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Ben Kramer-Miller  

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  • The Rare Earth Junior Miner Market Is Bifurcating: Stick With The Winners [View article]
    You're wrong, Dy is used both to increase the magnet's temperature range and to increase its magnetic coercivity. None of the three projects you mention will be producing enough Dy to supply the ex-China market any time soon, and I doubt the last two will get into production within 10 years, if at all. Mt. Weld will be shut down soon if prices stay where they are.
    Aug 4, 2015. 08:17 PM | Likes Like |Link to Comment
  • Syrah's Balama Project Is Growing (And So Is Its Nose) [View article]
    I would not buy Syrah, period. The issue is strategic and sales, not one of valuation. So unless shares trade at cash and management resigns leaving somebody competent in charge I wouldn't touch it. Even then what competent graphite management team wants control over 300ktpa of graphite when no other mine in the world is producing more than a tenth of this?
    Flinders looks intriguing at cash but the market is still lousy, so shares might not rise near-term. Focus is a joke run by promoters who are starting to jump ship. This thing will be at a nickel in a year or two.
    Aug 4, 2015. 05:53 PM | Likes Like |Link to Comment
  • The Rare Earth Junior Miner Market Is Bifurcating: Stick With The Winners [View article]
    This article completely misses the point and the author clearly doesn't get that the issue with Dy isn't price, but supply security, and this is the motivation for finding substitutes. The price could be $200 or $2000 it doesn't matter much to the cost of production at the miniscule quantities used in NdFeB magnets. If somebody in the West starts producing a steady supply of Dy it will be consumed in magnets even if the price is $2,000...as long as the supply is stable, as this would eliminate the motivation to find a substitute.
    Consider that the largest Dy consumers are only consuming a few tonnes a year--maybe 25: at $200000/tonne that's only $5 million per year and another $5 million if the price doubles. These figures are substantially smaller for most companies. How much is currently being spent on research to eliminate Dy? Certainly more than is economically justified in the cost saviings of eliminating Dy. Economically there's no justification for spending a great deal of effort on finding substitutes unless you are operating under the assumption that this stuff won't be available in the quantities you need at any price.
    Aug 4, 2015. 05:28 PM | 1 Like Like |Link to Comment
  • The Rare Earth Junior Miner Market Is Bifurcating: Stick With The Winners [View article]
    One point and one question regarding Dy substitution. First, we haven't seen a way to eliminate Dy completely from Nd magnets. Since China's control is 100% success is only in a company's ability to completely remove Dy. If they can get rid of 99% they are still dependent on China.
    Now the question. We see Dy/Tb substitution and presumably it is successful if you can reduce the amount of these metals i the magnet yet retain the coercivity level. What would happen to this development if we were allowed to add back the Dy/Tb that we took out? Would the magnet be even stronger and heat resistant? The point is that substitution might be a practical near-term solution, but that doesn't negate Dy/Tb's qualities and thereby its desirability, and a long-term supply of Dy/Tb would be welcomed even by those working to eliminate it from their product lines.
    Aug 4, 2015. 03:16 PM | 2 Likes Like |Link to Comment
  • Investing In Graphite Part 1: Supply/Demand Overview [View article]
    The problem with Zenyatta is that they are assuming the graphite price to be the value of the end products it will be producing, hence the $7,500/t figure when everybody else is <$2000/t. They will say that this is because their graphite is hydrothermal. Well great, Zenyatta will sell 30,000 tonnes of the stuff per eyar even thuogh the global market is only 10,000/year, meaning that they can't possibly know what quadrupling the market will do to the value of the product. The stuff's value will obviously be a function fo the cost of creating the value-add products that Zen bases its pricing on. We don't know this cost. ZEN has done some bench-scale work demonstrating that its graphite can be spheronized and purified, but we have no idea hwo expensive it iwll be to upscale these processes.
    Finally, keep in mind just how small the graphite market is per year. Only 1.1 million tonnes, and much of this is low-value amorphous stuff. So we're talking well under $1 billion per yera. Yet Zenyatta proposes a $400 million capex project?! I doubt we'll see that.

    So I would avoid the stock and consider shorting it upon carrying out additional research.
    Stick to small projects with flake graphite (larger market and therefore easier to evaluate from an investment standpoint) and make sure project capex is extremely low--no more than $15-$25 million--unless there is an unusual situation.
    Aug 4, 2015. 02:35 PM | 2 Likes Like |Link to Comment
  • Investing In Graphite Part 1: Supply/Demand Overview [View article]
    Great Lakes Graphite is moving closer to production of micronized graphite.

    http://bit.ly/1K1b5EU

    Micronization is a key step in manufacturing spherical graphite for Li-batteries
    Aug 3, 2015. 08:16 PM | Likes Like |Link to Comment
  • Tesla Has A Graphite Problem [View article]
    Great Lakes Graphite is moving closer to production of micronized graphite.

    http://bit.ly/1K1b5EU

    Micronization is a key step in manufacturing spherical graphite for Li-batteries.
    Aug 3, 2015. 08:15 PM | 1 Like Like |Link to Comment
  • What The Rare Earth Industry Faces [View article]
    I suspect neither of those companies can make money in the current environment. Lynas has only had 1 profitable quarter due to operational issues, falling REE prices, and over-exposure to La/Ce, and that was before the price decline, meaning that they probably can't make money. TAsman put out a PFS with prices 100%+ higher than today's, and unless they can get their capex and separation costs down this project doesn't work at today's prices.
    Tasman's chart is making a double bottom, though, and they do have plenty of Nd, Dy, Tb, Y, and Lu.
    Aug 3, 2015. 01:27 PM | 3 Likes Like |Link to Comment
  • What The Rare Earth Industry Faces [View article]
    The promotion of the industry and its criticality are, for the most part, mutually exclusive, and you're forgetting that promotion occurs on a company-by-company basis while the promotional nature of the REE industry during the peak simply reflects snowballing investor interest. Despite the massive promotion that went on the tremendous rise in REE stocks did reflect a rise in REE prices from 2009-11 that with hindsight justifies 10-20, even 100-fold increases in share price (assuming, of course, that these companies could actually develop the businesses they claimed to be able to). Of course the 90-98% price declines we've seen of late would justify a reversal. While there's still promotion out there now is probably a good time for investors to buy the right REE stocks. Note that when I say "right" that I'm still convinced that we will see 95% of the companies claiming to be REE companies fail in this department (despite continued promotions).
    Aug 3, 2015. 12:55 PM | Likes Like |Link to Comment
  • What The Rare Earth Industry Faces [View article]
    The Chinese have the whole supply chain and know-how. We barely have a few deposits and knowledge that rivals the Chinese is scarce. NOt only that but the Chinese can subsidize the industry without a second thought. Suppose they subsidize a $5/kg. TREO loss (~20%). In a 150kt/yr. market thats just $750 million. Throw in $250 million for contingencies, bribes, slush funds...whatever and you still get $1 billion--peanuts considering how critical REEs are to the supply of such a wide variety of products. This capacity took 2 generations to develop and the West can't possibly replicate it in a short period of time. It can, will, and has to be done though, and it could take a supply shock to spawn this development.
    Aug 3, 2015. 04:59 AM | Likes Like |Link to Comment
  • The Rare Earth Junior Miner Market Is Bifurcating: Stick With The Winners [View article]
    Also, while the REE space looks like it is in worse shape than graphite the bear market in REEs is more mature. People still believe in the most hyped up graphite stories but they almost unequivocally don't in REEs--everyone I speak to says that every project is uneconomic right now.
    So things look worse but this is also extremely bullish from a contrarian point of view. The West needs REEs--especially the critical ones--which means the industry will exist in some form. However it will be difficult to know what it will look like given the wide range of metals, their respective usages and the rapid changes taking place there, and the fact that there is no smooth supply chain from mine-magnet (as Ucore and MOlycorp have called it).
    Aug 1, 2015. 08:20 PM | Likes Like |Link to Comment
  • The Rare Earth Junior Miner Market Is Bifurcating: Stick With The Winners [View article]
    Businesses need to generate cash, plain and simple, and companies like Dacha don't do this and so they lose investor interest, the shares trade at a discount to NAV and some activist sees the opportunity to bridge the gap and closes the fund. The best way to go about a metal-holding fund is to set up a hedge-fund with a long-duration lock-up period, say 10 years. This enables the managers to ride out commodity cycles and to buy/sell assets that aren't immediately liquid (i.e. you need weeks, maybe months to divest them).
    Aug 1, 2015. 08:16 PM | Likes Like |Link to Comment
  • Is The Gold Market Manipulated? Part 1: Introduction And The London Gold Pool [View article]
    My latest on REEs
    Aug 1, 2015. 04:15 PM | Likes Like |Link to Comment
  • The Rare Earth Junior Miner Market Is Bifurcating: Stick With The Winners [View article]
    Nick, there used to be a company that traded REEs called Dacha Strategic Metals, but during the bear market the stock started trading well below its intrinsic value and the company's assets wre liquidated and taken private, I think by Aberdeen International. An ETF or a business that incorporates the purchase of REEs--rather than the sale of REEs--at today's prices, would be a good choice. Of course given the amount of time required to ptu funds and a business-plan together this probably should have been done years ago.
    Aug 1, 2015. 02:11 PM | 1 Like Like |Link to Comment
  • The Rare Earth Junior Miner Market Is Bifurcating: Stick With The Winners [View article]
    Funny you should mention...
    http://bit.ly/1DYUPCn
    Aug 1, 2015. 11:01 AM | Likes Like |Link to Comment
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