EDITOR: | June 17th, 2013 | 5 Comments

Rare Earths & Critical Minerals Week-in-Review: Sector Flat but Medallion +45%, Pele +18.79%, Critical Elements +12.7%, Montero +12.5% – and Northern Minerals +7.69%

| June 17, 2013 | 5 Comments

One of my wealthier associates text messaged me from the UK this AM with “I have a feeling things are going to turn late this year/early next and 2014 could be a good year for making money.” Additionally, I had a teleconference with one source late last night that told me that there was speculation that China was selling rare earths below production costs to generate revenue. Clearly the formula of selling below production cost cannot go on forever and he was guessing a turnaround on prices in the next 6 months.

Too long for me to wait and counterintuitive to the rising demand for renewable energy technologies which are dependent on rare earths and critical minerals, I would like to congratulate Robin for reporting on signs of recovery in our sector this last week in a piece he did Friday. He writes that Japan’s Showa Denko will resume production at two Chinese rare-earth alloy plants as early as this month after keeping the operations virtually suspended since August. The reason, he states is that the company expects a recovery in demand for hybrid vehicles, and therefore for rare earth alloys including neodymium and dysprosium.

While it was a pretty flat week for our advertorial members, they barely averaged down -1% versus the REE Leaders Index (REEL) that started the week at 402.46 pts and closed at 376.93 pts – down -6.34% for the week. REEL numbers may change here by the end of the week, when we announce the new line-up as 2 companies were taken off the index by FTSE and 2 were added. So, while most of the stocks were either flat or on the negative side some stocks showed outstanding performance. Medallion Resources Ltd., Pele Mountain Resources Inc., Montero Mining and Exploration Ltd, Metallica Minerals Limited, and Northern Minerals Limited stocks performed exceptionally good.

Medallion Resources Ltd (TSXV: MDL | OTCQX: MLLOF) deserves a special mention. The company’s stocks went up by +45% and +39.86% in the Canadian and the US market respectively after the company announced a Private Placement. Medallion Resources said that its President, Don Lay, has arranged the sale through the facilities of the TSX Venture Exchange (the “TSXV”) of 2,000,000 common shares of Medallion held or controlled by Mr. Lay at a price of $0.20 per share (the “Disposition”).  The proceeds from the Disposition will be used by Mr. Lay to fund his subscription to a private placement by Medallion (the “Private Placement”) of 2,000,000 common shares of Medallion at a price of $0.20 per share, for gross proceeds to Medallion of $400,000.

Pele Mountain Resources Inc. (TSXV: GEM | OTCQX: GOLDF) witnessed substantial upswing after it announced major increase in uranium and rare earth resources at Eco Ridge. The stocks went up +18.79% in the US market and +8.33% in the Canadian market and . Pele Mountain Resources is among the companies with a promising growth potential. The company is focused on the sustainable development of its 100-percent owned Eco Ridge Mine Rare Earth and Uranium Project. Eco Ridge is located in Elliot Lake, the former “uranium mining capital of the world” and the only Canadian mining camp to have ever achieved commercial rare earth production. Elliot Lake was historically the major source of heavy rare earth production in North America. With well-understood geology and mineralogy, excellent regional infrastructure, and strong local support, Eco Ridge is an ideal location for the development of a safe, secure, and reliable long-term supply of uranium, critical rare earths and scandium (click here for video interview).

I could not find any news on Critical Elements Corporation (OTCQX: CRECF) or Montero Mining and Exploration Ltd. (TSXV: MON) but they were up +12.7%  and +12.50% respectively…

Northern Minerals (ASX: NTU) went up by 7.69% after the company announced initial results from on-going drilling at the Gambit West and Wolverine prospects at its Browns Range project. The result showed outstanding Heavy Rare Earth (HRE) assay results from drilling at Gambit West prospect including highest grades received to date from Browns Range project.

Here are the numbers for the week:

Tracy Weslosky


An accomplished entrepreneur Tracy Weslosky is the CEO for InvestorIntel Corp., a company that publishes InvestorIntel.com, a trusted source of online market information for investors ... <Read more about Tracy Weslosky>

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  • u4eah

    Hello Tracy; in your article you stated; “I had a teleconference with one source late last night that told me that there was speculation that China was selling rare earths below production costs to generate revenue.”
    – I have long held the view that China will not willingly relinquish their monopolistic control of such a strategic industry; and this is more likely the reason for “selling below cost”, as well as turning a somewhat blind eye towards the alleged rampant smuggling issue.
    – Absolutely hard to prove of course; and they will no doubt do their best to tread very carefully before the watchfull eye ot the WTO; …however, that saying still applies, “if it walks and quacks like a Peking duck; …. .. …….. ..! “

    June 17, 2013 - 12:16 PM

  • Tracy Weslosky

    I cannot comment on the strategies and dramas behind-the-scenes other than they continue to rise. The one thing I do know is that prices have to rise, and some REEs and Critical Minerals (i.e. vanadium, scandium, tantalum) will prosper.

    Noted that I seemingly missed Critical Elements Corp. and their +12.7% rise in the US…

    Past due on an interview with Critical Elements…speed dialling.

    June 17, 2013 - 3:27 PM

  • Veritas Bob

    Don’t get too excited by that 12.7% rise in Critical Elements Corp. – that was on the OCTQX. The quote I see for OCTQX right now is $0.107 bid by $0.123 ask. It would be an 11.5% “gain” if the stock merely went from a last trade one day at the bid, to a last trade the next day at the ask. Meanwhile, it fell 1/2 Canadian cent, which is 4.17% on TSXV. So I think you basically have noise in the price of a stock with a wide bid-ask spread.

    Also, wouldn’t it make more sense to measure price change from closing price of one week, to closing price of the next, rather than from opening price of the week to closing price of the week, as in your table?

    June 17, 2013 - 3:58 PM

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