The Need for a New Security in Rare Metals New Production

Outlook for the strategic and critical rare metals for technology

Summary

A “strategic metal” can be defined, economically, as one that is necessary to or important in the start up, operation, or completion of a long term plan (i.e., a strategic plan) to mass produce or manufacture items, collectively or individually, which require large amounts of metal. For example the plan by a private business to construct an office building must consider the cost and availability of structural steel as a strategic necessity; this seems trivial at first glance, but it becomes very important when the strategic metals are or include even one rare “critical metal”, defined as one for which there is no substitute (in performance or economics) so that without it the project cannot be implemented or continued without guaranteeing the security of the supply of the particular specific metal.

For example, advanced jet engines that burn less fuel and are more efficient usually operate at higher temperatures than the ones they replace; such engines all require alloys that use the extremely rare metal rhenium and the very rare metal yttrium. If the engine cannot be produced or sold without meeting specifications that can only be assured by making some of its components from rhenium and yttrium alloys, then without insuring the security of supply of these two metals beforehand, the project may, in reality, be too risky to even start. Yet until now such considerations of insuring the security of supply have commonly been either overlooked or ignored.

This is because until the twenty-first century’s global explosion of demand for high technology goods. procurement officials at private companies assumed that the market forces of demand and price would always combine to make supplies of all metals available competitively. It was commonly believed that these forces applied equally to all metals including the rare ones, which, like gold, it was assumed, would and could always be available, given enough time to accumulate them, in any desired quantity if one was willing to meet the market price. Thus all metals were viewed as commodity metals subject to and reacting in the same way to market forces.

Thus the rarity of a metal was assumed, if any thought was given to its procurement as a special project, to be caused by a production rate limitation; some metal ores were harder to find, but, given enough time and money, it was assumed, any metal could be obtained. This assumption is wrong; it is based on a fundamental misunderstanding by business and government economists of geology and mining and refining engineering.

In order to educate ourselves and understand the fundamental error we need to ask:

1. How are metals produced, which is to say where do the metals we can use actually come from?
2. What quantities of new metals are produced each year, and can the production rates of any or all of them now be increased beyond 2008 levels, or can/will the production rates for some of them actually decrease?
3. How does the location of the production sites for any and all metals factor into their availability, if at all?

How are metals produced?

This is not a trivial question. In fact there are two and only two possible sources for the production of any metal.

First of all, and primarily, the metal can be mined from an accessible and large enough ore deposit of high enough grade (percentage of desired material in the whole) so that currently available technology can economically

1. Extract the ore from the substrate, such as rock or sand, in which it is contained;
2. Separate the ore from the lower (or no ) value materials in which it is embedded;
3. Separate and refine the natural chemical compound, which make up the “ores,” into individual metals, or individual metallic compounds;
4. Purify the metals or compounds to whatever degree of quality is desired;
5. Fabricate the metals into useful physical, metallurgical, or chemical forms; and
6. Manufacture the devices and products which are dependent on the metals for their strength, shape, or purpose.

If any one of these steps is not possible or uneconomical, then the metal will have no commercial use until such time as that step in the chain becomes economical.

Second, if a sufficient quantity of either the industrial scrap left over from the fabrication of the desired products or if the end products themselves have a high enough content of the desired metals, then the industrial process scrap or the worn out products may be inserted into the above enumerated processes at an appropriate place and then processed until the metal once again has been through step 5 above. At this point the metal is indistinguishable from the metal produced from ore and is said to have been “recycled.”

Logic applied to the above metric tells us that mining exploration is always the first step; this process is commonly known as exploration and is a meticulous operation characterized as much by luck and “experience” as by geological knowledge. Exploration is mostly the provenance of “junior” miners defined as those who mostly explore for valuable minerals in the hope that they will be able to find and characterize deposits the intrinsic value of which will lead to their sale to larger mining companies that will develop and mine the minerals, a very, very expensive and time-consuming process.

Junior mining companies frequently announce “discoveries” of desirable minerals and metals, and those discoveries most often are of small amounts of material, which the junior miner hopes will be the precursor of an accessible, mineable, large, high-grade ore body.

Institutional investors normally are very conservative with regard to committing to the large investments necessary to bring an ore discovery into final production, which we will define as the completion of step 3 above. This is usually as far as the “mine” goes. The main reasons for such reticence are the considerable sums necessary prior to any evaluation of the deposit just to see if the ore body is large enough and rich enough, so that if it is accessible and the chemical processes exist or can be developed to recover the desired metals or minerals, the mine’s final product can be sold at a profit at the end of step 3 above. The volatility of commodity metal prices over the last century and a half have made mining finance into a high risk game that is difficult to hedge against loss.

However, a change has now occurred in the world of metals that is only now being perceived by institutional investors. The recent recession caused the commodity metals, which I call the structural metals, to drop precipitously in demand and price after nearly a decade of record increases in their production. Rare metals prices mimicked structural metals prices during most of the recession, but now the rare metals are described as “leading the recovery.” Actually this is not entirely correct. What is happening is that the rare metals are in fact qualitatively different in their uses from the structural metals; they are the “technology metals,” and the market for them is now standing on its own.

The main issue surrounding the supply of the rare metals that are the new strategic and critical metals of the age of technology is that both their availability in nature and their rates of production and recycling are limited.

Institutional investors have until now confused the economics of widely available structural metals with those of the technology metals. An increased demand for structural metals can and will cause an increase in their supply. Also price can and will drive supplies of structural metals to the highest bidder. These simple rules do not apply to the procurement of the technology metals, because the most important factor for them is their availability in large enough and rich enough ore bodies (or, as we will discuss, as byproducts of structural metals) to be produced economically at all. Even where such ore bodies occur, the rate of production (of any metal) is determined by its accessibility to logistics, water, and energy. Mines of any type also take a very long time to be brought into production.

The most common error made by institutional investors in assessing the net present value of a rare metal ore body is the misconception that the relative amount of a metal in the earth’s crust or in the ocean is a measure of the availability and accessibility of that metal for use. The distribution of a metal in the earth’s crust or ocean has absolutely nothing to do with its availability or accessibility. Both of these issues are measured only by the availability and accessibility of large high grade deposits of the ores of these metals in regions of the earth where the infrastructure of logistics, electricity, water, and labor are economically available, or when any or all of the elements of the infrastructure have to be created in order to mine the metal, and the cost of such infrastructure creation when amortized and placed as a liability of the mine still result in a selling price for the metal that is competitive. Of course when a critical metal for the military or for health is involved, the calculation of price may become secondary to availability.

What quantities of new metals are produced each year, and can the production rates of any or all of them be increased, or will the production rates for some of them actually decrease?

There may be some quantitative errors in the list above, but there are no qualitative errors. The production ratios of the listed metals are accurate. As an example of an extreme, the production of raw steel in 2008 was equal to one million pounds of raw steel for each one pound of zirconium produced! For each nine hundred thousand pounds of aluminum produced in 2008, there was produced less than 15 ounces of the metal critical for the manufacturing of efficient and high temperature operation jet and rocket engines, rhenium.

The above list details the global production for 2008 of the most important metals of all types for our civilization. The totals represent the production rate achieved after a decade of the most available finance ever proffered to the global mining industry. Some of the resources and reserves of even the most common metals are now nearing the exhaustion of high grade (high percentage content of the desired metal) and new technologies for recovering them from lower grades must now be developed. Such recovery technology is time consuming, expensive, and frequently leads to dead-ends. Such “improved’ technological development therefore cannot be predicted to simply just happen even over a long time frame. Spaceship earth has finite recoverable resources, and so the questions become can we significantly increase the global production of new metal, or are increases from now on going to be only marginal, if at all, and when, not if, will new metal production rates decline?

Just a note here about recycling: Our civilization has wasted many rare metals by either not simply recovering them when it would have been most economical and most practical or by using them in dissipative ways thus creating “grades’ of scrap too poor in rare metals content to be economically or even practically recoverable with current technology.

This waste cannot continue if there is to be widespread use of green technologies for producing and using energy without the burning of fossil fuels. There is no green path to the future without mining and using rare metals.

How does the location of the production sites for any and all metals factor into their availability, if at all?

For the US economy, currently the world’s largest economy, and the location, according to the National Mining Association, of the most diversified natural resource base of any country in the world, the reliance upon imports for 100% of strategic and critical natural resources, as calculated by the United States Geological Service, had grown by the end of 2008 to more than 25 metals. This figure has tripled in the first decade of the twenty-first century, but the incredible part of this growing reliance by the USA on imported metals is that in almost every case, for each metal, the USA has accessible and available domestic resources of the metals upon which it has become resource reliant. Unlike any other industrialized or industrializing country on earth the USA has stopped creating wealth producing its own strategic and critical resources even those required critically by its own military and non-fossil fuel energy producing and using industries!

China, Japan, Korea, and the European Union all have strategic stockpile programs in place to inventory a growing list of strategic and critical metals to safe guard their security of supply for both their civilian and military industries. The EU, for example, has identified 40 metals as being qualified to be considered strategic and critical for the economic preservation of its industrial base.

The USA has not amended its Defense Strategic Stockpile Act since 1979, and therefore the USA does not even consider any of the technology metals to be critical, much less strategic.

It is only a matter of time before a general technology metals supply crisis erupts in the USA and the time during which the USA can become a participant in the global race to produce and stockpile strategic and critical metals both physically and through ownership and operation of their sources is running out.

Unless American bankers recognize that availability and production rate are just as important market drivers as demand and price the US will soon fall behind permanently in its ability to support high technology industries and any green revolution will be dependent on imported natural resources and technologies.

A great deal has been written in the last month about China reducing its export allocation of the rare earths, of which it today is the world’s sole supplier. The global investment community has responded to China’s determination to be self sufficient in supplying and developing its domestic high and green technology base by running up the share prices of the few rare earth mines in development outside of China

I call on institutional investors to underwrite the development of natural resources by assigning a risk of future production factor to selected mining opportunities and securitizing off-take agreements negotiated with the best of the mines to be developed, so that such securities may be traded and priced to develop a basis for planning by industry and government for security of supply of the rare metals critical for the future of green technology.

I offer to assemble a committee of mining experts and economists to create a new metric for assigning risk to such securities, and to start the process with a study of the world’s rare earth mining opportunities. Are there any interested parties out there?

There is no way to set the USA “On The Green Road” without secure access to the raw materials critical for green technologies to be manufactured in such quantities so as to be pervasive.

Comments

[don2m:]

Mr. Lifton, you could have used your article as a thesis for your PhD............or did you? It is so comprehensive that there is nothing left to research. Well done, Sir. I give you A+++ and you are exempt from the finals !

Sep 23 09:14 PM

[TinyTim:]

"the USA has accessible and available domestic resources of the metals upon which it has become resource reliant."

This is true because economics demands we "high-grade" other sources first. If our supply is disturbed by China's political actions, for example, then these domestic resources will be reexamined.

I agree that the Defense Strategic Stockpile Act needs to be updated. In the early '80's, when the concept of strategic metals was last a big concern in investment circles, many of the items on the current list were little used outside of research labs.

Lastly, where does mercury fall on these lists? Apparently, it's not a supply concern.

Sep 24 12:05 AM

[fran:]

YOUR POINTS ARE VALID FOR ANY PATH TO ECONOMIC GROWTH[GREEN OR WHATEVER].

OUR DAYS OF GROWTH BY SHEER SIZE/VOLUME AND GOOD LUCK HAVE ENDED. WE MUST NOW THINK OUR WAY FORWARD TO BE ECONOMICALLY STRONG AND COMPETETIVE. AND MOST IMPORTANT, ACHIEVE HIGH DEGREES OF SUSTAINABILITY, INTELLIGENCE AND FORWARD PLANNING.

THIS HAS PLACED US INTO NOVEL, UNCHARTERED DIMENSIONS.

Sep 24 09:25 AM

[Skaiste:]

Tell me if I'm wrong, but where is the logic behind recent REE mining stocks run up? Rhenium cost around $193 per troy ounce. Many REE are rarer than platinum, but are much cheaper in price. If platinum or other PGM mining is barely profitable at these price levels, how REE company is expecting to make profits? No wonder many where on the brink of collapse, until Chinese stepped up.

Sep 24 11:07 AM

[Jack Lifton:]

No useful REE is rarer than platinum; the world production of platinum in 2008 was around 200 metric tons. You are however correct in questioning why REEs are so cheap. I have come to believe that unless the prices of REEs rise sharply there will be no incentive at all for institutional investors, because at current costs only one or two (Canadian) REE mining ventures could ever produce a return on the very large investment necessary today to bring a mine into production.

I believe that this is the simple reason-although, perhaps, not the only one- that CNMC walked away from Lynas today. I also believe it is the main reason that Goldman-Sachs seems to have left the rare earth space after making some serious investments.

Vertical integration by REE producers is now a minimum necessary, but maybe not sufficient, condition for success by a rare earth producer.Mine to market or mine to magnet adds critical value, and if the REE prices increase it will make the vertically integrated producers sure winners.


On Sep 24 11:07 AM Skaiste wrote:

> Tell me if I'm wrong, but where is the logic behind recent REE mining
> stocks run up? Rhenium cost around $193 per troy ounce. Many REE
> are rarer than platinum, but are much cheaper in price. If platinum
> or other PGM mining is barely profitable at these price levels, how
> REE company is expecting to make profits? No wonder many where on
> the brink of collapse, until Chinese stepped up.

Sep 24 03:13 PM

[Mayascribe:]

Jack: A few questions--

i) What do you think the chances of Canada nationalizing Great Western and Avalon, for national security reasons?

ii) If you were to put 20K into Great Western and Avalon, what percentage would you put into each stock.

iii) Would put any of the hypothetical money into Lynas?

iiii) Is there any other REE company that you would consider investing in?

Thanks, Jack. You know what I'm up to..."vulturing" around.

Great, great article.

Sep 24 03:35 PM

[Jack Lifton:]

Mayascribe,

As you know I am not a licensed investment advisor. For myself I would invest in both Canadian companies (I do not do that, and I never have, because I try to keep neutral). I would weight my investments to reflect where they are. For Avalon to go from $3.50 to $5 is a rise of 47%; for GWMG to go from $0.30 to $1 is a rise of 267%. I believe that both will happen.

If I held Lynas I would sell it now and invest in the Canadian companies.

That's what I would do hypothetically, of course.


On Sep 24 03:35 PM Mayascribe wrote:

> Jack: A few questions--
>
> i) What do you think the chances of Canada nationalizing Great Western
> and Avalon, for national security reasons?
>
> ii) If you were to put 20K into Great Western and Avalon, what percentage
> would you put into each stock.
>
> iii) Would put any of the hypothetical money into Lynas?
>
> iiii) Is there any other REE company that you would consider investing
> in?
>
> Thanks, Jack. You know what I'm up to..."vulturing" around.
>
> Great, great article.

Sep 24 03:47 PM

[jimp:]

Jack,
What's your reason for not liking Lynas Corp? China is now out of the equation. Lynas has always planned to be a vertically integrated REE producer.

Which Canadian REE miner is closer to establishing vertical rare earth integration? Which canadian REE miner has the largest and best quality portfolio?

Thank you for your many great insights.

Sep 24 04:38 PM

[EconoMarcus:]

Jack, I find it interesting that you estimate that Lynas would not be able to produce and *make a profit* (in contrast to GW and Avalon). May I ask: What makes Lynas potential production more expensive? Geology? Infrastructure? Something else?
Also: How would you classify Molycorp and its production costs or potential profitability once they resume production?

Sep 24 07:14 PM

[ddot:]

Jack
Lynas is an advanced project and even after this last setback it will be one of the first producers of REE outside of China. It is one of the richest REE mines in the world and has a team of people that have been working behind the scenes for a few years now and obviously now what they are doing!!!!!!!!!
Your comment about selling Lynas to buy North American stocks (who have been on the scene for five minutes) is biased and shows that you are obviously receiving remuneration of sorts from these companies and for me you have lost your credability

Sep 26 12:50 AM

[Jack Lifton:]

ddot,

I have received no remuneration wahtsoever from any Canadain mining company, nor do I, nor have I ever owned a share in any mining company upon which I comment..

Thor Lake, now to be officially known as the Nechalacho REE Deposit was first mapped 30 years ago, but the development of Chinese rare earth mining made it uneconomical to develop until now. Additionally the importance of heavy rare earths, only now recognized as critical metals for high technology, has made deposits such as Nechalacho and Great Westerns' Benjamin and Douglas Rivers deposits in Saskatchewan very important.

Also I think that both Thor Lake and certainly Mountain Pass are larger net deposits than Lynas Mt Weld district deposits. The problem with the high grades of Lynas is that they are predominantly of the light rare earths.

If you want to see a truly high grade rare earth ore look at Steenkampskraal, a former AngloAmerican operation in the Republic of South Africa, now to be re-opened by Great Western. It has a significant amount of 17% grade ore , which is exceptionally rich in the heavy rare earths, and although this ore body is relatively small its grade and previous development will allow GWMG to bring it into production within 2 years. This will allow GWMG to vertically integrate so that it mines, refines, and produces metals and magnet and battery alloys within its own operations with its own materials.

Lynas has already spent several hundred million dollars on development; it now needs north of 500 million more to bring it into (full?) production. This will take 3-5 years. This means that a debt of between 2/3 of and 1 billion dollars would have to be serviced from no revenues until 2012-2014. What private investor will accept a ROI that does not begin for 5 years and even then might be less than bank rates? If Lynas share price were to be used as an index of its "value" or "price" then this means that CNMC would have had to offer as much as i billion dollars for the company. if the American system of valuation is used this would mean that Lynas would be worth the total value of the metals in the ground, which would be several billion dollars. Such sums can never be repaid unless rare earth prices soar. Institutional investors no longer are making such bets. I believe that CNMC withdrew because the bank of China refused to finance the deal at the new price not becasue of Australian government opposition.

By contrast even at today's prices GWMG could deliver $500,000,000 of rare earth "oxides" from Steenkampskraal in the next 7 years. The investment for re-opening the mine and building a concentration and separation plant and a metals production by molten salt electrolysis plant could be less than 150,000,000. Payback could begin in 3 years, because the production of magnet and battery alloy could bring the value of the Steenkampskraal output to more than 750,000,000 giving GWMG suffcient margin to repay the debt with a high rate of return.

Avalon is in a very much better positon than Lynas also. In the short term it may not beat GWMG to market, but Avalon has a huge ore body and will be a producer of rare earths for generations.


On Sep 26 12:50 AM ddot wrote:

> Jack
> Lynas is an advanced project and even after this last setback it
> will be one of the first producers of REE outside of China. It is
> one of the richest REE mines in the world and has a team of people
> that have been working behind the scenes for a few years now and
> obviously now what they are doing!!!!!!!!!
> Your comment about selling Lynas to buy North American stocks (who
> have been on the scene for five minutes) is biased and shows that
> you are obviously receiving remuneration of sorts from these companies
> and for me you have lost your credability

Sep 26 08:33 AM

[User 283977:]

Maya - Did you get my email?

Sep 26 10:35 AM

[User 283977:]

You are a treasure trove of information Jack. Thank you.

Sep 26 10:47 AM

[Mayascribe:]

Jack: I made the plunge both last week and more yesterday into (GWNGF). Some concerns, though:

i) Great Western has a market cap just north of $40,000,000, with a little over 100MM outstanding shares. How much more money do you think they will have to raise as they near production mode three years from now? I'm worried about one whopper of a dilution.

ii) I doubt GWMG will have a reverse split because of the few outstanding shares, but what do you think is the chance of that occuring? So that they can get up-listed from the pink sheets as did ENER1 did in '08.

iii) Since the recent daily traded volume of GWMG has been rising wildly, do you think that they will let the debate roar on about how China controls 97% of REE mines, and how vital REEs are to the free world? To let the stock rise to a buck or two before implementing a secondary offering?

iiii) What form in the US and Canada will GWMG have to file with the SEC and Canada's SEC(?) before having a secondary offering?

To all who read this, who are interested in, or already own shares of Great Western Mineral Group, I suggest you sign up to their email list. I'm not sure about this, but I believe by law they have to make it public that they are about to have a secondary. I got severely pants this week because I did not pay attention to an email from ATP Oil and Gas (ATPG) -- that they were going to do a huge offering. Us day traders or short term holders of stocks can trade our way right around events like this, as well as (HERO)'s offering earlier this week, if we pay attention. The learning process...

As always, Jack, thanks!

Sep 26 04:07 PM

[engstudent:]

Good article, Jack. With Goldman and CNMC backing off, the danger of a shortfall appears that much more likely. How's progress with 'On the Green Road'?

I ran some figures on the potential use of rare earths in offshore wind:

seekingalpha.com/insta...

I'd be interested to know if the figures match with what you had in mind or any projections you may have seen.

Sep 27 02:57 PM

[Wildebeest:]

The main two things that at this stage require a leap of faith are:

1. that the significant portion of Lynas' resource is inferred. Therefore an investor is making a bet that subsequent drilling will return results that will allow the resource to be re-classified and economically mineable.

2. that recovery rates, particularly of the trace rare earth components, are high.

#1 is the case for all miners at this stage of development. To assess #2 you need to have a handle on processing methods for rare earth containing ores.

wildebeests.wordpress..../


On Sep 26 12:50 AM ddot wrote:

> Jack
> Lynas is an advanced project and even after this last setback it
> will be one of the first producers of REE outside of China. It is
> one of the richest REE mines in the world and has a team of people
> that have been working behind the scenes for a few years now and
> obviously now what they are doing!!!!!!!!!
> Your comment about selling Lynas to buy North American stocks (who
> have been on the scene for five minutes) is biased and shows that
> you are obviously receiving remuneration of sorts from these companies
> and for me you have lost your credability

Sep 27 05:54 PM

[Mayascribe:]

Jack: Great Western Minerals had a $10M warrant offering today.

I got this info through SA contributor HardToLove, yet there is nothing on Yahoo! or GWM's corporate website. Curious.

Oct 15 11:18 AM

[User 283977:]

GWM is down today… Here is a link to that warrant financing that HTL found. I find the pricing mentioned in the last paragraph very interesting.

(October 15, 2009) Great Western Minerals Group Announces $10 Million Special Warrant Financing

(NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES)

Great Western Minerals Group Ltd. GWMGF) is pleased to announce that it has entered into an engagement letter ("Engagement Letter") with Pope & Company Ltd. (the "Agent"), to complete an offering of Special Warrants by way of private placement. The Agent has been engaged on a best efforts, agency basis to raise gross proceeds of up to $10 million, at an issue price of Cdn.$0.31 per Special Warrant ("Special Warrants").

Each whole Warrant will entitle its holder to purchase one additional Common Share for $0.75 and will expire 60 months after the date of the closing of the Offering, subject to acceleration of the exercise period in certain circumstances. If following the closing of the Offering, the Company's daily volume weighted average share price is $1.00 or more per share for 10 consecutive trading days on the TSX-V, or an equivalent stock exchange (the "Accelerating Event"), the exercise period of the Warrants will be reduced to 60 days post the Accelerating Event and if not exercised within such period the Warrants shall be deemed expired.

www.benzinga.com/press...

Oct 15 12:04 PM

[Mayascribe:]

User: Thanks, buddy! "Accelerating Events" I hold dear!

You're right, that last sentence gives me Linus' blanket. Still, odd that this offering has not yet been posted on the corporate website, at least since last I checked.

Oct 15 12:23 PM

[User 283977:]

What do you think is the reason for the limitation on distribution to the US?

Oct 15 12:34 PM

[optionsgirl:]

US investors can't always participate in foreign stock offerings, even when there is an ADR. There are legal reasons and I don't know why such prohibitions exist, but the do. However, just like the SEC, I think SEDAR requires a filing for this kind of event. So, you can go to the SEDAR website and search there. In fact, the Great Western website provides a SEDAR link in the investor section.


On Oct 15 12:34 PM User 283977 wrote:

> What do you think is the reason for the limitation on distribution
> to the US?

Oct 15 12:53 PM

[Mayascribe:]

Just off the phone with my broker. The Great Western Minerals $10M warrant offering can only be purchased by Canadian citizens. The SEC requires that all foreign offerings must be registered with the SEC in order for US citizens to be able to acquire those warrants. My broker stated that it costs about $250,000 in attorney fees and filing fees to allow US citizens to participate. GWM did not want to go through the expense and hassle.

So if you're a Canadian, this looks like a good deal. I'm holding on to my shares and will wait for the, as GWMGF put it, "Accelerating Event."

Oct 15 02:21 PM

[optionsgirl:]

It tells you they think .31 is a fair valuation for now. Right?


On Oct 15 02:21 PM Mayascribe wrote:

> Just off the phone with my broker. The Great Western Minerals $10M
> warrant offering can only be purchased by Canadian citizens. The
> SEC requires that all foreign offerings must be registered with the
> SEC in order for US citizens to be able to acquire those warrants.
> My broker stated that it costs about $250,000 in attorney fees and
> filing fees to allow US citizens to participate. GWM did not want
> to go through the expense and hassle.
>
> So if you're a Canadian, this looks like a good deal. I'm holding
> on to my shares and will wait for the, as GWMGF put it, "Accelerating
> Event."

Oct 15 02:28 PM

[John Petersen:]

Typically private placement investors are allowed to buy at a 10% to 20% discount to the market because of timing, liquidity and other risks. Paying $0.31 today to get a share of stock 'sometime early next month' together with a half warrant exercisable at $0.75 tells me that the open market is over-reacting to the private placement.

Oct 15 02:36 PM

[optionsgirl:]

Thank you, Mr. Petersen.

Oct 15 02:39 PM

[H. T. Love:]

I just posted on TBP, the releases are not supposed to go to newswire services are be disseminated in the U.S.

Maybe that explains it.

Source Dowjones Newswire Service. LoL!

HardToLove


On Oct 15 11:18 AM Mayascribe wrote:

> Jack: Great Western Minerals had a $10M warrant offering today.<br/>
>
> I got this info through SA contributor HardToLove, yet there is nothing
> on Yahoo! or GWM's corporate website. Curious.

Oct 15 02:50 PM

[H. T. Love:]

*not* disseminated!


On Oct 15 02:50 PM H. T. Love wrote:

> I just posted on TBP, the releases are not supposed to go to newswire
> services are be disseminated in the U.S.
>
> Maybe that explains it.
>
> Source Dowjones Newswire Service. LoL!
>
> HardToLove

Oct 15 02:51 PM

[Mayascribe:]

OG: I guess so, that's 31 cents Canadian. The $ is going to be used for an African mine and expenses. I was worried about them only having $7M in cash on hand. This offering spruces up the balance sheet. It's a good thing. I still stand by the thought GWM will not have a major dillution until the stock is much higher, as Jaguar did about a month ago. Could be a one-fer, or a reverse split to get up-listed then. Expect the stock to stay around the 28/29/30/31 cent level until the offering is closed on November 5th. Meanwhile, those damn quant trading platforms are going to do there thing.

John; Thanks for your legal knowledge. Much better than illegal knowledge!

Oct 15 03:07 PM

[Mayascribe:]

Jack: You've been one mighty busy man lately. Below is a link to Jim Kingsdale's website and within comes an article written by Jim Jubak. I used to be a huge fan of him, but lately he seems to have lost some of his luster.

Jubak writes about REE's and how all the REE stocks are overbought. I disagree.

www.energyinvestmentst...

When you find some time, would you please comment on this article?

Sorry to see that Jim Kingsdale has cancer and has begun to shut down his website. I liked his writings.

Oct 22 03:40 PM

[Jack Lifton:]

Mayascribe,

Please look at my article, "The Rare Earth Crisis of 2009," accessible from jackliftonreport.com

There are so many factual errors in the articles above and such poor analysis, based upon those errors, that I do not wish to comment on them.

I will comment on the rare earths' space in my report on the conference on "Risk Management of Strategic and Critical Metals," which I co-chaired and which just concluded last Thursday evening.

There is a great deal of upside in the rare earths' market. There will be a shaking out in the next year.

Thanks

Jack


On Oct 22 03:40 PM Mayascribe wrote:

> Jack: You've been one mighty busy man lately. Below is a link to
> Jim Kingsdale's website and within comes an article written by Jim
> Jubak. I used to be a huge fan of him, but lately he seems to have
> lost some of his luster.
>
> Jubak writes about REE's and how all the REE stocks are overbought.
> I disagree.
>
> www.energyinvestmentst...
>
>
> When you find some time, would you please comment on this article?
>
>
> Sorry to see that Jim Kingsdale has cancer and has begun to shut
> down his website. I liked his writings.

Oct 24 10:20 AM

[Mayascribe:]

Glad you're back, Jack! That was my take. A bunch of uninformed nonsense.

Thanks! Signed up.

Oct 24 10:26 AM

[Mayascribe:]

Jack: Please excuse my innocence, but your REE report has a wow-factor higher than a 10.0 earthquake.

P.S. The email signup link did not work (for me), but after doing the copy, cut and paste excersise, it did.

A MILLION THANKS!

Oct 24 11:22 AM

[jimp:]

Jack,
Very informative article. Has your thoughts changed towards Lynas Corp now that the chinese are out?

Which miner has the largest portfolio of heavy rare earths, Avalon or Great Western?

Thanks again

Oct 24 04:35 PM

[tripleblack:]

Excellent data here, and I really appreciate the information and opinions of Mr. Lifton, which tallies neatly with research I have been doing for my own benefit for the last 2 months. I want to add my small support to his positions, plans and words. I have rarely encountered an article where I so wholeheartedly agreed with its content.

Oct 24 09:03 PM