The Rare Earth and Critical Mineral Market Shuffle: November REE Leaders Down -14.41%
ProEdgeWire Rare Earths & Critical Minerals November 2012 Month-in-Review: November 2012 was a month of senior talent transitions, highlighting impressive appointments and dramatic resignations, as ProEdgeWire: Rare Earths & Critical Minerals members were down on average -13.75%, the REE Leaders Index was also down -107.96 points or -14.41%.
Starting with The Great Western Saga on the 21st of November when Great Western Minerals Group Ltd. “…announced the resignations of three long-standing Company Directors, Gary Billingsley, Jim Engdahl and Bill McKnight.” While reassured by industry experts that this was potentially a simple reorganization and that undoubtedly “Mr. Billingsley and Mr. Engdahl remain available to the Company on an ‘as required’ consulting basis to ensure their expertise can be accessed by GWMG through the transition.” Considering the value of the associated depth of knowledge of this qualified duo in an industry with a well-publicized shortage of talent, combined with the state of union, I maintain that the timing of this release was ‘shocking’ — TSXV: GWG down -23.53%, OTCQX: GWMGF down -21.28.
Spoke with Arafura Resources Limited (ASX: ARU) Richard Brescianini earlier this week, but it was prior to the November 30th announcement on the resignation of Board member Dr. Alejandro (Alex) Losada-Calderon who retires from the Arafura Board “to pursue other business interests.” Considering the market sector this month, their stock fared better than our sector overall, down –ASX: ARU 12.50%.
November 28th a relatively predictable resignation for Northern Minerals (ASX: NTU), Professor (Dudley) Kingsnorth announced the resignation as a Non-Executive Director. Dudley called me earlier this week to discuss his resignation and to provide some background on his appointment to head the new Critical Materials Initiative at Curtin University in Western Australia. “The new initiative aims to pull together governments, researchers and industry worldwide to provide independent research and advice on critical materials, such as rare earths, platinum, lithium and tungsten.”
As always, it was a pleasure to hear from Dudley and I must confess that I agree that our industry requires more leadership and talent invested in long term educational development. So congratulations Dudley…
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This said, while his intentions to resign as non-executive director are understandable and arguably commendable, Northern Minerals: ASX: NTU -25%.
Metallica Minerals Limited (ASX: MLM) announced on the 19th the appointment of mining finance specialist Cutfield Freeman & Co “to explore funding options for its SCONI project in North Queensland as it prepares to move the project to the next phase of development.” While this sounds like strong structural management decisions: ASX: MLM -27.27%.
November 14th Rare Element Resources Ltd. (TSX: RES) (NYSE MKT: REE) announced the appointment of Dr. Henry Kasaini, Pr Eng. as Director of Science and Technology effective November 12, 2012. “Dr. Kasaini possesses a broad set of engineering and scientific skills acquired over 23 years of research and industry experience in minerals processing and metals separation technologies. He specializes in the development and design of process flow sheets for complex mineral ores and assessments of capital costs and profitability of new process plants. Dr. Kasaini’s experience includes processing and separation of rare earth…” In spite of this impressive talent acquisition, they moved on par with the sector: TSX: RES -12.87%, NYSE MKT: REE -12.78.
Earlier that week, Rare Earth Metals Inc. (“Rare Earth Metals”, “REM” or the “Company”) (TSXV: RA)(OTCQX: RAREF) announced the appointment of Mr. Rojer (Qiufeng) Li as Chairman and Director. “Mr. Li has unique and extensive experience in the rare earth industry having worked closely in the complete design and build of rare earth separation facilities, assisting with many others and operating one full spectrum (light and heavy) refinery for over five years. He has personal connections with owners and general managers of more than 20 of China’s major rare earth separation refineries.” Again, no rewards for good news for share prices this month: TSXV: RA and OTCQX: RAREF -14.29%.
Certainly, the pattern in these appointments is apparent…
My last corporate professional resignation is my least favorite. Let me be frank, there is not an overwhelmingly large representation of the sisterhood in the sector. So when I received Liz Whiteway’s resignation from LYNAS on Thursday evening, I was saddened. While her resignation seemed inconsequential as she cited and distributed a note to industry friends that basically stated an interest in relocating to Melbourne, her home city to which she loves…I still felt an overwhelmingly need to challenge our sector to reflect the absence of women in our sector. Perhaps it’s because I attended the RBC Entrepreneurial Gala in Toronto this week and was reminded of the success women have in other sectors, or the CNN story this AM on how nearly 240,000 combat roles in the US military refuse to allow women to participate (note: I do not own a gun), or maybe…just because — I am a woman.
A commitment to positive messaging I did jot down my favorite quote of the week when Professor Kingsnorth said to me: “We are seeing buds of a revival in our market…” I agree, and would like to thank Dudley for allowing me to print his chart on Supply & Demand for the rare earth industry, if only to counter the market movement for November. Presented at a conference, which shall remain nameless; he asked that I not publish his presentation, but did state that I could selectively utilize tables.
In this presentation titled “The Rare Earths Industry: Comatose or In Limbo?” he says reiterates his belief that we will have a “potential shortfall in heavy rare earths supply within 10‐15 years.” – and that “China has not published the size, grade and rate of mining at its rare earths mines for many years; making a comprehensive assessment of reserves more guesswork than calculation.” With no new sources of heavy rare earths having been brought on‐line, he further states: “Due to the higher prices of the heavy rare earths most of the illegal mining and processing of rare earths in China has been focused on the ‘heavies’ – hence the depletion of the finite resources may be greater than thought a few years ago.”
On a final note, I would like to share the quote from the CEO who we will keep nameless for the email on the inevitable market turnaround who wrote: “rewards will be reaped just be patient”.
Yes, patience…I do not own one of these either.
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>