green Energy Narration - Magnetite Naturally Reduces Carbon Emission.
49:48 Discussion on iron ore prices.
54:23 Why is CLE still at 50M?
55:21 Why is there a feeling of disbelief in the Cyclone story?
58:02 The misunderstanding of the Iron Ore industry.
01:00:54 Takeaway.
01:01:18 Conclusion.
PODCAST
About Paul Berend
Paul Berend brings over 25 years of leadership experience in the iron ore and steel industries, gained across blue-chip corporations and junior mining ventures. His corporate background includes senior roles such as GM Corporate Strategy at ArcelorMittal, GM Business Development at Rio Tinto Iron Ore and Director Australasia at Hatch.
Paul is a passionate mining entrepreneur and was a founder and historic CEO of Trans-Tasman Resources Ltd (a titano-magnetite project in New Zealand ASX: MKR) and has played a key role in a number of private early-stage exploration ventures.
In addition to his entrepreneurial work, Paul has a successful track record in turning around distressed producing mines and steel mills in difficult jurisdiction including Australia, PNG, Europe, GCC and Africa. He is a trusted advisor for Tier one natural resource companies, supporting operational, organisational and growth strategies. In this capacity, Paul’s previous employers include McKinsey& Company and Partners in Performance.
Paul has an MBA from HEC (Paris, France), a MSc and DEA (~PhD) in chemical process design and chemistry from ENSIC (Nancy, France), a bachelor’s in applied mathematics and algebra from Harvard University (Cambridge, USA) and is a Graduate of the Australian Institute of Company Directors. He speaks native and English and French as well as professional German.
About Cyclone Metals Limited
Cyclone Metals owns and operates the Iron Bear magnetite iron ore project, formerly known as the Block 103 Project.
The Iron Bear Project consists of ten licenses totalling 7,275 ha on 291 graticular Mineral Claims under the applicable Labrador and Newfoundland mining regulation, located near the Provincial border of Newfoundland and Labrador (NL) and Quebec (QC), approximately 30 km northwest of the town of Schefferville, QC and 1,200 km by air northeast of Montréal, QC.
The Iron Bear properties are located within 25 km of an open access heavy haul railway which is directly connected to the Sept Isles and Pointe Noire iron ore export ports. In addition, the Iron Bear has potential access to cheap renewable energy from the Menihek hydro-plant located 75km away. These two factors substantially improve the prospects for eventual economic extraction of the Iron Bear mineral resource.
Notably, large scale iron ore export operations currently operate in the Labrador Trough; including IOC (Rio Tinto), Champion Iron and Tata Steel; all sharing the same rail and port infrastructure.
Highlights:
World Class Iron Ore Project: Mineral resource of 16.6 billion tonnes containing 29.3% total Fe and 18.2% magnetic Fe, cut-off grade 12.5% magnetic Fe.
Low OPEX: Estimated OPEX of USD 35.6/t3 FOB Pointe Noire for blast furnace concentrate due to access to low-cost hydropower
Strategic Tier 1 Asset: Iron ore asset with flexible development scenarios and the potential to ramp up production to over 100 Mta
Mining Friendly Jurisdiction and Proximity to Infrastructure: Iron Bear located in Canada, less than 25km from an open access heavy haul railway with proximity to low cost to hydro-power
High Quality Product: Production of high quality magnetite concentrate grading 71,3% Fe and 1.1% SiO2 in industrial pilot plant
Fast Track Project Development: Underpinned by the supply of bulk samples of DR and BF concentrates to mill clients by Q2 2024
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