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Gareth Hatch
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Gareth Hatch is a Founding Principal of Technology Metals Research, LLC. He is interested in helping people to understand the challenges associated with the growing demand for rare-earth elements [REEs] and other critical and strategic materials, and how those challenges affect market sectors... More
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Technology Metals Research, LLC
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Technology Metals Research, LLC
  • Introducing The TMR Advanced Rare-Earth Projects Index 0 comments
    Jan 7, 2011 1:11 AM | about stocks: REE, GWMGF, LYSCF, GDLNF, MCP, AVL, TASXF

    In the recent past I have published charts and graphs that were based on metrics associated with certain rare-earth deposits currently under development. I’m frequently asked why I include certain projects in such analyses, and not others. Despite mentioning them in a recent article, I thought I’d revisit the criteria that I use when selecting projects for attention, and to formally introduce the projects that form what we refer to as the TMR Advanced Rare-Earths Project Index.

    Note that I am first and foremost interested in the rare-earths sector from the strategic point of view. I am interested in the potential value that specific rare-earth deposits and their development could have, in the furtherance of the needs and demands of the overall technology supply chain. In theory, projects that are good for the supply chain in this way, should also be good investments, or more specifically, the companies that own and operate such projects (if they can do soprofitably). Obviously things don’t always quite mesh in this way, but you get the idea.

    To put things in context, as of the beginning of January 2011, I’m tracking 275 rare-earth projects that are being worked on by 180 individual companies in 30 different countries. This does not include projects in China, India or Russia, or projects that are not at least partially owned or operated by corporations or other non-state-run entities. It also does not include projects whose information is not in the public domain, and / or are simply not known to me at the present time.

    As you might imagine, the present status of these projects within the overall development cycle varies widely (and wildly!). Some are associated with properties for which there is only a minimum amount of rare-earth-related data available. Here we’re talking about grab samples, soil samples and perhaps the odd historical trench. Others have had some drilling work done on them, while others have been extensively drilled and explored, and have comprehensive datasets that can be used to model the deposit. In a few cases, properties have actually been mined in the past.

    In order to narrow things down a bit, I focus most of my charts and data on what I consider to be advanced rare-earth projects. As I define the term, advanced rare-earth projects are those that have been either:

    • formally defined as a mineral resource or reserve under the guidelines of a relevant scheme such as NI 43-101 or the JORC Code; or
    • subject to past mining campaigns, and for which reliable historical data is available, even if not formally compliant with a relevant scheme.

    The projects that meet the above criteria, form the TMR Advanced Rare-Earths Project Index. In the near future, we’ll be publishing a dedicated page on the TMR Web site, accessible from the navigation bar above, containing summary information about these projects. We’ll update the page on a regular basis. As companies publish 43-101- or JORC-compliant resource estimates, we’ll be adding those projects to the list too.

    As of January 6, 2011, the TMR Advanced Rare-Earths Project Index includes 17 advanced rare-earth projects, being worked on by 16 different companies and located in 8 different countries. Those projects are:

    Some of the projects above have only just recently been added to the Index. If the buzz in the rare-earths sector is correct, we can expect a couple of new additions to the list too, in the very near future. The absence of a project from the above list, is really just a reflection of the amount of public-domain information available for the project, not of any inherent “flaw” in the project itself. In time, we’ll see the Index continue to grow and to expand, and I’ll probably have to start to use tighter criteria to define what “advanced” actually means.

    On December 21, 2010, Bloomberg launched its Rare Earth Mineral Resources Index, which is a “modified market capitalization weighted index” that includes most of the companies listed above (or will include them once the companies with the most recent 43-101-compliant resource definitions have been added). TMR assisted the folks at Bloomberg in developing the Index; they decided to use only the first of the two criteria above, for a slightly more-stringent requirement for inclusion than I use for the TMR Index.

    I’ll be writing more on the TMR Index and its constituent projects in the near future, including some updates to previously published charts, as well as some new comparisons that will be of interest to some. We’ll also get into more detail on the Bloomberg Index as well.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Themes: rare earths Stocks: REE, GWMGF, LYSCF, GDLNF, MCP, AVL, TASXF
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