Luke Belz

Luke Belz
Contributor since: 2011
The lockup expiration should still occur on March 22, 2011. The secondary share offering closed on December 22, 2010 and 90 days from that date is when the lock up expiration occurs.
Doesn't it bother you that Rare Element Resources has been prospecting the Bear Lodge Property for almost 10 years and they still continue to perform drilling assays? If they truly believed they had a mineral deposit worth developing, I believe they would have already begun filing for the necessary regulatory permits.
My research shows that on May 12, 2010, Newmont Mining decided not to exercise their right to acquire a 65% interest in gold and base metal claims at the Bear Lodge property (see statement below). Effectively, this information discredits any post that you have made regarding my articles.
Vancouver, BC -- Rare Element Resources Ltd. (TSX-V: RES) (“Rare Element” or the “Company”) announces that the Company has signed an agreement with Newmont North American Exploration Ltd. (“Newmont”) that Newmont will not exercise its option to acquire a 65% interest in the gold and base metals at the Sundance Venture of Rare Element’s Bear Lodge property, Wyoming. This allows Rare Element to maintain its 100% interest in the mineral potential within the entire property. In addition, all of Newmont’s 327 wholly owned claims outside the venture will be transferred to the Company.
I have no issue with an executive serving on the board of another company. However, as an investor, I do have an issue with a company when they admit that an executive officer spends 25% of his time working for other companies. As to your example of Eric Schmidt, I guarantee you that there would be a severe reaction to the company's stock if Goggle told Barron's that he only spent 75% of his time working for the company.
May 21, 2002
The acquisition of Paso Rico will be the Qualifying Transaction
for Spartacus. The purchase price of Paso Rico will be for
approximately 7 million common shares of Spartacus. The common
shares of Spartacus to be issued to the shareholders of Paso Rico
will be subject to escrow and/or hold periods in accordance with
the TSX Venture Exchange and applicable securities laws.
December 3rd, 2003
US Standard & Poor's Manual Exemption Filing
Rare Element has also commissioned the filing of a corporate
listing with Standard and Poor's, which acts as a manual
exemption filing for 35 US states. Upon completion of this
filing, Rare Element will be able to disseminate information on
its activities to interested parties in those states. The Company
currently has a significant base of US shareholders, which
resulted from the acquisition of Paso Rico Resources Ltd.
From their registration statement:
"Rare Element Resources Ltd. was organized in 1999 as “Spartacus Capital Inc.”, a “Venture Capital Pool” company. The Company changed its name in July 2003 coincident with the completion of its Qualifying Transaction, the RTO acquisition of Paso Rico Resources Ltd. (“Paso Rico”). Paso Rico’s main asset was an option to acquire the Bear Lodge Property."
My opinion is simply an inference from the management's current performance with REE and the other companies in which they participate as officers and directors. When you invest in a company that is in the "exploration stage" of mining, you are largely investing in the management of the company. With the management's attention diverted, I do not see how an individual investor could be optimistic about REE's future. Management will make money whether the mine at Bear Lodge is successful or not and I believe investors should be aware of that fact as well as their other commitments.
Thank you for you information. I am aware that it is necessary to be an "accredited investor" to participate. Rare Element Resources (AMEX) was formed through a reverse merger which enabled it list on the US exchange without the need for extensive regulatory review or auditing. This is not unlike the Chinese Rever Mergers that have been prominent in the Media for poor audits and underwriting standards leading to multiple class action lawsuits. It required less paperwork to file a secondary in candada than the US.
Have you considered that maybe you've only seen the tip of the iceberg?
That is a good catch. You're right, the news was available, but limited. The real question we should ask is why did the company choose to list the shares in Canada when the majority of the company's float is traded in the United States.
I completely agree that this type of behavior warrants a delisting of the company from the US stock exchange. Unfortunately, because the company is a Passive Foreign Investment Company (PFIC) I believe their lack of disclosure was perfectly legal. Their status as a PFIC is limited though because the majority of their shares are traded in the United States. In subsequent quarters, they will have to comply with full SEC disclosure which will stymie this behavior.
Thanks for your feedback. Are you still bullish on Rare Element Resources after reading my articles?
I am glad that you found my article informative. With so many different publicly traded Rare Earth Element companies in the "exploration phase" of operations, I think it is important for each company to be as transparent as possible. Based on on the information that I have gathered, I believe that Rare Element Resources has been more opaque than many of the other companies within the sector.
Thanks for the feedback. I agree that the company's officers do not have a history of establishing fully operational mines. They currently operate several other public companies that are also in the "exploration phase" of operation.
Michael-Just published a new article about REE regarding their secondary-offering and the concurrent volatility. Thoughts?
Thorough response, but I still take issue with their expected mill recovery of pre-concentrates at 90%. In their annual report, they state that the recovery ranged from 60-90% and that those recovery rates had not been confirmed on a large scale. Additionally, Molycorp shares a similar mineral composition as REE, but they use a mill recovery of 65%. Adjusting the base case scenario using a lower recovery rate makes the project economically unfeasible at a grade of 3.62%.
Theodore Butler is not wrong. Although Gold does have applications as an industrial material, it is predominantly an investment vehicle whereas silver serves both purposes. Silver is the most conductive metal and its lower price makes it considerably more viable for use in industrial applications compared to gold. Because it is also a precious metal, it also serves as an investment vehicle like gold.
Those are good points. The issue that I have is that I do not believe that REE would be able to develop the mine for 87mil as stated in their scoping report. The costs of maintaining those roads, building the necessary infrastructure, and stripping the mine would far exceed 87mil. Take a look at Molycorp's estimates for their initial mining costs. They project 150mil (excludes the cost of ore to metal extraction) for a mine that operate at 1300 tons per day. Unlike MCP, REE has zero infrastructure in place, so I find it difficult to believe that they can run a comparable amount of ore at a lower price.
As for having a small office in Vancouver and dual listings on the TSX and NYSE, I have two issues. The first issue is that REE is considered a "Passive Foreign Investment Company," which complicates the reporting of earnings for US investors. The second issue is that REE's only planned capital expenditure for fiscal 2011 is 15mil. I would prefer that a company with a 500mil market cap would have larger capital expenditures in a given year, particularly if they have billions of dollars worth of reserves as you stated. Even if it is a billion dollar project, at the current REO grade, it isn't economically feasible to operate the mine.
What did you think of my REE article?