Best In Rare Earth Class And Undervalued: Tasman Metals

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The Critical Investor
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1. Introduction

For a few months, I noticed increased attention for rare earth junior mining companies after a long period of relative silence. It must have been more than two years since I sold my own, highly speculative, rare earth plays Great Western Minerals and Stans Energy. My IB platform let them go just one day after they spiked on February 8, 2011 when these stocks fell through my trailing 20% stop-loss, which I like to use in a run up for this kind of speculative stocks. Looking back, this day could have been the end of the rare earth elements (REE) hype at that very moment, and the start of a formidable retraction of all mining stocks, as the most speculative stocks usually go down first when confidence starts to seep out of the markets.

TSX Venture, 5-year period

Back then, it didn't matter which rare earth stock was picked, everything that barely mentioned "rare earths" went up 500-1000% within the previous 6 months. This was often based on nothing but some drill results, an inferred resource estimate or some vague promises by companies, driven by expected implications by the Chinese restricting REE exports at that time, sending REE prices through the roof. Very complex issues like metallurgy or cash costs weren't known or regarded at all. It was a time when some overly enthusiastic analyst reports came out, among others estimating targets like $160 for Molycorp (MCP) (back then trading at $50, now at $7.40). These days are long gone now, REE prices have come down 80-90% as China normalized exports, and most REE companies lost 80-95% of their value as a consequence. Since 2011, a distinction slowly arose between light and heavy rare earth minerals as the heavy REEs (HREEs) appeared to be really rare, compared to light REEs (LREEs) which were found in large deposits globally. The LREEs are produced in

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If you got burned in the past at junior mining investments by overly positive newsletter writers, sell side analysts or other (paid) sources which more often than not avoid to mention (hidden) risks or critical flaws, The Critical Investor goes a few steps further, and might provide a fresh, more in-depth, unbiased and critical vision on things, hence the name. For examples of those risks or flaws just think of management overpromising and underdelivering, inactivity, shortfalls in cash, windowdressing, bad trackrecords, negative trends on AISC/cash flows/production grades, depleting reserves without renewal, tricky accounting, bad financing terms, permitting issues, commodity issues like possible equilibrium shifts, too much supply coming online, location issues (climate, local opposition, politics), infrastructure, currency effects, influence of investment groups behind the scenes, project economics not up to standards, companies being overvalued based on important but avoided metrics, etcetcetc. Being an insider of the sector, talking frequently to industry participants (company management, analysts, fund managers, investment bankers, etc), provides for up to standard insights and useful feedback. By analyzing lots of technical reports, analyst reports, economic studies, interviews, articles and other sources, The Critical Investor has developed extensive knowledge about deposits and projects, which often proves to be useful for identifying threats or opportunities.Avid and critical mining and mining related stock investor from Europe. Number cruncher, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long term commodity pricing/market sentiments, and often additional long term deep value.About the Mining For Alpha Subscriber service, part of the Marketplace: This service runs since April 2015, and consumes most of my time dedicated to Seekingalpha. Therefore publishing free content is limited for now. If you want to know more about the junior mining universe, please check out my website: www.criticalinvestor.eu, which contains also my analysis on stocks, lots of hopefully useful rss feeds of blogs and news, and lots of other information. Please consider subscribing on my free newsletter.Disclaimer: I am no certified financial advisor so always do your own due diligence on possible investments.

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