Analysts downgrade the company's stock price.

Luisa Moreno pointed out that often companies encounter delays with engineering and in this case, with the calcinator oven not being up and running fast enough, she felt that there might not be any revenue coming in to the company until 2014, said revenue to have come from the HPA facility.

This led her to lower her target price from $8 to $4.60 per share, a huge drop. She acknowledged that all companies have engineering delays sometimes but with the 2012 loss and now the delay in revenue projections, and that today's low price is an attractive buy point for new investors in the stock.

Nothing was said on behalf of those small retail investors who lost everything the last couple of days however.

Analyst Jon Hykawy also lowered his target price from 90 cents down to 75 cents, and kept his sell rating for the stock. Ms. Moreno rates it a speculative buy still.

My take is that the analysts calls did not cause this stock's precipitous decline, it just accelerated the speed with which it fell, playing right in with the large short seller's plans.
I do not blame the analysts for the debacle that occurred today.

But I do think that RB and the BOD should look right into the mirror to see those partially responsible for today's carnage on the exchange floors.

Here is the reference that I found in the MD&A:

" downward revisions in securities analysts' estimates or changes in general market conditions;

o lack of funding generated for operations;

o delays in the construction of our projected SGA and other facilities and increased costs related to our
HPA and projected SGA production facilities; "

I missed the below section which led me to believe incorrectly that perhaps management omitted it by choice or incompetence. I wish to apologize publicly for making that statement after not doing a more thorough reading of the document. Regardless, the delay with the oven directly effects investors as it pertains to future revenue projections which are vital to future capital raising and share valuation, with a firm share price useful as bait to entice institutional investors to take positions with the company. This I believe was the main driver behind the massive selloff today with over 11 million shares being traded, of which 8 million or so were dumped after the trading halt with the stock was lifted.

Here is the correct information which clearly shows that in this instance the company did provide advance warning regarding the installation of the calcinator oven. Here is the appropriate section from the most recent MD& A. I wish to thank Whaspe for advising me of this:

"

6
As a result of a management review of the project timelines, the HPA plant commissioning and optimization
activities are now expected to continue into the second half of 2013. The procurement and installation of a
new circulating fluid-bed ("CFB") calcinator is now anticipated in the second half of 2013, to supplement the
existing rotary-kiln calcinators which have a nameplate capacity of less than one tonne per day. Given the
foregoing, the HPA plant will operate throughout the second quarter of 2013 at a Phase I capacity averaging
less than one tonne per day, and following the commissioning of the new CFB calcinator, will increase to the
Phase II capacity of three tonnes per day, anticipated in the last quarter of 2013, followed by a gradual
increase to the full production capacity of five tonnes per day in 2014. The declaration of commercial
production is anticipated at the beginning of Phase II. "

As mentioned in several places online, there is no doubt that the company does not provide enough information to satisfy some investors, including myself, but in this case they did. Perhaps the shorts seized upon this factoid from the MD&A along with the analysts downgrades to give them the momentum to drive this stock down further, who knows? But the misstep above aside, the reticence with which it appears news is released concerns me and others as well, and is reason enough to ask the company to get serious about getting a better team to handle little matters such as releasing news on a timely basis and more often than is currently being done.

The now greatly reduced market cap is going to have a major impact when this company goes forth later this year, hat in hand, looking for further capital to burn their way through as they await the now delayed revenues to appear in 2014. Don't forget that nothing will be coming from Veolia for at least a year, so you can't count on any residual income from that source to show up on the balance sheets. Nothing will come in on the SGA front either, as no deal has been made yet with a JV partner to finance and build the plant. Ditto, no revenues from rare earths, etc. About the only money I see coming in: HPA sample sales and possible 1 ton/ day HPA production won't come online until near 4th quarter, at the earliest. Of course, the tax credits may roll in but exactly when?

I think we can also safely rule out warrants as a way to raise money also, after the resulting share price from today's bloodbath. So where exactly will Orbite management go to get more capital?

With banks not lending and potential JV interest now possibly more predatory in nature than before and with some real strings attached now, my guess will be through further share sales and more dilution to the already "market diluted" shareholders. As said in the movies and paraphrased here,"it's a fine mess that we are in now."

This company just may be wounded beyond its' ability to recover on its' own, and this leads me to believe that the bane of the aluminum business may rear its' ugly head again and one of the majors just may attempt to take over this company, to get its' technology. Or a hedge fund manager recognizing a real opportunity might try to take this company over and go private. I don't have much faith in Orbite management to defend itself and shareholder's interest in that event; that was my opinion when I originally wrote this post and it is still valid now even after this mea culpa I am offering up now.

This management team in some ways is stellar, in others they are rank amateurs. This problem is starting to look like more than a need for a new public relations staff, but for a change at the top and in the boardroom. I echo the sentiments expressed by some that
RB should be booted up to the role of going out and drumming up the business, and bringing in a hardnosed man or woman to run the day to day operations of a visionary startup. One that also understands that retail investors are not just a doormat but part of the future of the company. One that will work with stock analysts in order to maintain or increase the share price and facilitate access to the capital markets.

Right now, I feel like my checkbook got a real good drilling the last couple of days, and I can't help but wonder how it might have gone if Orbite had been more forthcoming on all matters, at the minimum I would feel like I made a decision based on access to most of the facts, good and bad, instead of just buying the story and the Pablum put forth by the press and investor relations folks at Orbite.

Let me restate that I did miss that paragraph that I inserted into this revised post. It is hard sometimes to admit error but not in this case. I can eat a heaping helping of crow as well as the next person, and in this case it was a Jethro Bodine size plate of Granny's crow pie. But all that said, my discomfort with how news is released to us from Orbite still stands, and I still believe that they have made missteps which have helped put the company and our investments at risk. I stand by the call to make some change in the way they deal with investor related news releases, and I absolutely still feel that a change in top management and perhaps the board should be considered. And the following sentence still sums up my feelings of what we investors should practice from here forward.

As I have said here before and I really mean it now- we need to trust but verify from now on, and hold this company's feet right up to the arc welder to get their attention, if required.

This blogger is no mining or financial expert and makes no claim to be. Neither is he registered as a professional and licensed securities broker or financial planner, and has no plans to become either. Anything expressed here is this blogger's opinion and should be taken with a grain of lanthanide dust. This blogger is long EORBF and that material fact may cloud his judgment.

Morongobill

Disclosure: I am long [[EORBF.PK]].

Such unrequited love might not be shared by others this morning however. The chatrooms are a cacophony of anger and recriminations, as well as sadness and longing for the old days, when the stock rode high, yes, before the need for honest and complete and timely news releases and md and a's.

Why there is even talk of sending RB, the CEO, packing.

All I will say is that such lamentations and accusations are common and necessary at a time like this, a time of great loss personally and financially, in order to move on and assess the damage and to formulate a plan for the future. I am referring here not only to investors such as myself but to Orbite Aluminae's management team as well.

I am a newcomer to Orbite, the rare earth blogging business and to rare earth and penny stock investing. I am not familiar with some terms that were bandied about today on the forums such as naked shorting but I am a quick study and Google is my friend. I may not know all the ins and outs of how stocks trade or how they might be manipulated behind the scenes, but after a lifetime of reading about and working in big business, there are a few lessons learned in the past that may apply today.

This is a quick post and hopefully I will remember the main points from my skimming of the news and the news boards, as well as my readings of various Orbite and industry publications and papers.

First, there is no doubt that this was a short attack. Whether it was a concerted effort, I don't have a clue. I will say this, the novice that I am, even I could see that serious money could be made in the last few days shorting this stock. Short selling is a legal and historic part of the stock trading game and we might as well learn to live with it. If I had the financial backing and wherewithal, I might have shorted this stock and Molycorp the last few days. After all, making money with all the tools available to you is allowed in this business. It is up to the authorities to regulate and police these markets, and to the rest of us to obey the rules or face the consequences when we break them.

Second, as Antoninus has noted several times over at the Stockhouse forum, and I am paraphrasing here, the company needs to provide complete and timely information and not leave us investors left dangling out in the breeze. He even wrote a suggested news release that should have been the model for the one released by the company before Good Friday, instead of the one that they did release, which in my opinion has helped lead to the slaughter we have observed today. That blood and gore all over the trading floor can be directly placed at the feet of current Orbite management in this writer's opinion; and yes, perhaps it is time to think the unthinkable, that perhaps there should be no sacred cows at Orbite Aluminae; some in management better offer their mea culpa's today or face shareholder and the Board of Director's wrath later.

Third, we need to start thinking about the future in the immediate short term instead of dwelling on the past. All the pipedreams about a JV partner riding up on a white horse right now to ignite a short squeeze to drive this stock back up, wipe out the evil shorts, and save the current management's bacon, are just that, pipe dreams.

It ain't gonna happen, folks.

There is absolutely no doubt in my mind that after today's carnage and possibly tomorrow's as well, the Rusal's and Nalco's of the world are now licking their chops in anticipation of getting control of this revolutionary technology which will save their own behinds at fire sale prices. The aluminum business is in the doldrums financially right now, and if they can swoop in and pick up this technology and intellectual property- the whole enchilada- for a song, they will. Or a hostile takeover run from a private hedge fund might suddenly appear, anything is possible.

My best guesstimate is that whatever happens, it will not be to my or your benefit. We are just the pigs that are about to be slaughtered, with strict adherence to the laws of course. Of course! The same laws made and lobbied for to benefit the big boys, of course.

On a personal note, having ridden this down from $1.73 to $1.07 in about 2 weeks time, I might as well stay in it for the long haul. Who knows, if the company is taken private by a hedge fund, maybe I will make a couple of bucks. But I will also take away a little more lessons as well.

I bought into this and have even caught myself telling friends about our revolutionary technology and processes. Does that sound familiar? We need to learn that it is not our company, it belongs to the sharks, we are just the minnows to be swallowed and spit out
at the will of the sharks, whenever they feel like it. And we had better learn to live with it. It has always and will always be so.

By all means, we should not give up believing in investing, especially in small companies, but we do need to grow up and learn what we can and can not do. We have to think with our heads, not with our hearts or our checkbooks. We have to quit acting like doormats and when we think management of companies that we invest in aren't being forthcoming, we need to call them out. Unlike the Buffet's of the world, we cannot make them do anything with our raw power, but we can goad them into action by playing on their consciences and desires to do good and to be accepted. As one, we are little pissants to be stomped on, but united as shareholders we might get a little respect at least.

Respect for shareholders,something that I have seen very little of from the current management at Orbite and some other businesses that I have observed recently, especially in the junior mining world.

It might behoove these young upstart companies to consider the fact that hundreds will go extinct this very business quarter, and that a little humility might go a long way in helping them through these depression like times financially. The old days are gone and probably for a Hell of a long time.

There are others much more talented and well schooled in business than I so the deep market theory and analysis, I will leave to them. But the core problems, I believe I have covered. You may differ, if so, would you care to comment?

In my life, I have done everything from limbing downed trees with an ax at a small pulpwood operation in south Georgia, to sitting on the foreign currency desk at a major bank headquarters in downtown L.A., to working as an independent rep for a major chemical company calling upon supermarkets for 16 years, to my current position as I await retirement, shuttling folks to Disneyland- I say all this to give you a little insight into who I am, this smalltime blogger that many of you are now visiting daily. I am no expert, but at least I do have some skin in this game. I may be a little older than many of you, but I am still young enough to enjoy writing this and especially in interacting with the readership.

Even though some of you might feel p----d o-with my take on EORBF and ORT's current
management situation, I hope that you will come back here and contribute to the discussion and our understanding of the rare earth and investing business.

I look forward to our next visit, where I hope to discuss the destruction by authorities of a junior miner in Quebec.

Come back anytime.

This blogger is no mining or financial expert and makes no claim to be. Neither is he registered as a professional and licensed securities broker or financial planner, and has no plans to become either. Anything expressed here is this blogger's opinion and should be taken with a grain of lanthanide dust. This blogger is long EORBF and that material fact may cloud his judgment.

Morongobill

Disclosure: I am long [[EORBF.PK]].

The company just released the year end financials as well as the management discussion and analysis Thursday, and while I felt that things are moving along to plan, some in the stock chat forums seem to think that a signal was sent regarding the SGA(smelter grade aluminum) plant; that it might be delayed, with one or two even saying that it isn't even needed. I disagree.

The whole premise behind this company is that it started with technology developed to process aluminum from clay deposits, which has been almost impossible with the prevailing 100 year old Bayer process. There are many such clay deposits in the world and Orbite happens to have the rights to a large deposit in Quebec. They have proved that their process works and entered into MOU's with Rusal and Nalco to try to get a joint venture partner to assist in building the SGA plant, which is a hugely complex and expensive undertaking. The Rusal MOU in particular has worried some investors in that it was signed a year ago and there still is no further news- it just has dropped from the radar. This has led some to speculate that perhaps they are trying to cut Orbite out or have lost interest. which might be part of the reason why institutional holdings of this stock are still under the 4% level. Said institutional holdings being the bedrock upon which the stock price normally rests upon.

It does make you wonder why one of those investors, AGF Investments Inc, dumped half of their holdings or 3.5 million shares during the last 6 months of 2012, was it during the run up or during the long decline which is still ongoing, from around October 2012 until now, which has seen the share price drop from around $3.60 to the $1.55 level today.

It is not like Orbite is without accomplishments. The deal with Veolia Environmental Services to be the exclusive agent using Orbite's patented redmud cleanup process is one example. This will be an absolutely huge money source once the first plant has been built and other companies or governments can see for themselves that it does work. Veolia has one year to get the building underway, that's my understanding of the situation, and this is a perfect example of picking off the low hanging fruit by Orbite, in the sense that someone else will be putting up the money and then paying off Orbite with a never ending stream of royalties once plants start going on line.

Another accomplishment is the news that Orbite is now in the business of selling HPA aluminum now to end using manufacturers. The news that already 25 businesses have
purchased 1-100 kilogram samples for testing purity etc is huge. Orbite is now officially a supplier and this is a Rubicon moment for the young company.

There are other things happening but this blogger feels that there is enough news listed here to come to a firm conclusion about whether or not this speculative penny stock should belong in one's investment portfolio. YES.

But you need to understand that this is primarily a retail stock with over 90% of the shares currently being held by individual investors, who may be prone to panic with the fact that the stock has long a favorite short target for day traders and others, which has led to this long price decline.

There is still a huge amount of short interest outstanding and a consensus seems to be building that something big may happen tomorrow, after the holiday and the release of the financials before the long weekend. All I will predict is that it will probably be a wild ride tomorrow and that it would be in the institutional portfolio managers, who might now be interested in the company since it now has a real product to sell and potential revenue streams materializing soon, interest to see the shares driven down further.

So we will just have to see what happens- my wildest dream is that, as one post on a stock forum stated, that we end up in a major short squeeze and the stock price will rocket up big time as the long winning shorts suddenly have to scramble to find shares to cover their positions.

Please be advised that this blogger is no mining, or financial expert and has no plans to become one. This blogger is not a registered financial planner or stockbroker. This blogger is long EORBF which may affect his judgment. This blogger advises one to consider his opinions as just that, opinions, and should be taken with a grain of lanthanide dust as with any other talking head's advice. Penny stocks are inherently risky, highly speculative, and you can lose every penny you buy in with.

Morongobill

Disclosure: I am long [[EORBF.PK]].

Per various news reports from trade associations and others that I have come across on the net, in the year 2013 hundreds of Canadian and American junior mining exploration companies will run out of cash and be forced to close their doors. Expenses for these juniors run from office rent to listing fees for the various stock exchanges that they belong to. In their business right now, the primary means to raise money in this tough time for mining concerns, is via the sale of stock equities, usually in the penny stock market, which most large brokerage firms do not get involved with due to more paperwork and hassle.

There are serious projects out there that I have looked at in the last few months, with billion dollar capex needs to get their mines going and share prices languishing in the sub 50 cent range. These projects have inferred and indicated mineral resource estimates, often valued in the billions of $US, and are worth about the price of a cup of coffee and a stale donut if the leaseholder cannot obtain financing for their mine scheme. As I have said here before, resources is a term used legally in the mining financing business to impart the fact that the ore in the ground has no viable economic value- in other words, you are betting that the geologists are spot on with their drilling studies. Reserves, on the other hand, such as what Molycorp has in abundance at its' Mountain Pass facility are a known stored value, like money in the bank.

I recently looked over Quest(QRM stock ticker) up in caribou country in Canada which on the surface sounded really good, until I dug a little deeper and discovered that while the rare earth resource estimate is huge and one of the largest in the world, it is in an area of virtually no infrastructure, requiring a 125 kilometer plus road to be built to the mine site, a port facility to be built, and if my memory is correct, will run entirely on diesel fuel as there is no energy supply there. I had to pass, with banks as tight as bark on a damned tree and a capex of close to a billion dollars, the only way to fund it would be either as a joint venture with a big miner or trying to raise the funds via share sales, further diluting the existing shareholders. Since I have heard of no plans firmed up for the provincial government to bring in the infrastructure nor of any mining major being willing to get involved, I predict the company will just have to go into hibernation and try to ride out the downturn.

So what can these junior miners do? Their executive staffs have money and their time and reputations invested in their particular project, are they just going to shut all that down and get out on the unemployment line with the rest of the working stiffs? Some will, but some may pursue another option, which might be a little more lucrative.

There are folks out there who love to play the penny stock market and are always looking for that small upstart firm that somehow slipped through the cracks and somehow came up on the radar and by getting in early they can ride the shares up as more folks like themselves pile on, and then they dump the shares, hopefully after a five or ten fold share price rise, 5 or 10 bagger in the slang usage, getting out and moving on to the next one.

There are unscrupulous companies out there that cater to these little guy's needs and they will approach the small companies and offer their "pump and dump" service for a fee, often as much as a million and a half dollars US AND shares in the company, and these company's often are successful in what they do. Let me explain that.

Success is defined in the stock promoter being paid upfront and in the insiders at their client company being cashed out, hopefully not taking too large a bath. These promoters often skirt right up to the edge of the law, think 50 shades of gray, and occasionally you
read about one getting their hand slapped by the authorities. When you make millions though and only pay thousands when you finally get caught, does that matter much in the grand scheme of things? The campaigns often last a week or just a day or so, but with so many mullets looking to invest and on their mailing lists, that is all it takes.

There are also very smart day traders of great skill that have found a way to profit handsomely from this market by short selling the securities involved in these pump and dump schemes. In fact, I wish that I had such skills and the financial backing, I would quit my day job, bus driving, in a heartbeat!

But since I lack both of those attributes, I guess I will just settle for having this little blog.

Here is my guess. There are some desperate junior miners out there lacking financing but with significant amounts of time and their personal capital tied up in their deals. They are honest but stuck between a rock and a hard place. Maybe they could even become a statistic themselves, homeless and pushing a shopping cart, loaded down with their pickax and other belongings. These folks will be very susceptible to the promoter's pitch when it comes. Or they may call the company themselves for help.

Either way, the call will not be made with the end result being that funding will be found for their project, that will not happen. The end result will be that the promoter will make a killing, hopefully the junior insiders will cash out a little, and the final holders of the shares will be stuck with illiquid, over priced and overly diluted, worthless stocks. The only exceptions that I can say will be those skilled traders who will make money long by jumping in and out, as well as the shorts who will ride the stock all the way down to the bottom, both making out like bandits!

So you see it is possible to make money in these tough times for rare earth mining investors. It really is.

Pump and dump schemes have been around since the beginning of the stock markets and they exist worldwide. They will always be impossible to root out, due to the human tendency to want to get in on a sure thing.

You can't stop it but you can profit on it, if you are either a skilled trader or if you are willing to overlook a few laws and regulations.

Or if you don't have a conscience.

The writer is not advocating that you get involved in any way with these often illegal stock schemes, nor is he a legal, mining or stock analyst. This article was presented strictly for information or entertainment purposes, and as a warning for investors as to what they might encounter in the rare earth or penny stock investing world. The author does hold a LONG position in EORBF, a penny stock which does not use a promotion company and in the writer's view, is as honest as they come.

Morongobill

Disclosure: I am long [[EORBF.PK]].

I will just do a recitation of the activities by me in regards to this company for now.

First, I read up on the company website, links all provided later down the page, and learned about their Foxtrot Project in Labrador, Canada- a smallish heavy rare earth element play, in an area with excellent infrastructure including deep water harbor access.

I looked further into the NI 43-101 Resource Estimate and almost choked on my coffee when I saw the 494 MILLION DOLLAR CAPEX, which would be virtually impossible for any junior exploration company to raise in this financial environment that they face trying to fund their projects.

The CAPEX was from the unrevised 43-101 from 2011, I had received the email saying otherwise and at that point, I began research to see the exact legal document, which to date, I have not seen, but I will take the company at its' word.

Yesterday I sent an email to the company requesting information on how to get the pdf file in question. No response. Today I tried to make contact with Mr. Jim Clucas, the president of Search Minerals, via phone and left a message. I also sent an email asking for the direct link or if perhaps they could email me the revised 43-101 mentioned in the press release. Again, no response.
(click to enlarge)

Now we will get to the insider buy mentioned in the title of this post. I took another look at the original REN email and rediscovered the insider buy notice regarding more stock being purchased by SERCOR LTD out of Brazil, signed by one of their director's Paulo Carlos de Brito. Who is this guy and what, he could be controlling 43.5% of this company this year? That got my attention big time. Further investigation led to the discovery that he and Sercor were there at the very beginning for Search Minerals, putting in millions through private placements.

Confession is good for the soul and I admit that I was about to pan this stock, even with the lowered CAPEX, especially considering the still ongoing price erosion in the rare earths. But looking at this sentence today instantly got my attention and starting turning my attitude around from bear to bull.

(click to enlarge)

I absolutely almost croaked inhaling my coffee one paragraph further down the page.

(click to enlarge)

By this time, the coffee had finally kicked in and I was off doing research on SERCOR and
Mr. Paulo Carlos de Brito. There really isn't concrete People Magazine like information personally but there are oodles of news items involving him and the company, as it appears that they are huge in Brazil and big in the mining business, acquiring and disposing of companies such as part ownership in a Brazilian mining company, Santa Elina Gold Corporation(on the TSX as SAU) where Sercor evidently pocketed around $124 million. Perhaps lightning will strike twice with Search Minerals?
http://www.thefreelibrary.com/ECHO+BAY+TO+INCREASE+ITS+OWNERSHIP+OF+SANTA+ELINA+TO+50%25-a018176021

Something very big is going on behind the scenes at Search Minerals. I can feel it in my wallet. Believe me, it just gripes my ass that I am all in with EORBF, losing right now, and that my brokerage firm, Options Xpress, does not trade the TSX(Toronto Stock Exchange.) I am pissed, part of that price rise could have been in my pocket right now. Now understand that I am in no way a registered stockbroker nor am I an analyst, but I think this is a red hot screaming BUY with this huge insider purchase of more shares and the chance of acquiring near voting control of the company. It also answers the questions in my mind about where the CAPEX and other funding would come from once all the i's were dotted and the t's crossed down the road.

It is inconceivable to my mind that this kind of big and smart money would be involved with this company from the very start and not realize the potential to the investment. I was wrong just looking at this as so what, another 1.2 million, that won't even come close to paying for the 3rd round of drilling called for in the NI 43-101--- now all is clear in my mind and it should be in yours as well.

Sercor LTD and Mr. Brito have stuck with their Search Minerals investment from the beginning of the company and seen its' value, stock- wise decline, and they have kept doubling down.
(click to enlarge)

I am not inclined to bet against them, how about you?

The links promised have been embedded throughout the article, check them out.

Note: this blogger is no financial or mining expert and has no intention of becoming one. Nor is he registered as a mining or financial analyst. Mining stock plays carry significant risk potential and you can lose every penny. Take what I say with a grain of lanthanide dust just as you would with any other talking head. I do not hold or plan to hold SHCMF or SMY in the next 72 hours, but may in the near term after that.

I am long EORBF, Orbite Aluminae.

Morongobill

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Important information has just been made at sedar.com, the Canadian equivalent to the SEC's Edgar document site. This Consolidated Financial Statement for the year end 12/31/2011 and 2012 was unavailable when I wrote this blog post and I will post screen captures here- please note the precipitous drop in the cash on hand, and keep that in mind as you read this post. Also note the only thing of value to sell would be resource properties:

(click to enlarge)

(click to enlarge)
(click to enlarge)
(click to enlarge)

(click to enlarge)

In a nutshell the cash on hand minus liabilities equals $1,287,092 Canadian. Of this, a second round of drilling would take about a minimum half a million $ Canadian. I base this upon the previous cost and that this will be a more extensive drilling project, the goal being to ascertain the resource potential for possible sale of this Thor parcel.
---- end of late revision to the post------

The name of a joint venture partner or purchaser speculated about the most has been Molycorp but considering their current difficulties financially, I don't see them taking a flyer on this for the near to mid-term time frame, and unfortunately time is something that most junior miners do not have. In this case, Elissa has more cash in the bank than quite a few other juniors, but will it be enough to survive the shakeout of 2013?

Let me tell you what I know. I talked with someone at Elissa last year and was told that there might not be a second round of drilling in 2013 and that it might not happen until 2014. I wrote about this at my previous blog as well. Now the word is that a helicopter aerial survey will commence soon to ascertain more about the THOR Project site and my guess is no matter the results, the company will not be moving quickly to begin the 2nd round of exploratory drilling needed to further define the potential mineral resource; whether due to the lack of cash or a desire to hold tight to the cash that remains, at least not until the market recovers in the rare earths, and lender confidence returns.

From things that I have read, it never was the plan to do the mining themselves; instead the plan was to determine the resource and then sell it to a mining concern(or paraphrasing Paul Mckenzie from an interview last year, marry Molycorp the natural suitor only 16 miles away.) The problem of course with that strategy, most likely thought up during the rare earth boom, and now obvious, is what would happen if Molycorp stumbles? Or if the other giant mining concerns falter? What if your money supply dries up? Can we raise the capital needed to keep the doors open and the stock listed on the exchange?

I am not holding a stock position in Elissa Resources but know that many do. Let me say that if I did own this stock, I would be looking for a way to get out- most likely at a loss with the OTC ELSRF trading at 3 cents today and if I mistimed my move. The company has not been noted for giving out lots of information, just what is required and when, and there is a dearth of information out there about future plans, except for the upcoming helicopter survey, and notably missing is the estimated cost for that operation. The most optimum strategy would probably be to hang on till the results come in and then dump at the right time, praying for an uptick from good news.

With options limited as to what the company can do next, to get the 2nd round of exploratory drilling started to further map out the resource to entice potential suitors, I really don't believe any share price rise based upon good news could be sustained, and the stock would probably fall again under the onslaught from the short sellers- something that I have observed time after time with this stock. Perhaps this really is just a 3 cent stock?

What this bearish time in the rare earth investment world has done is to blow away all the lanthanide dust which had settled over the rare earth enthusiasts and opened their eyes to the realization that in order to bring an expensive rare earth mine into production requires a lot of cash and the banks ain't giving it up to the juniors, period. And with most major mining concerns writing off billions right now and firing ceo's left and right, now is not the time to bank all your hopes of survival on a big rare earth or any other mining concern coming in and funding your pet project.

Barring unforeseen fantastic news coming out right away about someone buying into this project, I see little to be excited about anymore with Elissa and the Thor play. Even if, like Nelson, one turns a blind eye to all the bad news that abounds in the rare earth sector, you just can't get past the cash burn problem and possible delisting ahead for this junior at some point in the future, barring additional capital coming in. Although I guess it would be possible to get by for a couple of years more provided one squeezed every dollar hard enough to make the eagle's eyes pop out of its' head- that would mean stopping after the helicopter survey if results were less than spectacular and going into 9-1-1 mode financially, trying to hold on until the market turned and/ or the banks got less stingy.

My thought is the helicopter survey results may be less than stellar, and stellar will be the requirement for getting funding during this depression like rare earth mine funding period.
That second round of drilling will not be cheap, my guess will be a cost of hundreds of thousands of dollars to get it done.

Having said all this, the stock has had a few run ups and downs recently which represent real money making opportunities for those experienced with penny stock speculation. Please note the intentional non-use of the word investment. This stock in my opinion is not an investment, which implies a certain risk and reward ratio. This stock play is heavily weighted more to the risk side of the equation but I am sure that substantial money can be made by skilled short sellers used to dealing in the thinly traded penny stocks or longs with
money to burn and a little patience.

Regretfully this blogger has no such talents and will settle for advising my readers of this opportunity, to profit or not according to your skill and plain good luck in timing speculative stock plays.

Buy and sell this stock at your peril, is what I am telling you. A 3 cent stock could jump to 10 cents at the blink of an eye and could evaporate just as fast. But with good timing, it can be done even by going long with this stock. But you will not want to buy and hold if you do get in. You will need to watch it and be prepared to bail on the run up, set a goal and get out when you reach it. Remember a penny up or down is a 33% move.
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Note: this blogger is no financial or mining expert and has no intention of becoming one. Nor is he registered as a mining or financial analyst. Mining stock plays carry significant risk potential and you can lose every penny. Take what I say with a grain of lanthanide dust just as you would with any other talking head. I do not hold or plan to hold ELI or ELSRF positions in the next 72 hours.

Morongobill

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.