EDITOR: | March 14th, 2014 | 96 Comments

Lynas and Molycorp should go bankrupt

| March 14, 2014 | 96 Comments
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Lifton-InvestorIntelReport-2March 14, 2014 — Jack Lifton spoke on behalf of InvestorIntelReport after a trip to China, Malaysia and Korea on what he calls “the rare earth attitude in China.” In the full report, Jack reveals some thought provoking opinions on what is best for Lynas, Molycorp, where the rare earths market is going and where its most promising developments for the future will occur. As a hint, Jack believes that “Lynas and Molycorp should go bankrupt and the market is backing me up” in order to be picked up by savvier business people and turned into profitable processing operations. Jack speaks about his recent visit to China and Malaysia, where he observed a continued and intense interest in the rare earth industry. He also noted that there is a slow but definite rare earth space developing in South America and Brazil in particular. This has been so intense that even China has taken notice, fearing that their next big competitor in the rare earth space will be Brazil. Jack sees North America as reacting to the market rather than leading it; still, he identifies a few rare earth companies that have been moving closer to reaching production stage in North America.

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Jack Lifton

Editor:

Jack Lifton is the Sr. Editor for InvestorIntel Corp. and is the CEO for Jack Lifton, LLC. He is also a consultant, author, and lecturer ... <Read more about Jack Lifton>


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Comments

  • Tim Ainsworth

    Jack, that little commercial snippet says it all, you ain’t in touch with the new paradigm, irrespective of air miles.

    March 14, 2014 - 11:20 AM

    • Tim Ainsworth

      Unfortunately I’m not at liberty to expand on that, but suffice to say the basic premise is ludicrous, and will become quite apparent in the not too distant future..

      March 14, 2014 - 11:25 AM

      • Michael Roat

        I agree. Production from Molycorp and or Lynas is a necessity for the industry to survive. Without new non-Chinese supply there would be a huge rest of world deficit of light rare earths and there would be a repeat of 2011. The industry is at the very bottom of a massive destocking cycle and is turning as I type this. Domestic Chinese prices have already begun to increase, which lead FOB prices. Japanese demand will pick up at the end of March due to reluctance to restock until the end of their fiscal year. The Chinese State Reserve purchase could occur at any time within the next few months.
        There were some interesting details in Molycorp’s conference call. For one, the statement that the ramp up in production is demand dependent, which means Molycorp is planning to basically lag the market and push for higher prices. Mountain Pass can run at higher levels than it is currently. There’s no sense in producing at ful capacity given the current demand situation. Baotou certainly is not. Volumes and transactions are very low due to uncertainty relating to price direction. When it becomes, I suppose, more glaringly obvious that prices are increasing, the market will turn. The second bit of information was CEO, Geoff Bedford, referring to Molycorp’s neodymium production as their “own” indicating a shortage. Lastly, the comment that prices can “do a lot of things in the short term” and many mentions of price volatility in their annual SEC filing. I see a pickup in demand and a recovery in prices over the course of 2014 as a virtual certainty. Be greedy when others are fearful, even if those others are “in the know”.

        March 14, 2014 - 1:53 PM

        • Michael Roat

          Also, reductions in rare earth usage and substitution has reached its maximum effect. There is now a shift back to increased consumption of rare earths, which is very positive for demand,

          March 14, 2014 - 2:12 PM

    • Jack Lifton

      Tim,

      I have no idea what you’re talking about. Not a clue.

      If you mean my offer to “buy” a Chinese HREE separation plant then I apologize for not being clear. I was making the point to the Chinese audience that their overcapacity could be helped by “free trade.” They understood exactly what I was saying. I’ve just finished a piece on this for the IIR subscriber site.
      I wouldn’t dream of actually buying a Chinese company or investing in one under the current economic control system in place there.

      Jack

      March 14, 2014 - 2:28 PM

  • Dan

    Tim, to those of us long term lyc holders; any chance you can expand on your comment? After listening to this video I am standing in front of a bottle of scotch and a revolver wondering which one to empty.

    March 14, 2014 - 11:32 AM

    • Sonny

      lol… I’m in the same situation as you 🙂

      March 25, 2014 - 5:43 AM

  • joe schmoe

    Once upon a time, Jack thought Great Western was the best thing the invention of the wheel, so just believe in yourself and let the paid talking heads convince the suckers.

    March 14, 2014 - 4:10 PM

  • Joe

    If one studies all of Jack’s commentaries over the years, with all the contradictions, incorrect predictions, backing of companies only which can financially benefit him, complex nebulous verbosity with variable interpretability, it is difficult for one to understand why people care what he has to say. Am debating whether his predictions should be regarded as equivalent to chance or actually negative predictors.

    March 14, 2014 - 6:43 PM

    • Jack Lifton

      Joe,

      To paraphrase Macauley’s Lays of Ancient Rome from his “Horatius at the Bridge” let me say that:

      Then out spake the brave investor,
      The Captain of his fate;
      To every man with puts or calls
      Loss cometh soon or late
      And how can he face it better
      Than ignoring fearful facts
      To the risk of his capital
      From managerial bad acts

      March 14, 2014 - 7:27 PM

      • Veritas Bob

        As for managerial bad acts, it was a previous management, but I still remember Rare Element Resources putting out PRs bragging about all the gold in its less than 1/2 gram/ton “gold mine”. That did not imbue me with confidence with regard to claims that management was making about rare earths.

        March 14, 2014 - 7:46 PM

        • Tracy Weslosky

          VB I had to delete 2 of your comments as they did not reflect the content of this video. If you would like to comment on the full interview on InvestorIntelReport to which you must be a member, please do so there. All disclaimers have been made.

          March 15, 2014 - 4:16 PM

          • Veritas Bob

            My comments yesterday related to a portion of the full video which is not shown on this page. I clicked the link on this page, and somewhat to my surprise, up popped the full video, which I played. When I tried to replay it today, it indicated a subscription was required. So don’t blame me if availability of the full video was a mistake.

            I suppose that by putting Jack’s remarks which might offend many corporate site sponsors behind a paywall, the only companies left to be offended by the publicly available piece are Molycorp, which was never a sponsor, and Lynas, which no longer is. If you want to blame someone, blame Jack for putting out such a piece, or you/your editorial staff for allowing it to be posted. Claiming that questions raised as a result of the full video don’t have to be answered (and the questions expunged) because they relate to the full video, which WAS publicly posted, even if such public posting turns out to have been in error, seems to be a cop out and beneath the publisher/editor of a high end site – in my personal opinion.

            Please feel free to delete this post and ban me from the site if my truthful, but in my opinion, respectful commentary is too hot to handle. But then again, perhaps you should ban Jack Lifton as well, as his stated opinions can displease paying sponsors. However, if the site is purged of critical and controversial content and commentary (whether through formal censorship or self-censorship), it will become little more than an advertorial (i.e., infomercial) website, and as such, paying sponsors might not continue to see value after some time.

            March 15, 2014 - 7:50 PM

          • Tracy Weslosky

            Good morning VB.

            Last month we had 9.6 million hits, and I am starting to suspect that you are responsible for at least 1.5 as you seem to be more on this site than I am.

            This said, I would like to dismantle your efforts to tarnish my reputation as an accredited media outlet or I will ban you. Are we clear?

            For starters, we do not determine our content based on who are my members are. Last week we wrote a relevant and timely piece on Lynas that I perceived to be very optimistic. If you recall, we did an interview with Eric less than 90 days ago, which I deem to still be current. Personally, I believe that a lot of money is at stake here for both projects, and when this kind of investment made — usually the talent to make it work follows.

            You should be thanking me for posting such strong opinions and to claim that I do not have critical and controversial content is positively laughable. I guess you didn’t read Jon Hykawy’s piece on uranium? Or what about Chris Ecclestone’s take on lithium? These are examples of some of my nearly 2 dozen writers with a wide spectrum of view points, many of which are not reflective of my own.

            I have dared you to pen a piece before but you cannot even sign your comments with your real name. You will note that I do.

            Have a nice day, and do me a favor – try being positive for 1 day of your life and see how it works out for you.

            March 16, 2014 - 9:25 AM

  • Michael Corden

    I really object to use of good poems to make trite statements.

    As explained in Wikipedia, the poem, Horatius, describes how Publius Horatius and two companions, Spurius Lartius and Titus Herminius, held the Sublician bridge against the Etruscan army of Lars Porsena, King of Clusium. The three heroes are willing to die in order to prevent the enemy from crossing the bridge, and sacking an otherwise ill-defended Rome. While the trio close with the front ranks of the Etruscans, the Romans hurriedly work to demolish the bridge, leaving their enemies on the wrong side of the swollen Tiber.[3]

    This poem contains the often-quoted lines:

    Then out spake brave Horatius,
    The Captain of the Gate:
    “To every man upon this earth
    Death cometh soon or late.
    And how can man die better
    Than facing fearful odds,
    For the ashes of his fathers,
    And the temples of his Gods.”[4]

    Lartius and Herminius regain the Roman side before the bridge falls, but Horatius is stranded, and jumps into the river still wearing his full armor. Macaulay writes,

    And when above the surges
    They saw his crest appear,
    All Rome sent forth a rapturous cry,
    And even the ranks of Tuscany
    Could scarce forebear to cheer.

    He reaches the Roman shore, is rewarded, and his act of bravery earns him mythic status:

    With weeping and with laughter
    Still is the story told,
    How well Horatius kept the bridge
    In the brave days of old.

    March 14, 2014 - 7:55 PM

    • Jack Lifton

      Michael,

      I admire your erudition, but I don’t apologize other than to Macauley for using his wonderful lines as a pattern for a limerick.
      Many of the comments to this essay are filled with logical fallacies driven by emotion, and as such they are not to be answered with logic. I understand the hurt feelings of those who bought Molycorp or Lynas at 2011 evaluations, but I am at best a messenger not the message.

      Jack

      March 14, 2014 - 9:12 PM

      • SteauaOilers

        Jack, with all due respect, you are intentionally avoiding one important point.

        Namely, people like Veritas Bob (see post from 12:48pm) and many others fail to fully understand what is the substantive justification behind your endorsement of the companies from your “survivors list”.

        Please correct me if I am wrong, but the opposite was true with your 2011 endorsement of Great Western Minerals. At the time you went to great lengths to explain the competitive advantage that GWM appeared to have. Only to stop talking about it all together in December 2012.

        So, am I wrong in having the impression that you don’t want to provide justification anymore for: any of your endorsements (“survivor list”) or why you became sour on former endorsements (GWM)? If that is the case, maybe it’s better to stop talking every couple of months about “survivor lists”. I understand that it generates ratings etc., but it looks more or less pointless. To me anyway, unless I am guilty of one of those logical fallacies that you mention above.

        March 14, 2014 - 10:15 PM

        • Jack Lifton

          “Survivors” are not necessarily immortal. The term means those who are still OBJECTIVELY in the game and who I think will remain in the game. Survivors are not necessarily winners. There are many reasons for juniors to fail. Most in fact do fail. The metric that I most rely on is my evaluation of the skill of the operating managers, which skill set is the great leveler.

          March 14, 2014 - 10:27 PM

        • Tracy Weslosky

          There is no survivor list published on the above and therefore no one has to respond to this comment.

          March 15, 2014 - 4:17 PM

  • Jake

    Jack,
    Are you still excluding Great Western from your ROW calculus? They still remain the “right size” as you had previously said…. However, we shareholders are waiting to see if the have the “right management” to get things moving again. There should be news soon (feasibility study with financing (hopefully) to follow ) which may shed light on the company’s future.

    Best wishes–
    Jake

    March 14, 2014 - 9:45 PM

    • Jack Lifton

      Jake,
      Great Western had what I thought was a great business model. I do not believe that model is any longer being followed, and I don’t know, or see, why. It is as simple as that.
      Jack

      March 14, 2014 - 10:29 PM

      • Joe

        Jack,

        It is challenging to get a grip on your words despite your claim that “it is as simple as that.” Could you please elucidate exactly what GWG’s previous “great business model” was, and what you believe the current business model is, so that one might have a better idea of why you believe the previous model is no longer being followed? Thanks in advance.

        March 14, 2014 - 11:06 PM

        • Joe

          Just as I thought, nothing but slippery words.

          March 16, 2014 - 6:09 PM

  • Chris

    Mr Lifton, your opinions on Lynas today are certainly in stark contrast to your opinions only a few months ago. So what has changed over the last few months to warrant such a drastic change of opinion?

    Jack Lifton: “2014 — a great year for rare earth prices.”

    Comments by Mr Lifton:
    “By “trans-Pacific” I mean Lynas.
    It really seems to me that:
    1. Lynas is so much less encumbered than Molycorp in both debt and only, at best, symbolic time and cash draining acquisitions, and that
    2. Lynas executive and technical management is more professional, and that
    3. Lynas reacts to the market rather than trying to control it.
    Molycorp could still make a comeback, but I believe that it needs, more than anything else, to slim down severely and sharpen its focus. Its past corporate eyes were much larger than its corporate stomach. Constantine Karyannoupoulos and Eric Noyrez are probably among the most successful,in the recent past, managers in the non-Chinese rare earth space. They tower above most of their North American and Australian “competitors.” In any case I think that just one of them will wind up as successful in, at most, the next 24 months.

    I just think that Lynas has less obstacles to overcome as a volume supplier of LREE products. And i believe that Lynas will anchor a profitable total rare earth supply chain outside of China by the end of 2016.

    March 14, 2014 - 9:49 PM

    • Jack Lifton

      Chris,

      I hope you’re right, but I don’t think the Australian capital markets are any longer supportive of Lynas, so I think, and hope, it will be restructured through what is known in the USA as a voluntary bankruptcy, because, if not, it will no longer be able to be financed. It has a first class LREE separation facility in Malaysia; it has a top-notch CEO, Eric Noyrez, but it does not have the confidence of the market. I’m suggesting bankruptcy to save it not to liquidate it, but I note that, notwithstanding the commentary here tonight, the LREE supply market is in overcapacity, so that the survival of either Lynas or Molycorp is up-in-the-air. I am betting that, as presently constituted, neither will continue operations beyond the end of next year.
      Lynas in fact has a good plan to be the anchor of a total rare earth supply chain outside of China but that plan will depend on Chinese technology and financing. I think that for Lynas to be successful it cannot be under the same ownership structure as today.

      Jack

      March 14, 2014 - 10:40 PM

      • Robin Bromby

        Jack, the system here is a little different. Companies can go into voluntary administration, which means that the administrator (usually from one of the insolvency specialist firms) will try and do what you suggest. Sometimes this works, other times not. One firm’s website offers this definition:

        “The Voluntary Administration or VA as it is often referred to, provides sufficient protection and flexibility to restructure a business with the view to save as much of the company’s business as possible and achieve a better outcome for the company, its creditors and shareholders than would occur if the company entered directly into liquidation.”

        VA is initiated by the directors.

        Then there is receivership, which is where the receiver (from the same sort of company, but with different responsibilities) is there to dismember the corporate corpse and redeem anything possible for the creditors, etc. Liquidation in other words.

        Receivers are usually appointed by secured creditors.

        March 15, 2014 - 12:29 AM

      • Mathias

        Jack,

        if I get it right, you claim that Lynas atm does not have the technology and the money to be successful.

        Not only that the above sentences put your earlier assumptions in question.

        But you seem to think that the chinese are the only solution – technically and moneywise.

        Well, Lynas is actually producing. Is it not? They have teething problems, okay. They were not expected to last for such a long time but now they are on the verge of beeing solved. And they can sell their product for a sustainable price (once the teething problems are solved). Phase 1 could be completely already sold, isn´t it. The team at the LAMP is very skilled, even the chines were respectful as you have also written earlier.

        Moneywise: Do you think – let´s say another capital injection of approx. 50 mio – is out of sight to get? To keep things running to full production of phase 1 at least? It´s not that much, 50 mios just around 10 % of the market capitalization.

        That´s just my opinion: I believe, the whole sector lacks investor confidence not just Lynas or Molycorp.

        March 18, 2014 - 4:48 AM

  • SteauaOilers

    Jack, thank you for answering my previous post.

    Would you care to share your opinion about the Geomega process? I am sure that you have an opinion about it, and a very strong one 🙂

    March 14, 2014 - 10:53 PM

    • Jack Lifton

      I believe that the “Geomega process” is a type of chromatography, and I’m sure, if it is, that it works in the laboratory, but in order to consider a process for mass production it must be proven to work at the required scale by the construction of a pilot plant that can process efficiently and economically at least 1% of the projected volume. Has Geomega demonstrated that capability and capacity??
      In my working lifetime chemical science has grown dramatically and has split into many many specialties. It is important when talking about chemical process engineering scale-up to talk to specialists in that discipline.
      I would urge Geomega to get a credible independent third party chemical engineering firm to build a pilot plant and verify the scale-up and the scale-up economics of their process.
      Jack

      March 15, 2014 - 12:20 AM

  • Michael Roat

    Any information on the 2014 production quotas that were released today/yesterday?

    March 15, 2014 - 2:05 AM

  • vacuum

    Bot Texas because Texans are twice as smart as Yankees, despite media attempts to say otherwise. And also because of its chart. I like investing in those sideways channels, the more months the better. When/if the stock pops, I can liquidate a portion of the position and hold onto the investment for free. I also like its location, proximate to Iowa, where there’s US research institute focused on strategic elements. NB.v I bot for the same reason. Now, TAS I bot because it is in the birthplace of some of the elements on the periodic table that are today called rare earths.

    I never touch Lynas because it begs a r/split; and they should have done it in 2013 when a lot of Venture miners had the sense to do it as it was then a bear market in mining and everyone would understand. Furthermore, I noticed that people who own Lynas tend to be obstreperously prideful, married to the stock–not saying this because of commentators here, but elsewhere I have noticed the cultlike nature of its devotees. Whenever a stock has that kind of following, it is a great temptation for the company to disabuse them. Molycorp I have been in and out of because it is an easily tradeable NYSE stock with a big following who will happily take the empty popcorn bag when I want to exit. When Molycorp gobbled up Neomaterials, what appeared to be a cutting edge company, and oblivion followed, something told me that Molycorp is not something I want to invest, but only trade.

    Anyone who thinks Jack is writing in stone, e.g., as regards Great Western, needs to have their head examined. All analyst opinions have a context which is time dependent. Circumstances change in time for better or worse. So, one has to be flexible and adapt. Too many people want to have an analyst give them magic words, e.g., “open sesame”. However, all one has to do is read Napoleon Hill’s famous book in order to realize one must oneself take total accountability for one’s success or lack thereof.

    March 15, 2014 - 2:16 AM

    • Jim

      Vacuum,
      Have you looked at Lynas’ cache of critical rare earths? I believe they have the most of any miner out there. Gareth Hatch’s Technology Metals had a report awhile back that featured critical metals, and Lynas was in the top 3.

      March 15, 2014 - 2:16 PM

      • vacuum

        Well, the Australian Northern Minerals and Hastings are top of someone’s list for valuable dirt. But the shares are pigs. Always wide spread on the US pinksheet.

        My point is that Lynas has a lot of shares. And they should have r/split last year. So, perhaps the Company is good with the dirt, but the finance department is not strategic.

        March 16, 2014 - 10:50 PM

  • Steve Davies

    LOL Jack just because your mates Jim and Gary left GWG doesn’t mean the grade of the mine has changed or LCM is mot a world beating alloy manufacturer are you saying Marc doesn’t know what he is doing .
    You say the metric that is the most important is the skill of the managers so grade , distribution, processing,and infrastructure are secondary I think you can’t argue your case for your chosen survivors on previouse metrics you used so you have switched to operational management as your chosen metric.

    March 15, 2014 - 7:32 AM

    • Jack Lifton

      Steve,

      You and the analyst, Mickey Fulp, would be in complete agreement, although he is no longer covering the rare earth “space.” His mantra is “weight and grade,” or as John Kaiser likes to say “pounds in the ground.”
      With regard to gold for which extraction procedures are well-known and the refining of which is very well known and the value of which is set by a transparent market this is correct.
      For technology metals such as the rare earths this argument fails. The metric can be described thus:
      Can I while always maintaining overall profitability at CURRENT PRICES:
      1. Extract the desired metal values efficiently from the ore body in , and
      2. Purify (and in the case of rare earths first separate) them and convert them into a commercially acceptable or customer specified form, and
      3. Is there (NOT WILL THERE BE) a free market for the products of 2 above, which has capacity to absorb my products at a price at which I can make a profit?

      The job of the manager of an exploration company is to just find “deposits.” If he does not know the details of the valuation metric above, and, if, as has been all too common, he applies only the Fulp Formula, weight and grade, then deposits may be put into development that can never be economical.
      The real problem is one of emotion and human behavior. You cannot move a deposit, so if its not economical with PRESENT technologies then it should be ABANDONED or just “INVENTORIED.” But so many juniors have proceeded to develop dead-ends that the whole “space” has become devalued.
      I have been fooled not so much by weight and grade arguments but by appeals to magical processes that will easily solve, bypass, or even eliminate problems, and by promises that the radioactive nucleide issues are solvable legally as well as technically.
      I choose to support managers who follow the above guidelines.
      We are now at the end game in the rare earth space-early 21st century version. It is now process technologies that will be efficient, and economical, while satisfying legal and political issues that make the difference to becoming a rare earth supplier.
      As always in human endeavor the market will ultimately choose the survivors from the lowest cost, most efficient, producers of those products the markets desire.

      March 15, 2014 - 9:53 AM

    • Tracy Weslosky

      Steve. I am stepping and calling a foul here on the play (football metaphors). Jim and Gary I know well enough to be able to confirm I was the one who informed Jack of STAR Resources in the last 2 weeks. If there was some kind of friendship inspiring Jack’s reality, which knowing Jack I can assure you that his opinion is not swayed by friendship — he would have been aware of STAR. Let me add, I have repeatedly asked Marc Levier of GWMG to contact Jack to provide him with an update on GWMG. Marc wrote me a few days ago as I wanted him to know that Jon Hykawy is going to be a guest columnist and I do not want to speak out of turn here, as all of our columnists have firmly shown that they can handle their own opinions without mine — but he did tell me that he quite likes the GWMG story and I suspect that he will write this when he deems it timely.

      I plan on writing Marc a follow-up email today as I have a pile up of emails to manage and will reiterate my interest in Marc updating Jack. Now let’s step away from spreading conjecture and speak with the intelligence that I know based on your previous comments you possess.

      March 16, 2014 - 9:44 AM

      • Steve Davies

        Tracy I have the upmost respect for Jim and especially Gary who was first to come up with phrase mine to metals , I must say its the first time I have been booked by the ref.

        March 16, 2014 - 12:27 PM

      • Tek

        Why would/should Marc Levier provide an update to anyone outside the standard Press Releases that are official? Providing updates by email or other means would amount to inside info.

        March 16, 2014 - 8:15 PM

  • Joe

    Jack,

    It is challenging to get a grip on your words despite your claim that “it is as simple as that.” Could you please elucidate exactly what GWG’s previous “great business model” was, and what you believe the current business model is, so that one might have a better idea of why you believe the previous model is no longer being followed? Thanks in advance.

    March 15, 2014 - 8:39 AM

  • David Mortimer

    I don’t know how people can criticize a man with so much experience in the REE market , he’s not trying to sabotage these companies but he’s telling it as it is .
    Reality hurts sometimes.

    March 15, 2014 - 8:49 AM

    • Steve Davies

      Thanks for the response jack I also did mention the importance of processing and infrastructure in my post but these are not my metrics but yours from previouse articals.
      Let’s look at one of the companies you represent Texas rare earths I seem to remember that 2 of the present directors where sited for giving false information at presentations in the past they are not the type of management I would like to be associated with or invests in.

      March 15, 2014 - 11:04 AM

      • Jack Lifton

        I have spent quite a bit of time lately with the TRER board, and I have never met a more ethical group. In addition I can tell you that the mining and geology savvy of this group is outstanding. I actually don’t know what situations to which you refer, but if making mistakes or puffing is a crime then no one is innocent.
        I think you are referring to a dust-up of which I have heard only snippets that was between a previous CEO and the current management. I have never met that person, or discussed the situation with either side, so I am not qualified to comment other than as above.

        March 15, 2014 - 12:13 PM

        • Steve Davies

          Jack look at the news release june13 th 2012 from Texas rare earths entitled findings of internal review speaks for itself.

          March 15, 2014 - 12:40 PM

          • value1

            Actually it doesn’t speak for itself, at all. Read the prec14a filed on 7/5/12 to better understand the context. Without question there was a tremendously antagonistic board split that had been boiling over for a long time over how to develop the resource correctly for shareholders and a power struggle for control ensued and in the process as happens too often in similar struggles for power and control a lot of people on both sides were imo unconscionably smeared. Contrast the first and the revised pea’s and I think its clear that the current board had the better sense of how to best develop the resource in light of the macro economics now surrounding rare earths. The current board, perhaps, in response to the earlier disagreements has also seemed to be meticulous in using outside consultants and labs to verify their work. It is the revised pea and the tremendously long life potential for this low cost mine that gets too little attention imo.

            March 15, 2014 - 2:03 PM

          • Steve Davies

            Value 1 so what you are saying is that the news release on the 13 th of June 2012 was factually incorrect when it says that 2 current board members massively overstated the total resource value at investor presentations.

            March 15, 2014 - 3:32 PM

  • value 1

    As I suggested, if you read the prec14a carefully, I think its illuminating. This extremely unfortunate episode, whose fallout damaged many, was a by product of a truly nasty board power struggle. The pea and the revised pea by gustavson with input from other highly reputable outside firms and consultants have answered the question and make independently clear the npv of round top even while based on only a small percentage of the property trer has. The potential for an important and massive heavy rare earth source in the continental U.S. is important and I think its precisely why its captured Liftons focus.

    March 15, 2014 - 7:16 PM

    • Steve Davies

      Value1 with greatest respect the news announcement you refer to is before the 13 th of june 3013 so is irelevent.

      March 15, 2014 - 8:21 PM

      • Value1

        Actually, Steve, and with the greatest of respect back to you, the One and only thing that is relevant and matters is what is Round Top worth at todays prices for rare earths.

        Page 9 of the PEA prepared by Gustavson: “Table 1-5 shows a projected pre-tax 10% net present value (NPV) of $1.47 billion…Estimated total pre-tax cash flow at full production is $4.35 billion.”

        March 15, 2014 - 8:57 PM

        • Steve Davies

          How many tons of dirt do you have to process to get to that NPV

          March 15, 2014 - 9:54 PM

  • bourque

    Now why would m. LeVier give any information to J. Lifton from trer. a competitor. Why would any other company give J. Lifton any information for the same reason. A loss of objectivity I’d say.

    March 16, 2014 - 1:15 PM

    • Tracy Weslosky

      I believe that in lieu of Jack’s role in speaking around the world to the French Assembly and the Malaysian government for instance that he should be updated regularly by all of the market leaders.

      March 16, 2014 - 3:16 PM

      • Joe

        It is a travesty that Marc has neglected his duty of reporting to Jack, especially when GWG has so much to gain by it. BTW, I think you meant “in light of..”

        March 16, 2014 - 5:56 PM

        • Tracy Weslosky

          Sarcasm is a sign of an excellent writer…and we need a good editor. Please apply.

          March 17, 2014 - 7:17 AM

          • Joe

            Would love to apply. What do I send and to what address? Can I call you to discuss?

            March 17, 2014 - 7:52 AM

        • Tracy Weslosky

          Forgive me — missed your note…send to Sue@InvestorIntel.com and we will follow-up. Think 2 people won a free 3-month membership for excellent commentary. Thank you.

          March 18, 2014 - 8:09 PM

  • Shelby

    Jack,

    Are you saying that Rare Earth’s are declining so to speak? What about the junior market? You talk about Great Western, but what are your thoughts on Commerce?

    Thanks in advance,
    Shelby

    March 16, 2014 - 2:54 PM

    • Tracy Weslosky

      Shelby. Jack does NOT talk about GWMG in this 2 minute promo. If you want to hear his 14+ minute opinion, it is accessible via InvestorIntelReport.com. For the record he does not discuss GWMG there either. His presentation on the perspective French is also included in the membership — which is a nearly 18 minute long presentation.

      March 16, 2014 - 3:17 PM

  • Tracy Weslosky

    Thank you for reassuring me that every algorithm has a deviation at times. Since Luisa brings out the gentleman in you, I shall immediately call her tomorrow and schedule a follow-up. Let me add, try not to tear what you perceive my business model to shreds to bait and hook me. No one enjoys being bullied or manipulated into setting you straight.

    March 16, 2014 - 5:05 PM

  • jakeslicks

    With all due respect, I can’t imagine any reason why Mark Levier would spend a moment of his time updating Jack Lifton.

    March 16, 2014 - 5:37 PM

    • Joe

      Could not agree more

      March 16, 2014 - 5:45 PM

      • Tracy Weslosky

        Everyone in our industry sector needs to talk to each other if we are going to create a rare earth supply chain in NA.

        March 16, 2014 - 5:57 PM

        • Joe

          Maybe some NA RE industry leaders should talk to each other, that is true. Not sure how it follows from that premise that Marc needs to update Jack.

          March 16, 2014 - 6:36 PM

        • Tim Ainsworth

          Hardly going to “create a rare earth supply chain” by spruiking fears of bankruptcy to long suffering shareholders supporting the only two near term opportunities Tracy.

          March 16, 2014 - 8:51 PM

          • Tracy Weslosky

            Tim. I have repeatedly extended positive news on Molycorp and Lynas (just last week). See the piece I wrote yesterday: Bitcoins are dead, Rare Earths are ‘alive’ and FDIC vs. Libor to re-build trust for the ‘little people’? http://shar.es/RKzla — you may be surprised at MY opinion…

            Having heard ALL of Jack’s video several times — he states that the rare earth sector is indeed alive. Why he cannot comment on the undeniable debt from substantial financing at the top of the market is his right as a writer — is beyond me.

            Tim – you write good commentary and I have extended the option for you to submit a piece to me on multiple occasions. Love to hear your perspective but slapping my wrist for sharing real opinions from respected members of our industry is also destructive.

            The FACT is that the Malaysian and French government both flew Jack to meet with them to provide insight on the industry — they did not fly you or me there, so let’s not beat the Publisher.

            Good debate though….and food for thought for all of us.

            March 17, 2014 - 7:11 AM

          • Tim Ainsworth

            Very little point in writing Tracy when factual posts that don’t suit you are so quickly sanitised.
            Slippery slope to loss of credibility I’m afraid.

            March 17, 2014 - 12:07 PM

    • hackenzac

      It’s called promotion. Business 101 says that failure to aggressively market is a major reason why business fails so keeping your story in front of influential analysts, assuming that your story is a good one, seems like a good idea. Instead Great Western pulls their sponsorship on an important promotional site like this when they don’t like a story teller like Vince Mora rearing up showing what happens when your CEO is an engineer and not a business man. People on the other hand may denigrate a guy like Jim McKenzie of Ucore because he has a telcom background but entrepreneurs are the guys who get it done and it takes some schmooze to do it. For Great Western, what we have heuh is a failuuure to communicate. You get a free subscription to InvestorIntel if you can identify that quote.

      March 16, 2014 - 7:21 PM

      • Joe

        GNR song “Civil War” 🙂

        March 16, 2014 - 9:24 PM

      • Lou

        “Cool Hand Luke” Direct free subscription to loupear11@live.com

        March 16, 2014 - 11:59 PM

      • Tracy Weslosky

        Dear Hackenzac.

        Marc and I communicated in the last 72 hours as he is pleased that Jon Hykawy will be doing a column on InvestorIntel. Should he be a member? Obviously I think so, but this is because I do believe more marketing is a good thing and not everyone subscribes to my vision. GWMG has been a member for many years and I do believe that they will return.

        As for giving away $250 memberships on my behalf — please talk to Sue@InvestorIntel.com as she is in charge of marketing the InvestorIntelReport. Obviously we like PR and marketing, so email her.

        Now as a final note — I would like to reinforce the points made earlier on this site; which is that we are a news media outlet and we publish and write articles on all critical news and industry matters to the best of our abilities.

        Thanks for visiting InvestorIntel — 😉

        March 17, 2014 - 7:05 AM

        • Tracy Weslosky

          Sue – please give Lou a free 3-month membership if he divulges his full name to you for having the courage to post his real email and use what appears to be his real name. If “hack” can cough up his — we will do the same for him…

          March 17, 2014 - 7:21 AM

          • hackenzac

            I knew you were good for it Tracy and of course I can cough up my name. Thanks! My name is Zac. Great to meet you Tracy if that is in fact your real name.

            March 17, 2014 - 6:02 PM

          • Lou

            Thank you Zac. The line from “Cool Hand Luke” is indeed a classic. I can see why one poster thought of Jack Nicholson in the diner scene from “Five Easy Pieces” minus telling the waitress to put the tuna sandwich between her knees. That one will live in infamy too.

            March 18, 2014 - 11:09 AM

    • Tek

      Jack Lifton could well be on speaking assignments with whomever, but Marc Levier or any other company official should not be updating him nor anyone else outside of official press releases. Doing so would be giving out insider info.

      March 16, 2014 - 8:20 PM

      • Tracy Weslosky

        Tek. This is incorrect. CEOs do road tours and update media on a regular basis to insure that their news releases are understood. Insider information occurs when date is exchanged that is material that has not been put out in a news release.

        Please read my commentary for the week, which touches on some of this debate here: Bitcoins are dead, Rare Earths are ‘alive’ and FDIC vs. Libor to re-build trust for the ‘little people’? http://shar.es/RKzla

        March 17, 2014 - 7:00 AM

      • tek

        Tek ,

        How is it you’re using the same screen name as me? Please use another name.

        March 18, 2014 - 10:06 AM

  • Jack Lifton

    Some of the comments here show an extreme lack of sensitivity for the term, competitor. Companies that don’t produce anything are not competitors in the marketplace. Many companies ask me for an opinion on their business model. I answer to the best of my knowledge based on information publicly available. I do not ever tell one company what another one is doing nor reveal anything told to me in confidence.. Neither do Jon Hykawy or Luisa Moreno. That’s why our judgements and analyses are respected. This operating model is called the ethical one for those of you who might need to look it up.

    March 16, 2014 - 6:25 PM

    • Jake

      Jack,
      Thanks for putting up with all the bs. Why you do, I do not know but thanks for sticking around to answer questions, etc.
      After reading your last comment, I thought to myself “gee, at least Great Western makes something”. 😉
      I do recall your having doubts about Lynas and Moly years ago so I am not sure why all the hoopla.
      As far as your comment that GW s business model changed… Not sure I see that. They still are trying to get SKK open etc. The things that I see have changed is management’s not rushing to open the SX plant (which you yourself said those who haven’t opened ones hold off doing so due to new ideas coming on board). They need money and the upcoming feasibility study should shed more light on the situation. Long ago, you predicted they would be in the top three to market and I still hope you are correct. Looking forward to want you and Hykawy have to say.
      Thanks..
      Jake

      March 16, 2014 - 6:50 PM

  • bugrudy

    Jack Nicholson—–“Five Easy Iieces”

    March 16, 2014 - 7:59 PM

  • bugrudy

    Jack Nickelson? “Five Easy Pieces” sorry for the bad spelling in the first post hackena zac

    March 16, 2014 - 8:01 PM

  • Nevada George

    Jack, You kicked over an anthill.
    Yes, odds are against investors receiving an ROI
    on Lynas or Molycorp.
    However, they “are” two major Non-Chinese REE Integrated
    operations up and running.
    It is not over till it is over — It is not over yet.
    Let’s put the technical and financials in the parking
    lot for a few moments.

    Let’s mix in the effects of politics, geopolitics, environmentalism,
    nationalism, royalties, etc.

    These unforeseen influences on miners, REE and otherwise, have
    increased in the past ten years and have had a detrimental effect on
    their bottom line. Political influences are always lurking in the shadows
    and are a problem for productive/profitable mining operations.

    Molycorp
    Were there political influences with the Molycorp startup?
    Who were the original investors and were they using any
    “green energy taxpayer stimulus money”?
    How did the analysts come up with a IPO price of 12USD when
    at that point in time they were just mining the dump?
    Why did this stock pop up to 79USD?
    Who benefited from pumping up investor sentiment?

    Lynas
    If Lynas had not encountered the environmentalist problem.
    Which evolved into one of the major political issues in Malaysia —
    would they have encountered all the cash burn?
    Would they be now operating at a profit?

    Rewind a few years to the Global Panic on the perceived Rare Earth shortage due to China’s strategy of reducing REE exports.
    Those Heads of States that realized the implications of the disruption
    in the REE supply chain started to panic.
    Thus, the Geopolitical Circus at the WTO.
    This was big news at the time.
    Driving startup operations and investor sentiment.
    China had flexed its’ muscle and waved the Big REE Hammer
    which they can bring down on the World at any time they see fit.
    The dispute was “somewhat” settled by China’s concessions to the
    WTO.
    Most of the ROW did not get the message and went back to
    “Business as Usual” feeling all warm and fuzzy (normalcy bias)

    I have a big chunk of my junior miner portfolio in Lynas.
    Is the fat lady going to sing in Kuala Lumpur?
    The World is a crazy place right now.
    Many countries around the globe are experiencing
    civil disobedience.
    The Human Race has become an experiment gone wrong.
    What if? — A Geopolitical event, such as Ukraine, triggers
    a large blowback from the anti-western Countries?
    We cross over the Rubicon.
    China snuggles up to Russia and they form a coalition with
    numerous other countries and draw a “economic line in the sand”.
    China pulls out of the WTO and slams the Hammer down on REE
    exports.
    Places rare earth sanctions on those Countries that it wants
    to bring to its’ knees.

    Will a “Hypothetical Event” such as this pump up non China
    REE prices and Lynas and Molycorp profit from chaos?

    Or — is that scenario too Sci Fi Futuristic?

    March 17, 2014 - 12:03 PM

    • Jack Lifton

      I will address two of your points:
      1. The big deal in Malaysia is the political issue of the 12 year tax break that the government gave Lynas NOT THE SO-CALLED “Environmental issue.” Economically uninformed journalists like to write stories about emotional events rather than try to explain them.
      2. If China “cut off” the ROW from its REEs tomorrow then mines and refineries would get funded in many places and China would lose its dominance in “production and refining” within five years, and the Chinese well understand this. Note however that it is no longer the export of raw materials that is the issue; it is the export of finished goods utilizing rare earth enabled technologies. You should say “what if China cut GE off on exporting its Chinese made CFLs and LEDs to the ROW?” GE, I believe, is now wondering about this itself.

      March 19, 2014 - 5:31 AM

      • Nevada George

        You hit on another sore subject that I have been discussing with my group of International Trade friends.

        January 2014 was the last phase out of the use of incandescent bulbs in the US. Once stockpiles are used up that is it.
        Then you cannot manufacture or import incandescent bulbs into the US.

        If China cuts off the supply of energy efficient light bulbs then the US will go dark… Ha!
        Thanks to politics/lobbyists influence.

        Trade agreements that are piggybacked with “non-international trade” items end up becoming “Hard Treaties” that become the “Law of the Land”.

        This is how MNC’s succeed in legally forcing the consumer to buy their products.
        (energy efficient light bulbs, low flow toilets ,etc)

        I have a background in International Trade and Transportation and I am not happy about the ongoing TPP and TTIP Rounds.
        TPP participants signed non disclosure agreements… total BS

        If Obama “fast tracks” this crap “as is” then Sovereign States will be subjugated to MNC’s and put their Country in a legally compromising position.

        I hope these Lobbyists get a sniff the mercury vapors from the substandard/broken CFL’s.
        …. another story for another Blog. 🙁

        March 19, 2014 - 9:30 PM

  • GoBucks

    Jack,

    If you can figure out how to be paid per inch of comment column length…

    I think this one takes the cake!!

    (-;

    March 18, 2014 - 9:20 AM

  • G

    Anyone who records in a home office wearing earphones is clearly no big player in the industry. Jack I suggest you invest in a backdrop like all studios but maybe the reason is that you cant afford it because no one values your commentary and therefore don’t pay you.

    Why not provide a breakdown of all your calls for the last 5 years and we can let that record speak for itself.

    March 20, 2014 - 6:05 PM

    • Jack Lifton

      G,
      I don’t know who you are, but I know what you are: A cruel a******. I have impaired hearing, so it is most comfortable for me to wear noise suppressing earphones when I want to hear what people are saying on the Internet or phone. Last year I became a Million Miler on Delta, and I don’t care to list my 5 year travel agenda for you, because I don’t think I have anything to prove. I am delighted to broadcast from my home office, because it is comfortable. Skype isn’t always reliable. You sir are a true jackass.

      March 20, 2014 - 11:42 PM

      • Joe

        Jack, I don’t always agree with what you say but this time I do wholeheartedly.

        March 21, 2014 - 7:54 AM

      • hackenzac

        In light of today’s WTO ruling, you might well be right about Molycorp and Lynas if trade skirmish dumping occurs knocking the prices of the lrees down. Maybe you should do your little podcast thing from the bathroom sometime with the toilet flushing for effects. A slide whistle would be cool too. And a green screen where you draw diagrams. Did anybody ever tell you that you look like the Amazing Randi?

        March 26, 2014 - 2:48 PM

  • Hiwayman

    Jack,

    Your words…
    “As always in human endeavor,the market will ultimately choose the
    survivors from the lowest cost,most efficient,producers of those
    products the market desires.”

    Absolutely,-history shows us that money and talent goes where its
    treated the best. And that money and talent soon bypasses companies
    infected with troubles brought about by CEO’s who have an appalling
    lack of business acumen.

    As the global financial system continues its slide toward insolvency,
    CEO’s will need to be cool-headed,calculating,precise and strategic
    in their vision. Good character is not a thing of chance,it is the result
    of continued effort in right thinking.

    Old Chinese proverb…
    “If there are only two available options–then choose the third.” 🙂

    March 20, 2014 - 8:57 PM

  • Market is like "waiting for water to boil" | InvestorIntel

    […] Lynas and Molycorp should go bankrupt – Jack Lifton […]

    March 25, 2014 - 9:50 AM

  • Shawn Le

    Hi Jack,

    If rare earth prices recover this year, do you think lynas or molycorp will survive?

    Shawn

    March 26, 2014 - 12:56 AM

  • Joe

    Jack

    Please comment on the recent China proposal for rare earth taxation and this effect to help Lynas survive.

    Thanks

    May 26, 2014 - 2:09 PM

  • REEality Down Under and Up and Over | InvestorIntel

    […] I said here on InvestorIntel earlier this year (click here) I believe that both Lynas and Molycorp are too big and in the case of Molycorp, too congested by […]

    July 6, 2014 - 10:26 AM

  • Lynas and Molycorp: REEality Down Under and Up and Over | InvestorIntel

    […] I said here on InvestorIntel earlier this year (click here) I believe that both Lynas and Molycorp are too big and in the case of Molycorp, too congested by […]

    July 6, 2014 - 3:16 PM

  • MC

    Yep!

    October 1, 2014 - 6:47 PM

  • MC

    Here is my projection.
    Lynas will get a cash injection shortly. Up to 70 million.
    Current share offer to be successful.
    5 for 14 at 0.08 cents AUD and an eligibility offer to succeed

    They will survive. (I hear Gloria Gaynor in the background)
    Lynas shares 2015 rebound.
    After September October correction shares to reach AUD0.10 cents.
    Rare earth price recovery 2015 and ongoing 2016

    Happy days

    October 1, 2014 - 6:54 PM

  • freethinking

    if you’re quick for every 3 Lynas shares you sell, you can buy 1 Northern Minerals share

    October 2, 2014 - 6:57 AM

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