Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Galaxy Resources' Press Release on The Ponton Project

          Galaxy Resources put out an interesting press release yesterday regarding their review of their Ponton Project in Western Australia’s Goldfields area ( It’s in the Queen Victoria Spring Nature Reserve but they do have an Exploration License Application (NYSE:ELA). The press release compares Ponton to Lynas’ Mount Weld. The Oxide percentages compare very well and the Neodymium content is impressive (28 % of the TREO). This is a very early exploration stage (Galaxy just commenced discussions for a tenement application). But the site is 70 km north of the Trans-Australian railway line and maybe 175-200 km from Mount Weld.
            Galaxy is an integrated Lithium producer with plans to mine Lithium in Australia and Canada and then convert the Lithium into batteries for Chinese electric scooters. It looks like they are basically a $350 million dollar lithium minor looking to vertically integrate and sell to the developing Chinese consumer. They are in the REMX and I guess this press release helps explain why.
          I think Galaxy is trying to take advantage of the tenfold increase in rare earth metal prices to help finance their vertical integration of the Lithium market. But I think the release is significant. When you plot Arafura’s Nolan’s Bore, Lynas’ Mt. Weld, and now Galaxy’s Ponton Project on a map it appears that Western Australia has some great REEs with strong TREO numbers.
           Now I know some will dismiss this as LREE’s and discount the issue. But with Molycorp commercializing XSORBX and using Cerium in water purification, these minerals cannot continue to be dismissed by the so called experts. Clearly, China is using the non-element specific quotas to export the heavier elements that cost more, but LREE have both use and demand. LREE prices are rising as fast as the heavies on the Asian Metal Pages and their importance to oil refining is not going unnoticed by oil refiners. Moreover, I do believe Moly’s XSORBX is ultimately price supportive for Cerium.
             I think this press release is is also supportive of the Lynas story too. I would not be surprised if Lynas shows up on Galaxy’s share registry in the future. Lynas by luck or planning seems to be in the right spot on the globe in addition to having a big first mover advantage. Whether Lynas partners or buys Arafura’s Nolan’s Bore or this Ponton Project, it is becoming clear that they are where some of the richest REE’s are found. Combined with Alkane’s HREE’s in New South Wales and Northern Uranium’s HREE discoveries in the Northern Territory and the full REE portfolio starts to become clear.
        Lynas’ ability to grow and produce more rare earth in the future seems likely. They have already said the LAMP could process additional ores in the future; And at one time they had a processing plant planned for Western Australia. The LAMP is scheduled for production in September 2011. This will be well before anyone else has any modern production facilities. It may be literally three years or more before any of these nearby (Non-Chinese Asian or African) miners would be able to build a processing plant. This means Lynas could be processing at maximum capacity (once the materials plant is running) well into the future based on all of the available mines and ore. Being only a few months away from completion in an industry so far behind the curve is a big deal.
         But the success of Australia’s REE finds does make me think Greenland and Canada’s Maple Leaf should be seeing some red and doing a little shaking. I understand many Canadian projects are rich in HREE’s and this is their path to profitability. But Australia’s projects have HREE’s and pretty good infrastructure. And I think if Australia added more material processing plants in the region, it is hard to see how much of the Canadian rare earth market will compete. Sure a specific miner with an unusually high content of a heavy rare earth element not found elsewhere could survive. And Molycorps cost effective and integrated model would work. But I would rather concentrate on Aussie juniors if I’m speculating on juniors at this point. They seem to have a wind at their back all things considered IMO.
      Now the stock I would be most interested in at this point is a magnet maker in Australia. I think Neo Materials Technologies is a good stock. And clearly Hitachi and Great Western (through Less Common Metals) can make magnets. But I hope either Lynas decides to make magnets later on or some other non-Chinese magnet making stock shows up with a plan worth speculating on in the future. In the meantime, good news for Galaxy Resources and best wishes to all.
I am long Lynas, Molycorp, Great Western, Neo Tech, Galaxy Resourses GALXF.PK and Northern Uranium NOURF.PK,

Disclosure: I am long MCP, OTC:NEMFF, OTCPK:GWMGF.