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REE/Strategic Minerals Concentrator, January 4, 2011 149 comments
This first chart for 2011 features the old standby as the baseline, Greenland Minerals (GDLNF.PK) compared to some of its leading REE competition. Avalon (AVL) is a standout this week, showing massive improvement as it makes a major move to catch Greenland, though it saw profit taking today. MolyCorp (MCP) is also definitely in the race, with Great Western (GWMGF.PK) showing some verve. Lynas (LYSCF.PK) is still pacing Great Western, though it has shed its earlier performance lead. Note that all the stocks are quite tightly packed and performing well over the 3 month period.
Today saw a continuation of the trend we saw earlier, where the REE/Strat. field began to behave more like a normal investment sector. Stocks have begun to sort out into 3 or 4 basic groups, although each day seems to feature several standouts with phenomenal gains.
The big winner today was Pele Mountain, up 41.94%. Far as I have been able to determine, this may be the effect of several positive articles based upon earlier results. This sector is very prone to these wild spasms, particularly as stock touts seize on the information and blanket the investor-verse with their come-ons.
Still, we should enjoy the profits as they come - and since I am long (PMNHF.PK), the up 41.94% is welcome indeed!
(SHZ) is up 18.07%.
(ALKEF.PK) up 14.02%. A great day for this stock which I know several of us own.
(MLLOF.PK) up 9.39%
(QREDF.PK) up 8.85%
(MCP) is up 7.48%
(NOURF.PK) is up 5.81%
(XING) is up 5.35%
(ARAFF.PK) is up 5.06%
(GWMGF.PK) is up 3.08%
(GDLNF.PK) is up 3.01%
Noteworthy on the downside today were:
(DCHAF.PK) down 1.82%
(REMX) down 2.34%
(TC) down 3.06%
(QSURD.PK) down 3.20%
(CHGI) down 4.76%
(TASXF.PK) down 5.21%
(RBY) down 5.82%
(DNN) down 6.53%
(NATUF.PK) down 6.88%
(AVL) down 6.77%
Everyone else fell somewhere in the middle.
The marked decline in most of these stocks which coincided with the precious metals action (which saw steep declines in silver, and a steady drop in gold) also had a slightly stronger dollar affecting the results.
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This post has 149 comments:
Today: Jack Lifton on BNN about Molycorp, Avalon and Great Western:
watch.bnn.ca/#clip396446
For newer readers: Jack Lifton, global expert about REEs bought 25,000 shares of Great Western sometime ago. He claimed the GWMGF purchase was the first time he had owned *any* equity in something like 26 years. I repeat, any equity of any company. I believe he only owns Great Western amongst all the REE choices.
I find that a fairly impressive fact.
Since he mentioned both HREE and refining capacity as important factors, I bet that's why he liked it.
HardToLove
Going way,way back, I always got the impression that Mr. Lifton was never a big "fan" of Lynas. He is very north american centric.
But of course, there is that huge mountain of their stock locked up and still held by the venture capital guys who brought MCP to market...
I'm thinking that come February we may hear quite a bit about any research they are doing prior to cranking up the mine, including whatever other deposits they are sitting on.
One thing about it, the original mine was never TASKED with producing the elements we are seeking now for some of the heavier elements. LOL, its like the American oil reserve story. If you stop LOOKING you stop FINDING. I suspect a similar tale plays out here...
I still see GWM as the natural takeover target for MCP, the fit is very interesting, and the ore from the South Afrikan mine would fill a void for the combined companies. Its also a similar project, re-opening a mothballed mine rather than starting from scratch, and like the Mountain Pass mine, with its various complex government papers pretty much already in place.
Avalon would also be an interesting match. As Jack hints in his interview, the consolidation necessary to create competetive companies out of the existing chaos revolves around large sums of money. Capital. MCP has about the largest hoard out there in the space right now, and as their stock price escalates (and the likelihood of American government subsidies skyrockets), the prospects are real.
On Tasman my Schwab account shows TASXF closing today at $4.80, up $0.40 for the day. It doesn't show any after hours activity. When I go to the Toronto exchange, I get the same $4.80 close for TSM (Tasman's symbol on the Toronto exchange). However, for TASXF:US (pinks), it shows $4.55, down 0.25 (your 5.2%) from $4.80. The $4.80 price is as of 3:59, and the $4.55 price is as of 3:57 (with much less volume). I'm confused. Which is the "real" Tasman price? It seems unlikely there would be that big a spread between the Toronto exchange and US pinks.
Consider the $4.81 correct, and strike the $4.55. I believe Yahoo just got it wrong.
HardToLove
I am wondering about MCP at this point as well. They have gotten really expensive...
I am going to be watching Lynas closely for a re-entry point, perhaps $2, but certainly not until it stabilizes a bit.
This could exert a big influence on all the pennies, of course.
Not necessarily so.. My potash juniors are going up!
:)
www.canadanewswire.com...
So we should have a good drop to find attractive (re)entry points down the road.
HardToLove
Ucore Rare Metals, Rare Element Resources, Great Western Minerals Group, Quest Rare Minerals & Tantalus Rare Earths.
seekingalpha.com/artic...
HardToLove
With a significant heavy rare earth element intercept at the China Yunnan Copper Australia (ASX: CYU) Mount Dorothy copper cobalt prospect, investors are providing very strong support for the stock.
The company's shares are up 52% in morning trade to $0.335, after peaking at $0.385. tinyurl.com/294fzmp
We are continuing to see a linkage between many commodities (pm, ree, some strat materials) and oil. This seems to be something that the major brokers are doing, though the logic escapes me. I suspect this is just misinformation, and the "logical" correlation will vanish as soon as oil establishes an upward bias.
Anyway, I am shopping, viewing this as a buying opportunity.
Picked up more (LYSDY.PK), (GBG), (ICO), (XING) and (PAL).
I see the dollar getting stronger short term against the euro. Silver (SLV) has dropped below the 50 day, and there was a HUGE option put against GLD announced two days ago. Silver *may* plummet on Monday; a pure guess based upon some technicals and a bit of eroding sentiment and sector rotation. So will gold.
Today is far and away my worst day in some time with the REEs. May be some more downside before it's time to add.
Best opinion I can offer.
Bob Pisani picked up Jon Hykawy's note on SA tinyurl.com/26sg8el (Is Molycorp Really Worth $4.7B?)
Basically, Hykawy claims that once Lynas and Molycorp come on-line, there will be an over-supply of certain rare earths and this will cause prices to plunge. Hence, Molycorp is over priced.
I happen to agree that Molycorp is over priced. However, I wrote an extensive comment on Hykawy's premise and pointed out that there is a difference between total supply and total reliable supply... but who cares what I said...
So I suspect the market over generalized and assumed that because Molycorp is likely over priced, Lynas is also over priced.
The market is not making the important distinction between total supplies and total reliable supplies... That's too bad for the market... in the mean time, I am accumulating Lynas.
Even the "35% reduction" is a number made against last year's quotas, which in turn were lower than the year before, etc.
Japan has already been pulling REEs from its strategic reserves, and South Korea is tapped out. They are trying to supplement what they have (and the insufficient shipments they can get out of China) with recycling, though for many of the elements this doesn't look to be able to fill the void, even after it gets ramped up and working. Costs to recapture some of the elements will be very high, the energy costs alone will be a multiple of the current market price, much less the original cost. There is a reason why Japanese companies are cutting deals with Lynas and MCP for years ahead, despite what some folks see as "high prices".
The numbers represented by Lynas and MCP COMBINED (when and if they finally go into full production, ignore the tiny production they might generate now, or even later this year) will total a small fraction of the world demand. Doubtless their additional production WILL result in price reductions in the stilted and distorted market for REEs that we see now, but its unlikely that those price reductions will move the price below the increased prices China is charging for their exports. Its not smart to equate "...more supply, lower prices..." with a zero sum market where NOTHING is zero sum. Demand is upwardly mobile as well, and those who DO control the price (China) are unlikely to do any acts of kindness to either competing sources OR customers.
Many of the assumptions being published by the pundits and xperts involve China altering their policy to fit the sensibilities of the pundits (something I would not hold my breath for). They also call for the Chinese to simultaneously be perfectly truthful (ie, the reason for the quotas has nothing to do with their desire to monopolize high tech manufacturing) and totally untruthful (ie, their estimates that their REE reserves have been greatly depleted).
Underlying all of this is the snide idea that the Chinese and the miners are just having a huge joke at our expense - that these materials are cheap because they have ALWAYS been cheap - that dense, commercially viable deposits are not "rare" but actually commonplace - and that its all just a scam.
In the end one researches the topic and reaches a conclusion that ties in with one of the scenarios.
I have done so, and I find the REE narrative compelling, and pointing toward a long term success story for those who invest. I am long many REE stocks for this reason.
Picked up some more (LYSDY.PK) at $19.45...
Continuing to watch MCP, as I have mentioned several times...
SGQRF, South Gobi, Coal, Mongolia
It appears that China's new REE Cartel may have a problem meeting their environmental goals.
Maybe 90% of their mines...
Note that this news is NOT a component in the news cycles we are watching....
[quote] Wang said that many domestic rare earth mills cannot reach the new standard, which restricts the emission limits.
"Judging from the draft of the standard, 90 percent of China's rare earth producers cannot reach the requirements," an industrial expert told the Economic Observer. [quote]
Also note that the Chinese see the low cost history of REEs as reflecting the lack of environmental standards.
Its a new game, and much as I look around, I find nohting that compels me to ignore common sense and believe the "...rare earths aren't rare..." crowd anymore than I believe the "...earth is flat..." crowd.
HardToLove
That's why that little figure of 1250 tonnes of HREES produced by Great Western starting next year becomes worth all the more.
HardToLove
None of the companies we are tracking require prices above the current Chinese price list to be profitable...
Extremely profitable.
In fact, the 2009 prices would have done just fine.
BUT any analysis of the potential income from the various mines should do both sides of the math...
Price per kilo...
AND the available world market.
Some of the most expensive items have tiny markets. It is THOSE things that are most vulnerable to supply outstripping demand, NOT the established markets for bulk commodities. Lots of folks are taking estimates of reserves on some of these so-called hree's, multiplying by the current market price per kilor or even ounce, and seeing a Jackpot!
While I too see markets for some of these less common elements growing in the future, SHOULD anyone crank up a large opertion to produce them right now, we most certainly would see prices drop... And deposits which lack the common (but marketable with a stable demand) elements in rich plenty might well prove to be unable to stand alone as a project UNTIL the world market grows enough to absorb that production.
As we have often discussed, TIMING is critical, and that means we need to see a real effort from the companies involved NOW to capitalize on a market which is here NOW (or at least over the next year-2years).
Elements like cerium which some look down upon are very solid, mature, and very large markets measured in many metric tonnes. Prices dropping by a large margin, say, 50% will not endanger the profitability of either Lynas or MolyCorp, and might indeed expand the marketplace (high prices tend to do the opposite, of course).
Also, the baseline being used by analysts is skewed, just as it is for other commodities like gold. The world HAS changed! Production costs are going up, HAVE gone up, and those old days "ain't comin' back around". Rare Earths (even the so-called "common" elements) are not cheap to mine and process. As environmental standards, labor, and general overhead have surged in the locations where these deposits exist (and particularly where the current mines are located), costs are pushing up prices. IS $60/kg cerium metal REALLY that expensive, given the costs? Some view $1400 gold as pricey, but with the average all-in production cost around $600-700, is it overpriced? Is a 100% markup in a major market of a major commodity really all that high? I don't think so.
We're looking at a case of overlapping events, with the surface layer obscuring the fundamental underpinnings.
Just as part of the story for gold is that it now costs a lot more to mine and refine the stuff (and therefore, the bullion price goes up), the same issue applies to REEs, in spades.
China's workers and state capitalists (lol, oxymoron alert on that one!) are pushing prices up, even for in-China consumption not related to export quotas.
Maybe Cerium should be selling for $30 now, if China would NOT jack up REE taxes, NOT add on huge environmental fees and requirements for their miners, and NOT do all the same things we have already seen done just about everywhere else on Earth.
The xperts would like to see China toe the pundit-line and make their quota system operate on a sliding scale somehow linked to prices the pundits think are "fair". China has a long history of solidifying their policy position in the face of this sort of outside pressure...
investorshub.advfn.com...
Their mixture of REEs includes other valuable and strategic metals like titanium, tantalum, zirconium, niobium and scandium.
The niobium deposit is particularly rich, second only to the world's largest deposit in Brazil.
Wow, excellent analysis! After work, I always look forward to the comments here. I'm hoping that at least until late 2012, we will have a great run. Around 2012 I'll consider selling my Lynas (held and never sold since 2009) when MCP comes on-line.
Hopefully, AVL & Quest will be held for much longer, perhaps decades.
Long: lyscf, avl, qsurd, emmcf, pnpff, tasxf,mtcef,gwmgf,ree
In for the longer-term is my next plan. Sometimes I get really, really tired of staring at the screens all day long trying to learn, analyze and *guess* what will happen next.
I'd sure like to get some stuff and just ignore it for a long time.
HardToLove
That's no way to save money!
And that doesn't even include the "opportunity cost" of that $0.45 (or whatever it's up to now).
>:-))))
HardToLove
What happens when some REE stocks with no published bid and ask prices and yet substantial no of shares are changing hands, like MTCEF ? Under the circumstances how does one trade them ? Use Arabic trader way, play with fingers in the dark ?
Can you shed some light on this ? I am sure that others may also be interested too.
Thanks
One possibility, for an occassional lack of display, would be a data feed failure. If it's every day, that's probably not it.
For OTC, pink sheets, ... it's often some manual processing required and there is no mandate that orders be entered in the national best bid/offer system. This is more likely on thinly-traded stocks, which it appears this one is.
There's also a possibility that entered orders are not "presented". This is essentiall the same thing I guess. But from personal experience I can say that I've had cases where NBBO is displayed but my order never shows even though the platform shows I have a live order. It was xplained to me that the OTC markets have their own rules and don't have to "present".
I mention that because the market maker for that stock may just not ever present, for whatever reason. I see that it trades on the NASDAQ OTC Bulletin Board (Pink Sheets). This is the same MM that was involved with the stock I had the question about. Your broker may have a way to get the bid/ask for you, since most brokers have OTC "desks" that can interface with the market makers.
Oh! Almost forgot. It may be that the suffix, such as ".PK" is needed on the trading platform and service you use? Your provider could answer that question for you too.
From the volume of trading, I deduce that it is not one of those infamous "dark pools". Those seem to be mostly for high-rollers on very desirable stocks with very large trade amounts.
I'll check in on the stock later today and see if I can see an NBBO display so we can tell if it's related to your platform or feed. I'll post if I see anything or not.
HTB ... OOPS! Now I'm infected! ;-))
Switched to real time and got bid and ask beginning @ 10:16:01.
Depending on your platform, keep in mind that stuff working in real time might miss the entry of the bid and ask, although the market depth level 2 ought to be showing everything in the system at that moment. But time and sales in real time will only pick up what comes in new.
So maybe it's selecting the right tool and setting the parameters (e.g. historical and start/end times vs. real time).
I hope that helps.
HardToLove
I do all my trading on line and hardly ever talk to the broker. I do my own dd. On the pink sheet stocks like most of the REEs, does it help to trade through the broker ?
But as I mentioned, it could be just a data feed or parametrs problem. Your platform provider should be able to help determine what the situation is and provide help correcting it, if there is a fix available.
HardToLove
my apology again.
NP, I suspected you meant me.
I do a "brain dump" up in response to your first attempt.
HardToLove
IMHO, there is a political question here. Will the US (and others) begin to respond to a developed, highly sophisticated China (as opposed to a backward third world labor force) with economically defensive policies. I don't mean tariffs, but focusing on some tactical "on-shoring." If so, strategic development of ree, energy, etc. domestically and from nearer allies seem essential. There are some industries that have been way too outsourced from a national security standpoint.
I'm in Florida right now and just took my nieces to Monkey Jungle where the resident zoologist /primate specialist noted that the monkeys fight for dominance in the social order daily. Every day there is screeching, mock fighting, real fighting, etc. all to determine the social status within the troop. We're primates, too. And our governments typically act -- often at our behest or on our behalf -- like screeching monkeys (or chest-thumping great apes) in asserting dominance.
But dominance is a shifting thing. China has an aging population with no social safety net and a culture that demands taking care of and respecting the aged / a workforce that is restive at best and rebellious at worst / too little water for too many people / polluted land, water and air that must be cleaned for public safety / etc, etc.
In the physical world a body in motion tends to remain in motion until met by an opposing force; in the geopolitical, however, I am not among those analysts who believe the same rules must apply. Sometimes exhaustion, inflation, or other internal factors are quite enough. Or maybe just from hubris, by taking advantage of a transient situation and pushing too hard thus alienating too many others in the troop who might have been allies if only they had been less egregiously arrogant...
There is a potentially great impact coming from the domestic political scene as well. Will the new Republican force in Congress choose to put forth a strategic move based upon the RESTART bill? I believe so, and this might well become a headline news event as the rare thing that bipartisan groups support.
I consider 2011 to be the year that many powerful forces within the REE sector begin. We will see for the first time how the new Chinese Cartel will work - how a full year of sub-demand supply plays out against a backdrop of sparking shortages in random places - and how well important consumers like Japan and South Korea cope. It will also be the year that sees countries and corporations around the world initiate stockpiling of REEs, which ironically will have a major hand in how the shortages shake out. Finally, it will be the year when small episodes of ex-China REE production begin to emerge, starting with Lynas. This "first to market" mantle will fall to Lynas for concentrated oxides, though the real action will revolve around refined metals (2012 will be the year when that action gets interesting).
Don't be shocked when one of the first customers for Lynas' new Malaysian plant will be their leading REE competition. DCHAF will be buying high purity metals -Great Western will be looking for metal to feed orders for high tech goods at the UK facility - and MCP will be seeking to sell Lynas oxides for refining, or to hire them to sub out the refining phase until MCP's own refining capacity (still yet unborn) can be built.
Trading sideways at the moment at $18.30
Stopped out at $19 and change late yesterday, retaining (LYSCF.PK) core.
Buying opp. is looking stronger.
Will probably add more (GWMGF.PK), (TASXF.PK) and some other REE pennies this afternoon, if the prices stabilize. I am now expecting a steep "V" when things do turn around.
Maybe it'll come back to me again.
HardToLove
This could turn things around.
"As goes the first week of January, So goes the Rest of January. As goes January, So goes the Rest of the year."
An old Fact until it didn't become a fact due to widespread anticipation.
But since its a penny, the absolute numbers are not large, so I believe I will just wait to see how it plays out next week.
This morning, we are seeing a nice recovery (very v shaped indeed, actually) in many of the REE stocks. MCP, however, is trading slightly down, after rallying last week.
At one time Lynas and MCP frequently took turns "leading" the sector...
With Lynas rallying this morning, one can only hope IT assumes that role rather than MCP.
Just wanted to put a heads up here for anyone thinking of adds or entry around here.
HardToLove
January 6, 2011 (From: People's Daily) -- New national standards for pollutants discharged by the rare earth industry are pending the approval of the Standardization Administration of China and are expected to be released this year …
Wang Guozhen, former deputy director of the China Nonferrous Metal Industry Association, noted that the environmental costs of the rare earth industry will double after the implementation of the new standards, which are much stricter than previous ones.
China's Ministry of Environmental Protection approved the standard on Dec. 30, 2010, according to the ministry's website.
Wang said the low prices of China's rare earth metals were mainly the result of the lack of environmental protection costs under previous standards… Wang said that many domestic rare earth mills cannot reach the new standard, which restricts the emission limits.
"Judging from the draft of the standard, 90 percent of China's rare earth producers cannot reach the requirements," an industrial expert told the Economic Observer.
tinyurl.com/29e3hnr
______________________...
January 7, 2011) (From: Metal Pages) China to introduce strict environmental standards on rare earths production this year, expected to double costs tinyurl.com/2ep7fam
[You need an account to read the full text of the article, but the headline tells the story - expect prices to substantially increase]
HardToLove
This article, if taken at face value, COULD well mean some major crimps in supply...
It could also be part of the WTO battle which feathures heavy hitters and might well presage how THAT matter will play out over the coming year. The geopolitical element is VERY powerful.
37% of world's supply went glug glug
Rails, dry shipping and steel should all exhibit increased profitability...
Reports of the extent of the infrastructure damage and damage to those mines should be closely tracked. I am hoping to have a coal news concentrator up sometime in January.
Ain't gonna happen if power generation spikes along with basic materials and food prices.
Imagine the amount of work which will be required just to bring back the previous Mine Safety standards. A month or 2 under water, Shiver me Timbers.
Disclosure: I'm in only 4 REE companies at the moment, MTCEF, MLLOF, QSURD and TASXF. Their total market cap is equal to about one Avalon, or five Lynas.
Obviously, these are just my conclusions. I would be very interested in other reactions to the data. It certainly wouldn't be the first time my reasoning has been off base.
1/7/2011 approx market caps, in millions:
MCP $ 4477
LYSCF 3142
AVL 603
REE 491
QSURD 331
TASXF 228
GWMGF 143
MTCEF 69
MLLOF 23
By your calculations, it looks Tasman Metals is really going up in the rankings.
MCP is a creature of its stock lockbox constraint, which has the bulk of its available stock locked up and untradeable until January 25. Its hard to correctly value the stock due to this factor, though I suspect that, due to the nature of the deep pocket/sophisticated list of venture capitalists and industrialist who own that stock (directly or indirectly) that they will manage that situation to keep stock prices high, rather than crash the company...
I won't go into my problems with (REE), which revolve around its management, just IMO not my pick of that litter...
Those studying Lynas need to review its status on the ASX exchange in Australia, rather than the distorted information available via the various ADR or Pink Sheet listings here. Lynas is one of the newest listings on the ASX 100 (a prestigious accomplishment, like getting listed on the DOW here) - and it is wise to research their prospects as the Western mining stock gearing up to reach the market "firstest with the mostest". Key items are their Mount Weld project, which is very close to full functionality as an open pit mine - and almost as close to opening their new processing/concentrator facility. Note that their deposit includes the 2nd richest deposit of niobium on the planet, and large quantities of titanium and tantalum, in addition to REEs.
Unlike MCP, Lynas has already been through the disruptive steps to create a billion shares for active trading (MCP is almost certain to dilute their shares soon, though the more determined think they will split instead).
I believe Lynas is actually a bargain at current prices. AVL I consider close to fairly priced, while most of the exploratory and junior stocks are of course highly speculative and awaiting the inevitable shakeout and consolidation which we can all expect.
MCP, for instance, is likely to straighten out their corporate structure situation Q1 2011, and should be in M&A mode by Q2.
Lynas has already made a tentative move in this direction, recently pickup up 10% of (NOURF.PK).
Many of the pink sheet stocks we discuss constantly in these blogs are prime candidates for M&A from the larger cap stocks like Lynas and MCP.
Volume has been good the last three days and the short-term bottom seems to be in. I wouldn't be surprised to see PPS try to close the gap and run to $2.24, just closing the gap, or even to above a trend line currently @ $2.26.
I'll be entering some today ahead of the flip of the technical indicators telling me it's time.
HardToLove
HardToLove
HardToLove
And their support folks can also help answer those questions.
$9.99/trade, 150 trades/qtr $7.99 next quarter, Power ETrade pro free w/30(?) per quarter.
HardToLove
finance.yahoo.com/news...
On the technical analysis front, although we gapped up this A.M, and gaps do like to fill, we also have recent gaps above the current level that need filling and the stock price has exhibited a history of filling these gaps - just won't fill the nearest above today.
A longer-term trend line indicates an average up move of ~$0.01 per day and whenever this line is penetrated pps seems to come back into area within a couple of days recently.
BTW, the recent gap above that needs closing is *below* a longer-term resistance.
The other technical indicators I follow had not showing positive bias as of yesterday, but during today's action, several have flattened out from a negative bias and a couple have flipped towards trying to go positive (OBV, momentum, ADX with AD+ and AD- starting towards a cross possibly).
All this on fairly reasonable volume, although it certainly doesn't approach the *huge* volumes seen recently in the big run up.
MHO,
HardToLove
Battle now is $2.11/$2.12, and looks like it will likely settle back, for at least a while, at $2.11. But it will take a while for the settle to happen.
Of course, a time passes, buyers and sellers change their positions, so it might move either way as time passes.
HardToLove
I'm a little wary about the next couple of months when it comes to the REE sector. Last year, many of the REE mining companies saw a significant drop in their prices through Spring and Summer and I worry that we may see the same trend this year.
As to the seasonal, I suggest you take the time to read all the comments in this and one or two of the prior REE concentrators. They reflec the change in environment (predominately the new concern with "strategic availability") that has changed the political environment. Tripleblack is very much on top of these issues and his comments are probably the most cogent of all. I expect your conclusion will be that "seasonality" is not a major concern right now.
Other factors - Australian flooding, (MCP) IPO lock-up, ... - will be much more the movers right now.
HardToLove
Specifically because I can see any number of ways for the deep pocket pro's who own all that stock to game the unway.
Setting up a short trap is quite possible with the resources these guys can call upon. If nothing else, all they have to do is go long the relatively few shares trading daily in the markets (although those few are trading like mad, most of them changing hands rapidly, multiple times), and then on the appointed day just NOT sell, but instead buy. The short squeeze could be astounding...
And then with the proper timing, sell INTO the squeeze.
We will, I suspect, be here talking about any such event, and I will be a seller come the day, or, LOL, more likely, the day before or the day before that.
Those of us who have been in the stock from the beginning have a considerable leeway to operate within, but I would still say that this is a perfect example of a very dangerous and tricky play.
You stated that you felt Lynas was undervalued at this time. I've always had a hard time deciding what the peak price per share could ultimately be for Lynas in the next 2 years. Do you think $ 6.00 -7.00 is reachable considering all of the shares it has.
Any guesses on a peak Lynas share price?
And that assumes no more geopolitical nonsense with Chinese exports, a bet I would NOT make!
If anything, I think my numbers are conservative.
So, Is It Underwater or are the Access roads, Rails Underwater?
Does Queensland materially affect them?
Mount Weld is located about 100 miles northeast of a gold mining region centered on the town of Kalgoorlie. Kalgoorlie was historically noteworthy partly because President Herbert Hoover developed his expertise as a mining engineer there when he was a young man.
Lynas will truck the rare earth concentrate southwest to Kalgoorlie, then west about 400 miles to the Indian Ocean port of Fremantle near the West Australia state capital of Perth according to the company website. Then it will be shipped north to Kuantan, a port city on the east coast of Malaysia, for milling and processing.
If I can track that article (Australian newspaper) down, I will see if I can figure out a way to come up with a railroad play...
I thought it was unfortunate that the milling plant wasn't situated in the Kalgoorlie area. From there the advanced materials could have been shipped for export west to Fremantle or east to Whyalla.
There must have been some political and economic contraints involved in the shipping and manufacturing decisions.
On our charts, through yesterday, I think we might be entering a consolidation period, but it is really too early to determine that's the case.
We have a middle trend line that seems to have offered resistance and support in the past. If it holds, low today s/b $2.01 or so.
But we do have to keep in mind that the correlation of price action on the ASX and here seems tenuous recently, so I'm not really suggesting, strongly, any specific moves. Yesterday's volume was good, price spread was reasonable, we opened gap-up, closed higher than open and a couple of technical indicators started to turn less negative.
Just a heads up if you are trading near-term.
Given the above, I'm planning on holding my new position unless we go towards $1.95 or so.
HardToLove
finance.yahoo.com/news...
www.techmetalsresearch.../
Here's another interesting part, TMR consulted with Bloomberg to create the list:
"The Bloomberg Rare Earth Mineral Resources Index is a modified market capitalization weighted index whose equities are capped at 15%. For inclusion, a company needs to have a mineral resource whose definition is compliant with either the National Instrument 43-101 or Joint Ore Reserves Committee Code classification rule. Technology Metals Research consulted on the index creation."
OTOH, Greenland appeals to the fans of nuclear power (which is of course the source of much of the economic success of the French over the past few decades) BECAUSE of its large Uranium deposit, in which the REEs are a true by-product.
It will help me decide on the Europe factor.
I've read somewhere that Greenland Minerals figures that proceeds from their uranium mine would financially support the development of their rare earth mine. It sounded like the uranium will come first, then the rare earths.
I was sorry when I heard the mine closed down some years back. I still get a twinge of sadness when I hear about a mine shut down or a railroad line abandoned or a lumber mill closed up.
I attended a talk given by Jack Lifton in Vegas a couple of years ago when the recession started to turn ugly. That was when I decided maybe I better take a look at that sector along with the others.
This may seem insignificant, but on a day when bias seems to downside, being able to hold around this level portends coming moves up again, I think. Especially after the ASX showed such weakness and we're apparently not going to follow it south.
HardToLove
Adding more (LYSDY.PK) this morning...
Also adding (AVL), (CHGI), (GDLNF.PK), (ICO), and (REMX).
finance.yahoo.com/news...
But they're back, with a major hit of niobium, a REE metal which helps strengthen steel. "Only three significant mines supply the global market."
(TGB) up 14.95% today:
VANCOUVER, Jan. 10 /PRNewswire/ - Taseko Mines Limited (TSX:TKO.to - News) ("Taseko" or the "Company") announces that its 2010 core drilling program completed at its wholly-owned Aley Niobium Project located near Mackenzie, British Columbia has been highly successful. Assay results indicate strong potential for development of a major niobium deposit and mine operation.
finance.yahoo.com/news...
Disclosure: I bought some Taseko
www.reuters.com/articl...
(PAL)'s going to have a good report because palladium has soared in the last quarter.
Good call!
Please go to the new Concentrator.
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