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  • REE/Strategic Minerals Concentrator, Dec. 9, 2011 [View instapost]
    Hi OG, just getting back to Co. tonight after some engaging meetings in Tx. and I just now noticed the restaurant screen play. Not sure, but it sounds like it could be Nick and Mark Smith having dinner and Engdahl just stepped out to the restroom… Not sure if Mark is married but I'll bet Nick's wife already knows he is smart...

    Seriously, I thoroughly enjoyed the side of beef with Chi, and it just may be that some financially lucrative subjects were resolved, even on the macro level…

    OK, on to important things... While it would appear that the Lynas share price is struggling, while the company itself is flourishing. It would appear that the final gasps of LAMP protesting are emerging from the lips of a 2 headed chicken brought to you by the fair lady Fuziah. Likewise, the protest crowd at the annual shareholders meeting (which essentially doubled when 3 of their ranks finally showed up), is fast becoming a memory...

    The macro environment sucks but the bottom line is that it will get better. The timing of this global slowdown couldn't be better for Lynas. The fact that it is nearly impossible to go to the well for financing of any kind only enhances the prospects for Lynas in the NEAR future. LAMP is 100% capitalized and is presently going through the pre-commissioning process...

    Lynas continues to make substantial progress while much of the competition is stalled… When I look in the rear view mirror, the only thing to see is MolyCorp who has significant problems of their own. Sorry, I just don't see anyone else… ;)
    Dec 17, 2011. 08:55 PM | 4 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Dec. 9, 2011 [View instapost]
    OG, I am just looking at this from a business point of view, specifically as a value investor… I'm not quite sure a bankruptcy is a mischaracterization. Suppose that for just one second, GQD decides that any GWM action is not for them. Then assume there is no other credible JV in the wings, which may be entirely possible… What happens next?

    At best, growth slows down to a crawl on existing development, basically a function of LCM profits. Dependent on the true value of the five million dollar inventory and the additional five mill in accounts receivable, and less than five mill in cash, the future can be measured in months... I'm still searching hard to see the future potential of three quarters of a mine in the rough...
    Dec 16, 2011. 02:20 PM | 3 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Dec. 9, 2011 [View instapost]
    IMO, the major difference is that Lynas has PP&E (Plant, Property and Equipment) on the ground, while there is very little value in terms of hard assets for GWM. Agreed, the (Lyna) Plant pipes and wires have little value in other applications they have great value as REE processing equipment.

    I hate to continually pick on GWM but IMO if I was a suitor looking at "participating" in the GWM adventure I would probably wait for a reorganizational opportunity (i.e. bankruptcy) and acquire the (few) assets of value after shedding the current creditor and shareholder liabilities.

    In other words there is little in terms of GWM PP&E, so taking on SH liability makes bad business sense… JMHO...
    Dec 16, 2011. 12:56 PM | 2 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Dec. 9, 2011 [View instapost]
    Proactive Investors demand article:

    PricewaterhouseCoopers (PwC) sounded an alarm on the impending supply shortage of rare earth metals, which could seriously hit the automotive, chemicals and renewable energy industries.

    According to a survey of executives from 69 manufacturing companies released by PwC, 14 of the 17 rare earth metals that include cerium, dysprosium, fluorspar and beryllium are set to become even scarcer within the next five years.

    Demand for rare earth metals is currently expected to outstrip supply by 30-50,000 tonnes in 2012.

    This shortage is likely to result in a decline in production rate of devices and products such as mobile phones, TVs, military equipment and wind turbines that require rare earth metal made components.
    Dec 9, 2011. 01:16 PM | 5 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    From the Innovative Metals website I am reading that IMC will be constructing a major separation plant to provide SEPARATION services for the juniors (or others) that can't afford to build the expensive circuits for the SREE's of HREE's. They plan on providing this service with the following conditions.

    From the IMC website:

    "IMC has a few key requirements of producers that wish to participate in the IMC Consortium:

    Rare-earth projects under development should have at a minimum, an inferred mineral-resource estimate, per NI-43-101 or JORC guidelines;

    Participants should be well on their way to understanding the metallurgy of their project, and to the development of an initial pilot plant for the deposit;

    Rare-earth concentrates should contain at least 50% total rare-earth oxide equivalent;

    Rare-earth concentrates will need to be free of thorium and other similar contaminants."

    Also, I am wondering what time frame will be to construct such a facility? This could be a great development for the under capitalized juniors like GWM and others.

    IMO it sounds like the facility will provide the same service as LAMP… Comments?
    Dec 7, 2011. 12:21 PM | 3 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    Found this on the IMC website. Interesting concept in an ever complex investing world...

    "In the near future, Innovation Metals Corp. (IMC) plans to introduce its Rare-Earth Investment Certificate™ (REIC™) program, an attractive alternative for investors who are looking for rare-earth opportunities with less risk than the junior-mining sector."
    Dec 7, 2011. 12:31 AM | 4 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    Hi Gareth, glad to see you have recovered from Toronto, once again it was well appreciated...

    I am happy to see you are filling a much need space in this emerging technology and It seems that it would compliment most of the miners coming on line…

    Gloria Rodgers of LYC was asked about Lynas plans to process Heavy and Scarce REE and replied:

    Dear XXXXXXX,

    Thank you for your recent emails. Phase 1 of the LAMP is expected to produce 480 tonnes of unseparated HREE. We will probably sell this product to a toller to separate them out. For such small tonnage it was not deemed economic to build additional separation facilities at the LAMP. The fact is the CLD at Mount Weld does not have a high distribution of HREE so there’s little point in building greenfield separation capacity for these products when we can utilise spare capacity elsewhere.

    Kind regards
    Gloria Rodgers

    Also, do you have any plans to bring Innovation Metals public in the near future?

    Dec 6, 2011. 01:40 PM | 3 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    Very interesting article on the up and coming Innovative Metals, the company co founded by Gareth Hatch:

    "TORONTO, December 5, 2011 – Innovation Metals Corp. (IMC) today announced the initial results of a technical study on the production of separated, high-purity rare-earth oxides (REOs), from a mixed concentrate derived from several mineral types."

    "IMC’s plans to provide end-use consumers of rare earths with the opportunity to own production capacity for the specific rare-earth products that they need, without being locked into fixed prices. IMC also plans to reserve a portion of its future production capacity to assist governments with stockpile programs."

    Not sure if they are in the VC stage but it is worth keeping an eye on it should it go public…
    Dec 6, 2011. 12:16 AM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    Hi Chi, T.B.,

    I guessI need to get into the spirit of the season but I have a hard time sitting back knowing we have a company with $5m in cash and only $10m in semi liquid assets take investors for a ride.

    Over valuing assets (inventory) makes a lot of sense particularly for a company that needs cash. I have to question as to whether there is a true addition to the inventory or this increase is a result of revaluation… Unfortunately the 10q doesn't need to specify this...

    My point is that even if GWM had, say $20m in cash it could not even come close to building a concentration plant at Steenkamp. The infrastructure there is deficient, i.e. no gas for co-generation, unpaved roads, way off the grid, and ground water problems. Also many of the existing buildings are made of radioactive material and unusable...

    This information is from the scoping report, a document many investors have not had the privilege to review. I wish I had someone shared DD like this when I was learning the investing game. (Google Steenkamp Scoping Report)...

    GWM has lofty plans and a good outline for a business plan but it is the real world truth that the barriers of entry are extreme in this space. I use Lynas as a measuring stick because they are the only ones to actually build and are soon to operate a facility… Lynas has spent years and over half a billion dollars to accomplish what GWM plans to do in a couple of years...

    Once again, this is my DD and, of course opinions, that should be shared by no one other than myself. I would encourage anyone to check my sources (I hope I provided all) and make their own decisions based on the fact… OK, as they say in Oz… Cheers!
    Dec 5, 2011. 05:52 PM | 4 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    Agreed T.B., I think there are some positive with GWM and there are a lot more unknowns that may or may not prove to beneficial…

    The thing with inventory is that we don't know how it is priced… If we take a pile of metal valued (by the market) at $2m, then take that exact same pile of metal 3 months later and use the peak price in the last 3 months for pricing, it is very possible that the new pricing could be $5m for the exact same pile of metal…

    This is a cute accounting trick that young companies use to inflate their balance sheet and attract more investors.

    Now, look at accounts receivable which is almost $4m, that leaves actual cash in the bank of ~$5m… I'm not saying there is cause to believe these are doubtful accounts but A/R also counts for 1/3ed of the current assets…

    One other thing to note, and is my pet peeve (for any company), is that GWM claims $2.5m in goodwill…

    I have nothing against GWM, I consider it a good study in investing. I try hard not to be an emotional investor and consider all shared DD I can find. This board is a great resource… That is why I post my opinion and I hope it is taken as just that :)
    Dec 5, 2011. 03:35 PM | 4 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    Hi Chi, I briefly read the recent financial statement for Q3 and it would appear that GWM still has some financial concerns…

    True they had a net profit "EBITA" of ~$750k for the quarter, the 9 month EBITA was ~$1.75m (2011) compared to ~$300k (2010).

    These are OK numbers until you look at the inventory increase which can be interpreted in many different ways, most not good…

    Inventories more than doubled from to ~$2m to ~$5m... Also, of the $15m in current assets (money in the bank), fully 1/3 of those is held in inventory. This raises the question on the price paid for the feedstock and questions as to any hedge in place… $15m is not a significant amount in the bank especially when the $17m plus offering was just completed… IMO, Going to the well again will be very difficult...

    T.B. you are correct in pointing out the GQD is a much larger company that the knife division and the larger company looks like it would benefit from REE feedstocks. Also as you suggested, they are a private company thus specific financials would be difficult to find...

    My question is just how far along the mine / concentration / separation projects are in construction, planning etc. Building concentration and separation facilities is a very expensive and time consuming project.

    Also in looking at the relatively low reserve numbers (opposed to resource numbers) there may be a question about the economics of building such a complex facility in SA.

    In any event I am wondering why we have heard little from DRA. They are apparently the engineering firm of choice and to this point, apparently they have been silent… Of course I may have missed such a report...
    Dec 5, 2011. 02:24 PM | 2 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, Nov. 30, 2011 [View instapost]
    Has anyone heard any more about DRA, the mining company selected to develop concentration / separation facilities for Steenkamp? It would seem that there would be at least some news 6 months into the project.

    "July 27, 2011 - Saskatoon, Canada: Great Western Minerals Group (“GWMG”) is pleased to announce that it has contracted DRA Mineral Projects (Pty) Ltd. (“DRA”) of South Africa, a company with a strong track record of utilizing world class standards, for the detailed design of the Steenkampskraal processing plant."

    Also, I was browsing the web page for the ceramic knife company GQD (potential GWM partner) and noted that annual sales is only $10m. This doesn't sound like a company that will be able to provide any significant cash flow… Are there other suiters?...
    Dec 5, 2011. 12:33 PM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, November 14, 2011 [View instapost]
    Hi Chi, as you pointed out, LCM needs feedstock ideally from Steen but I wonder just how well their quarter will be be if they didn't hedge the feedstock last quarter. The rising REE price had to be a windfall for the Performance Metal guys but it will be interesting to see what happens down the road…

    Here is somewhat ominous guidance from the latest Neo Mat 10q (11-10-2011)…

    “While we continued to benefit from a premium pricing environment during the third quarter... We are seeing selling prices and volumes moderate off recent peak levels.”

    Could be that LCM who is in the same space may hit this soft patch?
    Nov 25, 2011. 01:33 AM | 4 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, November 14, 2011 [View instapost]
    Watching GWM, there were some fingers burned with the PP@$.63, currently trading ~$.53… With Canadian legal lockup of 4 months it could be tough. It looked like a good deal at the time I suppose but now a short position may be a good hedge...


    "The Agents sold an aggregate of 27,240,050 common shares… at a price of $0.63 per share for… proceeds of $17,161,232. Such amount represents the full $15 million Offering plus $2.16 million under the over-allotment option granted to the Agents."

    "The Agents were paid a cash commission of $858,062 in connection with the Offering." Wow, the good news is that Byron is supporting their Cash Cow with a Strong Buy and maintains a sell on Lynas...

    Hmmm…Perhaps a PP Nick?

    With GW's focus shifting to the ovens, it's hard to think that much capital is actually going into Steenkamp… At the end of the day $15m will do little to keep all the plates spinning, i.e. Lynas is spending $65m PER QUARTER focused on just one project.

    Bottom line? Lynas just doesn't have a lot of irons in the fire…
    Nov 23, 2011. 10:11 PM | 6 Likes Like |Link to Comment
  • REE/Strategic Minerals Concentrator, November 14, 2011 [View instapost]
    Looks like we are getting closer every day… Anyone want to guess what the next headwinds will be ? :~)

    Lynas Malaysia Sdn Bhd managing director Datuk Mashal Ahmad said this was the company's immediate concern as the licence would also prove that other allegations against the Lynas Advanced Materials Plant (LAMP) were baseless.

    "Although... there were rumours that Lynas would be granted the pre-operating licence this week, the Atomic Energy Licensing Board has yet to announce this…
    Nov 19, 2011. 12:27 AM | 4 Likes Like |Link to Comment