EDITOR: | January 24th, 2015 | 41 Comments

Lifton on Molycorp rumors and ‘zombie’ investors

| January 24, 2015 | 41 Comments
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Molycorp, a symbol of the great awakening of Rare Earths in the American domestic market, has now run into a perfect storm of “bad stuff” that threatens to potentially blast the cause of Rare Earths production back by a decade rather than expedite Western independence from Chinese dominance. In retrospect we can say that the very foreseeable consequence of globalization of Western economies, and expediency in the assessment of what minerals are deemed strategic, has been this sorry pass. The main losers will be the domestic economy and the strategic interests of the US and the West.

The company made, in my humble opinion, a timely appearance on the scene just as the genuine fears for American economic and military security were soaring. This gave it the opportunity to play the critical resource card at the most fevered point in that game. The very foreseeable negative consequences on our domestic economy from the current wave of globalization is the ‘concern’ that Molycorp may be in for another bout of highly disruptive, and potentially transformative, debt restructuring negotiations, as reported by Debtwire on the 21st of January. Hot on the heels of this S&P downgraded its debt to CCC, from CCC+, on the view that the company has an unsustainable capital structure and that its liquidity position will continue to erode over the next 12 months. Ominously the outlook was revised to negative, from developing.

Far be it for us to say that the Molycorp house of cards will fold (or be reshuffled). We can only go on the fact that a seemingly endless series of quarters with sizeable losses have gone by, and the company is saddled with debt that many deem to be beyond any rational level of being able to be repaid from revenues if the current earnings trend persists. Meanwhile, the company’s share price has lost 99.5% of its “value” created since its high point in the speculative manufactured rare earths price boom of 2011.

Molycorp the core asset of which is a hugely expensive mining operation (for what it is and what it can produce) and a vastly oversized processing plant has run out of reasons to keep its doors open by continuing to produce products (lanthanum and cerium in particular) that are available at lower prices elsewhere.

The right size for any business is the one where the break-even number, the lowest revenue at which it can still make a profit, is consistent with its share of the market in the worst of times. The only survival technique for a company is to deliver on time, to spec, the quantities ordered at the price agreed. Any deviation from this simple procurement officer’s mantra makes a company an unreliable supplier to be given no slack if it is even given a second chance.

Like all natural resource markets the rare earths’ markets (the key words here are earths and markets, distinct and plural markets!) grow rapidly when and where the GDPs of the industrialized or industrializing countries that use them grow in the same fashion. Overall world markets for anything grow in proportion to the growth of the overall world economy. This simple observation seems to have been overlooked by most individual investors in the case of the rare earths, but I believe that it was not helped by the marketing departments of investment banks that did not know much about Rare Earths, let alone the arcane subject of the mining and processing thereof. The seal of approval for the business plan for incoming investors was that its existing major shareholders (in its private guise) were impeccable financial institutions and a large trading house that attempted to re-create the Molycorp of 1984. Alas they were did not have amongst their abilities the wherewithal to recreate the global marketplace of 1984.

When a bubble is forming much of the analysis is of the “this time it’s different” type only. Billions of dollars, on paper, were made by those investing millions of dollars ostensibly to restore American self-sufficiency in the production of the rare earths and in that way to support the security of the supply of these materials to American domestic manufacturers. It is a struggle to give a Hail Mary Pass to the original promoters in saying that they did not understand either the rare earths markets or the rare earths supply chain.

Now that the American investing public has noticed just how complex the rare earths markets are and how little firepower is brought to the global resource agenda by a lightweight such as Molycorp Wall Street’s carnival barkers are pulling the act from their big top.

I do not really care who lost money in the Molycorp “game.” I do care about those few remaining professionally managed junior mining ventures trying to produce the necessary and critical rare earths to re-lay the foundation of an American, European, and (non-Chinese) Asian domestic rare earth supply chain by profitably producing the right rare earths in quantities the market needs and will need in the near to mid-term when that market is measured by global GDP and by a supply and supply chain secure enough to allow long term planning of industrial production.

My advice is forget instant riches made by daily stock trading; the game is rigged. Secure a long term return by smart investing.

My choices of companies with the highest probability of going into production profitably and staying in business producing the rare earths outside of China are informed by what I know from experience in the rare earths markets and what I have followed intensively for the last decade. If a company is not on my list it means that either I do not consider it viable or that I do not consider it at all, because I know nothing about it. The latter category covers those companies in regions of the world that I have not visited (Kazakhstan, for example) or that I simply am not aware of.

My choices are skewed towards ventures that have as a goal the production of the critical rare earths, primarily beginning with praseodymium. I think that the light rare earths, cerium and lanthanum, truly belong to the class of commodity technology metals not of rare technology metals. This means that I think that they are plentiful and in oversupply even now. Additionally, I place value on long term issues such as choice of downstream process technologies; choice of entry point downstream into the market; and target markets and individual target market companies. My choices include the professionalism of management and are quality picks in the rare earth markets if profitable production and continuing production is the long term goal.

Note also that light rare earths, if ever additional supplies are needed to be produced outside of China, will be produced by existing senior mining companies from their current deposits.

If you think you can get rich quick by “smart’ trading in the shares of dead companies and you are not an elite with access to other people’s money then you are a zombie lover, and I personally have nothing to say to you and nothing at all in common with you.

Now as to lithium and graphite…we’ll save those topics for next week.


Jack Lifton

Editor:

Jack Lifton is the CEO for Jack Lifton, LLC and is a consultant, author, and lecturer on the market fundamentals of technology metals. Technology metals ... <Read more about Jack Lifton>


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Comments

  • Tracy Weslosky

    Jack. The above is a good commentary on investing in what you know — not being a ‘groupie’ and following the crowd. Few can name the rare earths, never mind understanding the challenges involved in rare earth extraction. In 2008 when I interviewed Don Bubar from AVALON and you (this is where I met you) for a series that was running on CNBC World — it was clear to me that this was not only a fascinating investment sector; but one to which few understood….and InvestorIntel is driven by securing the truth for ourselves and our investors.

    In fact the challenge you describe above is the reason we exist today. We built http://www.REEHandbook.com and RareMetalBlog.com (today it is InvestorIntel) because we wanted to encourage the top experts in the world to converse, debate and share their understanding of this very complex topic that involves geopolitics, an understanding of chemistry/technology/history — and a vision for the future.

    Thanks again Jack for sharing your expertise with the InvestorIntel audience. And a special thanks to our members which allow us to provide this forum for our audience — for free.

    January 23, 2015 - 12:15 PM

  • Fixed

    Jack if your choices ever get to production then take a bow until then you know no more of who will actually make it then anybody else. it’s all speculation till somebody actually starts producing. I pesonally do not agree with your selections. We will have to wait for at least 3 years or so to see if your choices make it. Until then keep up the entertainment in this space of we will get there….maybe next year…lol…and keep changing your choices as the years go by…after the old choices die…you might be right someday…lol…

    January 23, 2015 - 1:00 PM

  • hackenzac

    There’s so much informational noise out there that it’s better to turn off your television and do your own DD. While my timing was way off and I started investing in ree back in 2011, I’ve been buying all along. I started before I’d ever heard of Jack Lifton or the Rare Metal blog who while shedding much and appreciated light and help me understand better have merely confirmed what I already knew and have continued to bet on. It’s frankly not that hard to analyze this sector outside of Chinese opacity and learning concepts like demand destruction. Who knew their crack down was going to cause a glut? Here’s how I did it; I focused on magnet demand, I figured it would be going up, I identified dysprosium and then I found the project as far away from China’s interests and as closely aligned with Western and American as I could in the best of mining jurisdictions, voila Alaska. I used to live there. I know the mentality. I knew of the Permanent Fund, I used to get my check. It’s sacrosanct and they need the royalties to keep it banked. It’s not hard to do. Start with a heavy dysprosium skew and work it backwards. That leaves Norra Karr, Bokan and Browns Range, with deposits like Steenkampkraal, Loftdal and Kutessay being interesting but too geographically dangerous imo. It’s simple, who needs analysts? In fact, I disagree with some of you. I think Bear Lodge is going to have trouble with the natives and Round Top worst case drought scenario won’t have the water. I’m coming at you from my mom’s basement. What do I know but I do appreciate the expert confirmations of what I think I do. I’m tired of the investment necklace millstones of the likes of gwg and mcp. I say good riddance to both of them. It’ll leave more elbow room for real winners.

    January 23, 2015 - 1:30 PM

  • hackenzac

    Actually, I’ve lost half my butt but if I’d listened to experts, I’d have been in mcp instead. What do you mean by wealthy anyway? Have you seen my mother’s basement? It has espresso.

    January 23, 2015 - 1:53 PM

  • Jim

    Doesn’t QRM have higher % of dysprosium than NTU and TAS?

    January 23, 2015 - 5:15 PM

  • Fixed

    Jack’s picks do not even quailfy according to his criteria… heck wonder if China could stand a chance…lol…If Jack’s choicen few do meet his expectations would love to hear how and why when compared to the others … How about it Jack point for point …or do you not feel up to the challenge?

    January 23, 2015 - 6:18 PM

  • Fixed

    I’ll be willing to bet that in 3 years time Jack’s picks will be producing NOTHING except excuses…lol…

    January 23, 2015 - 6:27 PM

  • Fixed

    Tracy of course you do relise that “if” GWMG is successful that your investorintel will not be credited in making the right picks in Jr miners that will be successful in the ROW ree wannabes… Could you talk to Marc Levier before you make that decision?.. Just saying you might want to check it out…

    January 23, 2015 - 6:47 PM

  • Mr.Jimmy

    Any word on an interview with Simon from GMA Tracy? Thanks.

    January 23, 2015 - 9:53 PM

  • Tracy Weslosky

    Good morning Fixed — Christopher Ecclestone is an internationally acclaimed and recognized analyst. His opinion and professional conclusions are his own; not that of InvestorIntel. InvestorIntel is a forum for the industry and self directed investors to gather, debate and share data. I personally know and like Marc Levier and have his cell phone to dial if I need him. This was written by Christopher not me, and I provided some very astute and timely commentary and I have a lot of respect for all of our editors and have worked hard to insure that they are part of the InvestorIntel team.

    Do you want my opinion? GWMG needs to have more communication with their shareholders, and the post you are referencing (please comment on the post to which you are referencing in the future) was again; written by one of the best, if not the best in the industry. Your issue is with GWMG, not the platform that has taken the time to provide you with the best analysis available for the public…and for free.

    Also, please end the 1-liners with useless objectives other than to invest negative energy where it is not welcome. Jack Lifton is considered one of the top three experts in the world for the sector, and if you disagree with him — try and back it up with a qualified statement and data that supports your position. Let me add, your online name does not conjure any friends on this site as we find the term “Fixed” to be a negative….

    January 24, 2015 - 8:42 AM

  • Tracy Weslosky

    Mr. Jimmy,

    Please email info@investorintel.com in the future on interview requests, and we are happy to provide feedback. I am behind in my production schedule and we have brought in a new interviewer to assist in this process. For instance, Jack Lifton will be interviewing Jim Engdahl this next week from STAR, and Kiril Mugerman from GeoMegA and I have been playing phone tag. Your right — we need an update from Simon, and I would enjoy seeing him and finding out where there are today myself; and will send Kiril an email this weekend to try and nail it down. Thanks for your comment and insight.

    January 24, 2015 - 8:50 AM

  • Tracy Weslosky

    Jim,
    An update on Quest is forthcoming and I will be sending an email to Peter Cashin this weekend…this said, QRM is lower on the storyboard plan-of-action as we have some very intriguing stories on the market coming out this next week….and Jack Lifton is leading the charge.

    January 24, 2015 - 8:51 AM

  • Mr.Jimmy

    Will do Tracy. Thanks for your help and I look forward to your interview with GeoMegA. All the best.

    January 24, 2015 - 12:14 PM

  • wwwater

    Mr. Lifton – I agree that ventures that may succeed in the rare earth sector must have a goal in the production of the more SALEABLE critical rare earths. Your other criteria is to narrow compared to the criteria I utilize as detailed below and which I have established in the very early 2000’s when I started focusing on rare earths and their implication on today’s society.

    MANAGEMENT — How well are they structured and versed in the Rare Earth Sector. Is there personnel and a management team to take the company to the next level and beyond?

    INFRASTRUCTURE — How accessible are the properties and all the facilities needed to develop the properties and continue production?

    POLITICAL ENVIRONMENT — How friendly and politically stable is the jurisdiction within which the venture will be operating?

    MARKETING — How well has or is the venture marketing their products or are they seeking a market, ie: Off-Take Agreements etc. How is the company being exposed to end users of their saleable products to be produced?

    ACCESS TO CAPITAL — Does the company have the capability in raising the required capital to develop or proceed with the proposed development? How much capital will be required and what is their current share structure and market capitalization? Is further dilution needed or are other means of obtaining capital an option to furthering development, ie: joint venturing, debt financing?

    LABOR FORCE — Is an acceptable level of skilled labour available within proximity of the development or must they be brought in and trained? Has the company got expertise within the organization to proceed to the production level or must they be recruited? The market for this type of expertise is very competitive and those companies having that expertise or access to that expertise are definitely going to be at an advantage.

    MATERIAL SUPPLY – Is material (reagents etc:) required for the operation of the venture readily available along with other operational costs at a competitive rate which will have an extensive impact on the overall OPEX. Thus the OPEX along with the CAPEX will dictate if the venture is a go or no-go.

    PROPERTIES — How many properties does the company currently hold 100% ownership and joint venture arrangements or has plans on acquiring to compete in the Rare Earth Sector? How advanced in the development of the properties is the company, staking, aerial surveys, drilling, compliance reports (43-101 or JORG), feasibility studies and commitment to production and construction of facilities?

    Not to say that the items partially detailed above are not crucial or relevant to the success of the venture, but I must imply that those items detailed below will determine the faith of the venture.

    SIZE OF RESERVES –Although this is not the main factor, it will determine how successfully the overall chain of supply will be affected by the quantity of rare earth oxides that may be provided from the deposit. How many properties within the portfolio of the company have sizeable reserves? How many have 43-101, JORG compliant data, or historical data? What stages of development are the properties and time lines of development?

    GRADES OF THE DEPOSITS — This is one of the MAIN KEY factors that will spell and determine the faith and how successfully the overall chain of supply will be affected by the company. It has and is still projected that Neodymium (Nd), Praseodymium (Pr), Europium (Eu), Terbium (Tb), Dysprosium (Dy) and along with Yttrium (Y) will be in short supply and is projected that China may be importing those particular rare earths for their domestic supply. Unless the grade within the deposit is sufficient enough to be able to produce a substantial supply of these saleable elements the chance of success of that venture is limited.

    PERCENTAGE OF DISTRIBUTION — ANOTHER KEY FACTOR. As stated above certain elements are projected to be in short supply and if the percentages of distribution within the deposits that are being developed are low or none existent then the success of the company will be affected. No two deposits are alike, varying in grade and percentage distribution of mineralization. The percentage distribution of light rare earths versus heavy rare earths will play a key role in the company’s contribution to the entire supply chain. It is also projected that the supply demand for light rare earths, other than Neodymium (Nd) and Samarium (Sm) will decrease substantially, by as much as, 2011 $110 kg. to $4.50 kg. (Ce) Cerium and (La) Lanthanum, which is in over supply will have a definitive impact on light rare earth producers. Now the question of how much CREEs are within the deposits as it is those elements that will significantly impact the revenue stream of the company as the saleable supply of the remaining rare earths will cause pricing to be suppressed to a point of non-profitability.

    RECOVERY RATE — This factor will have a significant effect on the volume of ore that is processed to produce one tonne of saleable RE Oxides. The higher the Recovery Rate the less tonnage has to be processed. Recovery rates could range from 90% to low as 50%. It all depends on the complexity of the mineralization of the deposit and the metallurgy needed to extract the rare earths from the ore. Each deposit has its own unique complexities and no two deposits are alike.

    COST OF PRODUCTION — Each jurisdiction has its advantages and disadvantages as to the cost in carrying out any enterprise. Within some jurisdictions the operational costs are 50% to 70% less than other jurisdictions.
    Therefore you must be familiar with sources in obtaining that type of data, which at times is very difficult. The cash cost of producing one kilogram of high purity saleable oxides will vary within each deposit as the complexity of the mineralization along with the metallurgy in extracting and separation of the oxides into the separate rare earths oxides and metals. Those costs can vary as low as $5.00 per kilogram to as high as $19.00 per kilogram or more.

    VALUE ADDED CAPABILITIES — Not many companies within the Rare Earth Sector outside of China have a capability to continue the supply chain from the concentrate level into the next level of producing saleable purity oxides and metals and then into alloys and marketing those alloys and metals.

    Summarized here is what the chain entails, Link (1) Property Acquisition, Link (2) Exploration and Development, Link (3) Mining and Milling the Ore, Link (4) Production of concentrates, chlorides or carbonates, also known as beneficiation, Link (5) Refine Concentrates into high purity oxides, Link (6) Oxides separated into individual metals, Link (7) Metals are blended into alloys, Link (8) Alloys marketed to manufacturers of magnets, batteries and other commodities.
    It so happens that the value added capability is the most profitable of all other aspects of the chain.

    From the high purity Link 5 to the alloy marketing Link 8 between 75 to 80% of profits are realized within a company’s bottom line if they have that capability within their portfolio, the mining on to beneficiation contributes only about 20% to 25% of the available profit.

    SAFE DISPOSAL OR STORAGE OF RADIOACTIVE WASTE — One of the main environmental concerns is, does the venture have a plan in place and approval to safely dispose of or store the radioactive waste or contaminant by products that inherently occur in the processing of rare earth bearing ore.

    January 24, 2015 - 12:33 PM

  • Fixed

    Well I appreciate your resonse and unfortunately disagree with at least two of your experts and their opinions of GWMG which seems skewed as always negative. My opinion is that GWMG is the best jr. ree company uotside China with the most potential out there, again this is my opinion. Besides the money issue with the bonds and all we will all see if it dooms GWMG or not. I personally do not believe it will as the potential for the money they will generate from mine to metal will overcome the debt issue once steenkampskraal is up and running. As I see it no other ree company is as close to having an operating mine as GWMG let alone taking it all the way to metals for sale to magnet manufacters. I am sorry you find my name to be negitive but if you look it up in the dictionary along side “groupie” you will find that Fixed is really not negitive and “Groupie” is which is what you said of me supporting GWMG. GWMG seems to be given no chance of making it in the REE world by Jack or Chris of where nobody has made anything except Moly and Lynas who are actually producing REE’s outside of China. Yes we all wish Marc Levier would come out and tell all there is to tell but feel he will only when he and GWMG are ready. So why don’t you pick up the phone and call him then let the world know what he tells you? One more thing it maybe just me but does Jack know Marc Levier at all because he seems to lean towards the management of GWMG as not being very good?

    January 24, 2015 - 4:57 PM

    • Tracy Weslosky

      Fixed.
      It is your opinion that GWMG is the #1 junior, and I like that you are trying to back it up. This is cool. The mud slinging is getting old, plus is this not the 2nd time I have told you to comment on the column you have a challenge with? As this is about MCP, not GWMG….

      Also:
      1. Your name is negative because our audience is predominantly male and few like the term “Fixed” so may I graciously request that you change your handle?
      2. Christopher Ecclestone is an internationally renowned analyst and this is his analysis — not anyone else; so quit burning down the temple just because you disagree with one member…
      3. InvestorIntel is famous for being positive and we have written a lot of good content on GWMG over the years, so do not rewrite history or make anymore claims that are untrue and not factual…

      On that note, I have added “call Marc” to my to-do list as I do like him and we get along well. This said, I will let him know that some of his groupies are storming the site….again: this article is about MCP. Please post relevant commentary on the column your referencing….thanks.

      January 24, 2015 - 5:12 PM

  • DANIEL

    I wasn’t going to waste my time commenting on this article but since Tracy posted so I’ll add my comment. The articles are entertaining and has relevant information that could be usefull. The conclusions of internationally acclaimed analyst are biased written by adolescents. Text book market theory on Right Size has no relevance to a mine that has not started producing nor the constraint of LCM have any bearing on future production. The bankruptcy of MCP has enormous consequences for the manufacturing sector in the States. The choice of Ucore shows Jack has personal intentions not worthy of his reputation. This is an answer to Tracy. I would not waste my time answering to Lifton.

    January 24, 2015 - 5:58 PM

  • Jack Lifton

    I will waste my time with just one comment for Daniel: To say that “The bankruptcy of MCP has enormous consequences for the manufacturing sector in the [United?] States” is naive and indicates an exceedingly narrow, and,I suspect, self-interested view of a personal investment strategy gone awry rather than any informed view of America’s enormous manufacturing sector. Molycorp’s ripple in the American pond is already spreading to extinction. Molycorp was a sympton of the malaise not an integral part of the body. Molycorp never succeeded well enough to have the impact that Daniel proposes.

    January 24, 2015 - 6:15 PM

  • DANIEL

    You suspect wrong. Journalistic integrity provide both sides of an argument. Personal vendetta and emotions damage the truth.
    Molycorp is irrelavent.

    January 24, 2015 - 6:42 PM

  • Fixed

    Tracy this is in response to my name, MCP and you continuing to call GWMG supporters “Groupies”…as Arguably you could be Jack and Chris’s number one “Groupie” and I can respect that …Good job covering Molycorp Jack………………………………fixed

    1.
    fastened, attached, or placed so as to be firm and not readily movable; firmly implanted; stationary; rigid.
    2.
    rendered stable or permanent, as color.
    3.
    set or intent upon something; steadily directed:
    a fixed stare.
    4.
    definitely and permanently placed:
    a fixed buoy; a fixed line of defense.
    5.
    not fluctuating or varying; definite:
    a fixed purpose.
    6.
    supplied with or having enough of something necessary or wanted, as money. Was going to post what I found “Groupies” defined as but for the ladies out there I do not feel it was approriate to consider oneself a groupie you’ll have to look up the meaning yourself.

    January 24, 2015 - 6:51 PM

  • walbangerharvey

    Molycorp and Chinese Flying Lanterns–For centuries fragile and paper Chinese lanterns have been lifting off in China. Powered by the heat of a small candle, they continue to rise gracefully for about 15 minutes until the flame burns out and they fall back to earth. I always have seen Molycorp as a fragile, cobbled together and oversized flying lantern in which hype and promotion lifted it to significant height before a lack of fuel, that being any potential for profit, doomed it to descent. I believe that the ree juniors that will be successful will be much smaller, better constructed and designed and fueled for long flight. A prerequisite for that will be a stable and sustaining geography for design and launching. I never have owned stock in MCP but, for a time, did get swept up in sexy little Great Western during the ree hype of several years ago. Personally, I now don’t think GWM will lift off, likewise for Quest and Avalon. Today I have all my speculative ree money in Tasman and Ucore. I think they are building the next-generation airships that not only will lift off, in part fueled by the heat and lifting force given off from the ashes of Molycorp but will soar. This discussion might be beyond the groupies and cultists.

    January 25, 2015 - 3:12 AM

  • jack cummins

    Don’t give-up on Stans Energy (the “fat lady hasn’t sung yet”). By the end of May 2015 the results of Stans efforts in the Kyrgyz Republic should be known. It is still possible the Kyrgyz Republic and Stans could reach an agreement on Kutessay. Stans management has the fortitude to deal with the government (as does the management of Centerra Gold). I believe Stans will collect the $118 million damage award (and distribute $0.66 p/s to shareholders) and reach an agreement to mine ( Don’t ignore the fact that Stans is expanding into Russia. Stans is as close to production of the HEAVIES as any other non-Chinese company.

    January 25, 2015 - 3:31 AM

  • yankeestation

    Wwwater’s contribution is a “must read” for any new REE investor. Most useful I have personally ever read.

    January 25, 2015 - 4:33 AM

    • Tracy Weslosky

      Yes, Yankeestation — I agree that wwwater’s commentary was excellent and have been wanting to send an email thanking this person for enhancing the discussion with some thoughtful and intelligent insight. Think if I recall this person is retired as I tried to talk him into doing a column before — and as you can see from above, he has literally written one for us. Thank you for complimenting wwwater and I second this.

      Fixed. Your keep trying to get everyone all upset, but no on is buying what your selling. I did NOT call all GWMG shareholders groupies…I simply stated that I thought that GWMG had — some. And as you can see from the voluminous commentary, my point was indeed made. Again, I do not find the term negative, and we always enjoy the spirited candor of the die hard GWMG supporters — so someone is doing something right? As you know — $GWG.V closed at $0.04 and $GWMGF closed at $0.0289 on Friday….

      DANIEL – I am confused by your response. It was kind of a compliment followed by a slap across the face. I have reviewed your profile and commentary history and you provide ‘relatively smart’ comments but must we insult to make a point? Again, you have some fruitful feedback historically, but if Jack is not an expert can you tell me why at least 3 governments cite him as an expert? Including yours, I am guessing…

      Now — do I agree with you DANIEL that MCP failing will be substantial to our industry? Yes, I actually do because they have been #1 leader for many years now. In fact, for the record — I believe that MOLYCORP will make it….why? Because for starters I know Constantine and Geoff and Jim and Daniel and many others at MCP and believe that they will do just about anything to avoid failure. Plus, what can I say? I am an optimistic entrepreneur and love seeing a company rise and learn from their mistakes. Again this is an opinion only and I am NOT a licensed investment advisor….just a Publisher, Writer, Entrepreneur — or as one person called me last week online “someone with a loser day job” (LMAO)….

      As I tell everyone — this is a place for debate and intelligent commentary. We do not all agree with anyone….and if you do: you do not belong on InvestorIntel.

      JACK CUMMINS – I have never given up on STANS Energy. This was the “little red train that could” and well, thanks for reminding me to call David and find out when they plan on updating all of us…

      Walbangerharvey – there are many people that write for this site that will applaud your commentary as they fully agree with you. Speaking of rising stars, let’s not step over ALKANE RESOURCES that has been a heavy weight and leader since the onset of the “Super Seven” in 2009, or Northern Minerals that may arguably be our #1 market cap player here by the end of the week.

      Thank you everyone for your thoughts and comments, and here’s to a great week.

      January 25, 2015 - 8:22 AM

  • DANIEL

    Hi Tracy
    I did not mean to insult you. The articles are from others but you should control the content. Jack of all trades is an expert in one niche area. Readers sift through the relevant information and disregard the bs. We and government agencies have our own mind not Zombies. Govt take our analysis and make their own decision. I find it amusing that govt seek experts advise when the advice given are biased in achieving certain objectives. I sent a message and stopped Avalon…period. My ability to decimate expert opinion made the world you live in.
    Molycorp had a study done quantifying the flow through jobs in dollar. Jack is wrong. Molycorp is irrelevant because the chips will drop as it will. Shareholders subsidize the manufacturing industry.

    January 25, 2015 - 10:50 AM

    • Tracy Weslosky

      InvestorIntel was created for the independent self-directed investor, not the zombies; so you fit in well DANIEL. This said, because II readers are NOT zombies, they would shudder if I ‘controlled’ the content as you suggest I should. We do have standards, and Mr. Lifton is as I have stated above, deemed to be one of the world’s top experts in ROW REEs. We are lucky to have him. This said, you are welcome to disagree with Jack — what few may recall is that one of my first interactions with Jack was on CNBC’s Squawk Box. Let me add however that Jack is the one who coined the term “Technology Metals” and has played a real historical role in the critical materials and sustainability for the ROW…hence the respect I always show him. He has made a difference.

      January 25, 2015 - 12:01 PM

  • walbangerharvey

    Thankfully, discourse on this article is much more civilized than that following the “Great” article. Hopefully, it will stay that way. Anyone who reads the Stockhouse GWG bullboard already is familiar with Water’s thinking on ree miners; it seems that the study of the ree industry and its companies is his fulltime endeavor. To say the least, he has a very loyal following on that site. It is interesting to plug various ree miners into his criteria for success list. Molycorp, for example, would seem to have been doomed from the onset given qualities of its ore alone, just as Stans shouldn’t have been surprised when national political realities became more than problematic. His views are appreciated but, although they give the appearance of comprehensiveness, they can lack in determinative details. For example, the labour factor doesn’t only relate to being skilled. That skill level has little relevance in countries with troubled labour histories, seething labour militancy and impossible labour/management relations. There are any number of organizations that rank countries in terms of these factors, which always show Scandinavian countries as most favourable for FDI and SubSaharan countries as most problematic. It would be naïve to assume that any organization considering investing $10s of millions, if not $100s of millions, wouldn’t be swayed by such realities. And without essential funding even the world’s highest grade ore deposit will remain underground and unmined when potential risks outweigh potential rewards.

    January 25, 2015 - 1:01 PM

  • DANIEL

    I agree Tracy. I had been following the industry for years but was not an investor until now. Jack and Gareth were my initial research material.
    I had the perception you were an editor/owner of II and can set the standard. Thank you for your reply. Till another time Tracy.

    January 25, 2015 - 1:57 PM

  • Jimm

    I have followed Jack and Tracy for some time. I find what they
    have to say always uncovers another timely facet to the REE industry.
    That said … and forgetting the “juniors” where does this leave the
    other 800 pound gorilla in the room – Lynas?
    What are the short term (6 months) and long term (12 months +)
    projections?
    Thanks.

    Jimm

    January 25, 2015 - 2:51 PM

  • David Mortimer

    To Jack Cummins they are all aspirations concerning Stans if your scenario played out I would be delighted but as we know very dark forces have conspired against Stans energy and its share holders …

    January 26, 2015 - 5:15 AM

  • Christopher Ecclestone

    Jimm… the 800lb gorilla is now much diminished and more like skinny red-haired orangutans with long arms you see in the zoo.. unlike MCP, it doesn’t even have diversification and a downstream presence going for it… it is afflicted with the same preponderance of Ce and La though and while I am bullish on an upturn in prices of the broader slate of REEs those two elements remain in the “don’t call us , we’ll call you” box when it comes to customer demand..

    Think about it, if MCP does have a debt restructuring and emerges (probably owned by new holders) with less of a debt burden then Lynas is going to be the main unreconstructed player… it will be disadvantaged in the business sphere and in investor perceptions.

    January 26, 2015 - 11:03 AM

  • Christopher Ecclestone

    Hackenzac… your Chinese lantern analogy was particularly apt… though I though they were Japanese (or they are the ones that throw lanterns in the rivers?)..

    Intrigued by your reference to Avalon…. you are not really talking apples to apples though now that the focus has shifted to tin (East Kemptville)…. though of course, UCore has a mighty tin asset itself in Ray RIver..

    maybe Molycorp might have done itself a favour and got some tin…

    January 26, 2015 - 11:09 AM

  • hackenzac

    Chinese? Japanese? What’s the difference? lol j/k

    January 26, 2015 - 12:45 PM

  • walbangerharvey

    Chris: Always appreciate you input on MCP and the ree universe. It was I, not Hacken, who referenced the Chinese lanterns. Japanese also, of course, have their lanterns but I don’t believe they typically are of the flying variety.

    January 26, 2015 - 8:43 PM

  • Tim Ainsworth

    Lol Chris, Lynas run over your cat?
    Maybe you should check Lynas’s foundation LT contracts for Ce & La plus 23% NdPr against the return Moly’s reaped investing $1.5B of debt & dilution downstream.
    They paid $1.3B for Neo which netted $20M in the last full year prior bubble prices and with the expiration of patents last year they are currently being cannibalised by previous customers, might be lucky to see that $20M again.
    Maybe you can explain why they are shipping “LREC” halfway around the world to ex Soviet Silmet AWAY from their “state of art” separation facility Mt Pass? Yet including “LREC” in “production” numbers?
    Very hard to see any “value add” in any molecule Moly is handling.

    January 27, 2015 - 10:23 AM

  • Jack****

    Did Mr. Lifton actually write this blog himself? The opinions seem like his, but the wording and phrasing don’t seem like his normal style. Was it written by a Zombie? Maybe a British Zombie?

    January 27, 2015 - 10:56 AM

    • Tracy Weslosky

      I have reviewed your IP address Mr. “Jack****” and it appears that you are an out of work editor? Most people focus on the content, but you cling tenaciously to errors, which suggest you are not a fun person to party with on the weekends but undoubtedly an asset to people like me. Presently we are hiring an editor, so send your resume please to info@investorintel.com. No zombies may apply.

      January 27, 2015 - 3:55 PM

  • Springtrader

    That’s probably just as well, Tracy, because zombies are known to double-check facts as well as grammar. Could you imagine the ruckus that would cause? 🙂

    January 28, 2015 - 12:17 AM

  • Jack****

    I am glad that you know where to find me. The welcome mat is always out for you, Ms. Weslosky. Drinks are usually served about 4:30 PM, so please do plan on stopping by then, we’ll have a lot to discuss.

    January 29, 2015 - 5:26 PM

  • Fixed

    Mention drinks and she’ll be there…lol…Sorry I forgot no more 1 liners sorry…lol…

    January 29, 2015 - 5:35 PM

  • Fixed

    Just made a butt load of money on Moly thanks Jack…lol…Here’s to GWMG…CHEERS…LOL…

    February 3, 2015 - 5:51 PM

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