Saturday, April 26, 2014

Rare Earth – the Evolving Drama (Part II)


Rare Earth – the Evolving Drama (Part II)

Note: this is re-post of my 2009 Blog - some links maybe outdated, but I provide  2011 updates too
Aside Chinese companies there are very few private or publicly traded REE companies. In this final part of my narration, I will look into them based on the size of projects.
Outside China there are four major REE tenements in the world that are being developed. This picture from Greenland Minerals and Energy Ltd latest corporate presentation gives a general understanding of potential:
 (Update from 2011: you may go to this page to look at the project

As I mentioned in the previous Blog post Greenland Minerals and Energy Ltd is emerging as one of the most attractive players in the REE market. A lot of materials are on the corporate Web-site, as well as in these references:
·                  GREENLAND MINERALS AND ENERGY LIMITED (GGG) Page on ASX – complete information on the company
·                  Kvanefjeld Rare Earths Project Takes a Step Closer to Reality by Metal Miner that discusses plans for AIM listing by Greenland Minerals and Energy Ltd
·                  Greenland Minerals and Energy: UraniumLetter places $1.20 share price target by Proactive Investors
 Another major resource of REE is the open-pit mine at Mountain Pass, California, which is developed by  Colorado-based Molycorp Minerals. Completed description of the tenement is provided here.  As I cited in my previous post, you may read the report prepared by the Molycorp Minerlas, that was prepared for Congressional Leaders  in January 2009. A very good discussion on the American REE deposits is submitted by Jack Lifton  in Seeking Alfa – with good links to some video materials. (Also read Jack Lifton’s The Rare Earth Story). Mountain Pass has a long history, and in the XXIst century it seems that it is started resurrection – when after 15-years of regulatory reviews in 2004 Molycorp started its 30-years mining plan.  It is supposed that by 2012 mining will resume at Mountain Pass at the rate of 1,000 tons of ore a day.

The Thor Lake Rare Metals Project is developed by AVALON RARE METALS INC. and is located approximately 100 km southeast of the City of Yellowknife, Canada. Watch this interview with Avalon CEO and at the 2011 update on the development of the project.

Mount Weld REE deposit is being developed since 2001 by  Lynas Corporation Limited – an Australian miner that is listed in America (Pink Sheets) and Australia (ASX). The company has developed a remarkable RED (Rare earths direct) Integrated Supply Chain that is well described it its 2009 Annual report. Detailed description of the latest developments in Mount Weld Project are provided in Lynas Presentation at the 5th International Rare Earths Conference . This year witnessed a number of significant events for Lynas: initially everything looked like China Non-Ferrous Mining was going to buy 52% of company’s equity but in September the Australian regulators blocked the deal. This lead to market fund-raising effort which ended in November with A$450 million. 
LYNAS CORPORATION LIMITED (LYC) ASX page with all relevant information
Arafura Resources (Australia) operates a Nolan Rare Earths project in the Northern Territory of Australia and at this time is also in the process ofgetting investments from Chinese company. The company describes its projects in this presentationAll information can be found also in ASX page2011 Update: Arafura Resources – On Track to Supply Rare Earths To Users Worldwide in 2013

Great Western Minerals Group Ltd. is a Canadian-based company with six rare earth exploration and development properties in North America with an option to participate in the development of a sizable property in South Africa. More information on the company is on their Web-site and here.

From investor point of view, REE provide an excellent opportunity.
Just look at this stunning evolution of prices:

The global economic slowdown (starting from the end of 2008) resulted in inventory destocking in many industries – trying to preserve cash many industries used their existing inventories. This resulted in significant plunge of raw materials prices – that is surely true for REE. However, with recent developments in China, many analysts speak about emerging deficiencies of REE on the market. That would certainly bring the prices to the old levels.

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