Oracle promises a rare earth market poised for recovery
InvestorIntel’s Rare Earths & Critical Minerals Month-in-Review (August 2013): Unfortunately July’s upward momentum could not be sustained throughout August, as the REE Leaders Index fell -12.40% (based on July 31st’s close of 403 points compared to August 30th’s 353-point close), coupled with the InvestorIntel members performance falling flat overall for the month – with a nominal +0.14% increase. Excuse the un-ladylike response, but WTF?
Robin Bromby just wrote a sizzling piece 2 days ago titled Sky could be the limit for REE sector — and he’s right. Referencing the rare earths and critical minerals in renewable energy as the “next industrial revolution”, he reminds us that we have to start thinking more about where we are headed. He is of course referencing the lack of rest of the world REE mining and refining, and, taking the past 10 years into account, the undeniable truth that there will be uses in 2023 for rare earths of which we could barely imagine. As Mr. Bromby writes, when it comes to REEs: “the sky is the limit”…
So what happened to cause the REEL to trend downward? Sector leader Molycorp Inc. (NYSE MKT: MCP) was down -18.23% for the month of August, closing at $6.10 on an average volume of over 7 million shares. The stock price of the sole REO producer in the Western hemisphere has been as high as $14.44 and as low as $4.70 over the past year…
Summer doldrums as Ty Dinwoodie wrote in his Graphite & Graphene roundup? On August 8th, Molycorp announced Q2 financials that were below market expectations coupled with the class-action lawsuit on the 20th. This said, we saw a recovery starting to happen by the end of the month and we continue to stress sustainability and support towards the only US company that produces rare-earth metals.
Australia’s Lynas Corporation Ltd. (ASX: LYC | OTCQX: LYSDY) was down -3.7% in August on the Australian exchange and -2.97% on the US exchange. The company made two announcements in August — on August 12th Lynas announced it has appointment Jean Claude Steinmetz as its new COO and on August 20th, Lynas announced the retirements of David Davidson and Dr. Ziggy Switkowski…so what really happened in August?
Earlier in the month I conducted an interview with REE guru Professor Dudley Kingsnorth and, looking forward, he had the following to say about both Molycorp and Lynas: “For the past 12 to 15 months we’ve been waiting for Lynas and Molycorp to finally ‘trip the switch’ and start producing rare earths. That’s happening now and I believe this is going to lead to a great rejuvenation and rebirth of the rare-earths industry. Things are going to change with Molycorp and Lynas coming online. We are now going to have diversity in supply that we haven’t had in 15 years… All the money that’s being invested in finding alternatives to rare earths, in my opinion, within the next three to four months, is going to revert to finding new applications for rare earths. I believe that Lynas and Molycorp are going to surprise us with some of the volumes they’re producing – and selling – over the next six to 12 months because there is a lot of support for alternatives to China.”
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Even in my interview with everybody’s favourite REE pundit Jack Lifton (not surprisingly) the number-one viewed piece on all of InvesterIntel for August — Jack suggests a rare earth market poised for recovery and strength building. In his from-the-trenches report from the China Rare Earth Summit Jack discusses China’s extreme shortage of both terbium and yttrium.
Statistically speaking, Cache Exploration Inc. (TSXV: CAY) hit the jackpot and was the top performer in August, with shares gaining +100% for the month. Cache is advancing its Quinn Eskay Goild-Silver-Copper property, located north of Stewart, BC; however, on August 8th, Cache reported molybdenum results from drilling at the Welsford Inner Property in southern New Brunswick may have been the catalyst for this movement.
After a flat performance in July, Minco Plc (AIM: MIO) had a truly spectacular August, increasing +72.22% for the month. On August 30th, the company reported interim results for the half year, ending June 30th 2013. Earlier in the month, Minco announced it had appointed Warren MacLeod and Dennis MacLeod (both from Buchans Minerals) as new Directors to the Board.
Critical Elements Corporation (TSXV: CRE) had a strong showing, up +42.86% in August, on little news. Critical Elements announced on August 6th that it had retained SGS Minerals Services in Lakefield, Ontario to complete optimization study on its 100% owned Rose Tantalum and Lithium project in Northern Quebec. We are queued for an interview this month — so perhaps this is just a glimpse of what we should anticipate this Fall?
Matamec Explorations Inc. (TSXV: MAT | OTCQX: MHREF) was up +40% and +27.40% on the Canadian and US exchanges respectively for the month. On August 8th, the company announced that it received $565,769 from TRECan for completion of Kipawa Feasibility Study. On August 13th, Alessandro Bruno wrote a piece about Matamec’s Kipawa REE project proceeds toward 2016 production with support form partner Toyota and on August 19th, the company made two announcements – first, that Matamec and Canada Strategic Metals had reached agreement for the Sakami Gold Project and, second, that Matamec had reported its second quarter 2013 financial results.
Matamec also showed the rest of the market that ‘you snooze, you loose’ and on August 22nd, the company announced a September 4th analysts conference call, hosted by the company’s management team, to discuss the Kipawa Feasibility Study results.
Speaking of a proactive marketing player, U.S. Rare Earth’s Inc. (OTCQB: UREE) increased an impressive +23.91% in August after announcing it has the most accessible critical rare-earth deposit in North America. We ran a piece titled US Rare Earths is addressing the issue of US self-sustainability in critical and heavy rare earths and an interview with US Rare Earths CEO and Director Kevin Cassidy, in which Cassidy details how he intends to create an independent US source of critical rare earths.
The company announced the appointment on US General Tommy Franks, former Commander-in-Chief, United States Central Command, to US Rare Earths Board of Directors on August 28th and adding another household name to the company’s ever-growing list of power players. There are more major announcements expected from UREE in the coming weeks.
Crossland Strategic Metals Ltd. (ASX: CUX) gained +20% for the month, kicking off August with 2 pieces on the 6th: Crossland announced it had appointment Mr. Sia Hok Kiang to the Board of Directors and later that day, the company announced it had executed a funding agreement for advancement of the Charley Creek REE Project.
Their news did not go unnoticed and Alessandro explained what this means for investors in a piece titled: Crossland establishes valuable Malysian links to further advance Charley Creek.
Focus Graphite Inc. (TSXV: FMS | OTCQX: FCSMF) was up a solid +17.83% in the US and +17.24% in Canada on some major news announcements this month. Ty Dinwoodie literally just posted a feature on Focus titled Focus Graphite reigns supreme despite sector’s ‘summer doldrums’ that provides extensive coverage…
Galileo Resources PLC (AIM: GLR) was up +17.31% for August on no news, but we published a piece on July 24th that may explain the interest titled: Galileo Resource’s carbonatite and ‘suite of resources’ advantage. On July 26th, my interview with Colin Bird, Chairman and CEO for Galileo provided InvestorIntel viewers with an update on the company’s flagship property – the Glenover Phosphate concession – and that the phosphate is now subordinated to rare earth elements is also enlightening.
On other news in August Northern Minerals Limited’s (ASX: NTU) Managing Director and CEO, George Bauk, provided the InvestorIntel audience with an exclusive update on his company’s recent (very) good news: Debt free with $58m for Northern Minerals’ heavy rare-earth play. Speaking of Australian advanced REE plays, you won’t want to miss the scandium article we did, featuring Metallica Minerals Ltd. (ASX: MLM) and the First Lady of Scandium, Dr. Nataliya Hearn: Metallica’s scandium oxide market is a market waiting to happen.
Dan McGroarty’s superb piece on the heavy REE Holmium, its lack of supply and its applications in defense weapons platforms; as well as my interview with Dan regarding his testimony before the US House of Representatives concerning the EPA’s latest action on US supply of critical materials.
In case you missed it, one of the most popular commentary articles published last month was Robin Bromby’s Confessions of a Rare Earth pundit wannabe; offering a lighter side to our otherwise tough-minded and beloved journalist.
Here are your numbers for the month:
An accomplished entrepreneur and corporate finance professional, Tracy Weslosky is the CEO for InvestorIntel Corp. and the VP of Business Development for Bellotti Capital Partners ... <Read more about Tracy Weslosky>