by Travis Johnson, Stock Gumshoe | October 22, 2010 9:42 am
I wrote quite a bit about one of the Greenland rare earths stocks earlier in the week, but I just wanted to clarify the situation in teaser-land a little bit today.
There are two Greenland rare earth explorers that are being actively teased by big newsletter publishers right now — the one that uses the B-52 story and talks about uranium[1] is Greenland Minerals and Energy (GDLNF on the pinks, GGG in Australia[2]), teased by Chris Mayer[3], that’s the one I covered in more detail earlier in the week.
And the second one, teased by Ian Cooper[4] for his Pure Asset Trader[5], must be Hudson Resources[6] (HUD in Canada[7], HUDRF on the pink sheets), which I first wrote about a year or so ago[8] (for a teaser from the same publisher) but is being very actively promoted again. They’re using essentially the same arguments, about the Chinese hegemony in this space and the potential for a tiny miner to supply a large part of the global rare earths market, but instead of using the hook of a company that’s got the former Prime Minister of Greenland on board with the P.S. about also mining uranium someday (that’s Greenland Minerals and Energy), they’re using the pitch that this 80 cent company that recently rose to $1.50 owns 500 square miles of the most valuable land on earth… and that 500 square mile bit is clearly Hudson Resources (their main parcel is 1,300 square kilometers, which is about 502 square miles).
I won’t get into the details about production or resources on these two stocks, because it will probably be years before that matters — both are going to trade on rare earths hype, neither is anywhere near actual permitting or mining or, even beyond that, refining or producing the valuable end product (all are difficult and specialized tasks for these ores and oxides).
There’s a reason that the teasers about these stocks talk about vast future potential and about China[9], and put the limited info about drill results at the end of the ad — there are a few rare earths companies that are close (as in, a year or two) to adding new production to the market like Lynas (LYC in Australia, LYSCF on the pinks) and Molycorp (MCP)[10], with a whole lot more that are not quite as far along but are certainly far more advanced than the Greenland guys … and there will be many more companies teased and touted after this incredible run up in all the rare earths stocks, but the fundamentals behind these picks are all very big picture and long-term, a continued run-up in the stocks depends on China and on investor enthusiasm on what have to be wild guesses about what the prices of these materials will be in five or ten years. That’s not to say that these stocks can’t quadruple from here or that they’re not worth investing in — or even that there’s anything wrong with the thesis that Chinese hegemony will probably lead to far higher prices in the next decade for these “technology metals” … but these stocks can also easily be cut in half (or more) after doubling in the past week or two, enjoy the trading if that’s your cuppa tea.
The movement in all these stocks has gotten the attention of the press, to be sure, and that continues to fuel the speculation — try any search on rare earths in any of the big news aggregators (Google News, etc.) and you’ll be quickly overwhelmed. Greenland is the flavor of the week, thanks to these newsletters and the recent revisions to the newly-semi-independent nation’s regulatory structure that might make it legal to mine rare earths there, but the next excitement could be about rare earths in South Africa[11], Central Asia[12] or Vietnam[13], to name just a few of the other places that are getting attention at the moment.
As for me, I don’t own any of these and am not a nimble enough trader to get in and out in this kind of hype very often, so I’d personally probably stick with the near-production names that I can envision actually having a business someday and maybe think of as an investment instead of a speculative trade … they seem very expensive too, but at least they might make money and produce something valuable in the next few years. Enjoy!
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I’ve been following ians advice for 3 years. I’m 55 for 60 with his pure asset picks. You’re not just getting this rare earth trade, you’re getting, what I think, is one of the best track records around. And no, I don’t know Ian personally. But he has corresponded with me and other readers that have questions.
Lynas in Australia is stockpiling now and will then ship this to Malaysia for further processing. THis starts in a few months time – not years.
I hold LYC on and ASX
good luck all
Check out Noventa Ltd (NVTA.L in London; http://www.noventa.net) a producing tantalum miner (it also produces the gemstone morganite in commercial quantities). The share price has risen nicely lately but not as dramatically as other RE companies, which makes me think that a big move is due, once the stock becomes better-known outside of the UK.
Hey, Travis
I've noticed on the promo videos if you hit the back or close button on the browser the promo will stop the video and ask if you want to read a text version. I really dislike the videos
The process material and export to Japan is only starting Q3.2011. The place where the plant is built in Kuantan, Malaysia's current Prime Minister Constituency. Federal election is due approx. between Q1-Q2.2011 and chances of current government losing during that election is high. Some element of risk involve that might affect exports.
BTW, the teaser also mentions lithium and vanadium as promising resources to invest in the mining of. About lithium a lot has been said already.
With regard to the vanadium, the mining company meant could be either Windimurra Vanadium Limited (WVL), formerly Precious Metals Australia (PMA), or Energizer Resources Inc (EGZ), formerly Uranium Star Corp. (URST), operating Green Giant Vanadium Project, Madagascar. These two are among the largest vanadium deposits in the world.
The Stansberry & Associates folks have been hyping uranium, saying that uranium stocks could be just starting a big, big uptrend. If that’s true, then some of these companies that are taking uranium out of their name and replacing it with rare earth, may soon be switching back. Here’s a link to the article: http://co115w.col115.mail.live.com/default.aspx?w…
Mining Stock Investors Are About to Get Clobbered: http://co115w.col115.mail.live.com/default.aspx?w… Molycorp will be leading the way. So say the Stansberry & Associates folks this morning.
There is another video being teaes on Greenland. I think it has to be GDLNF. On the video they are focusing a lot on Uranium, in Greenland by a tiny company in Australia.
Do you say that it is GDLNF?
Thanks
HI Everyone
I bought LYNAS over 3 years ago – it is doing well for me – I do not trade but buy with hopes of 5 or more year horizon –
best
john
I came across an excellent discjssion of the rare metals miners on a blog yesterday. Gummie is it OK to post a reference link here? Anyway the blog is raremetalblog.com and much the same misgivings were expressed ther as Gumshoe notes, regarding the long and speculative timeline to production of so many of these names. One company came up as a (well known, or little known, I don't know) exception to this point – ALKANE – which has a massive HREE and LREE resource well along in delineation and permitting in Alaska. I think it's an Aussie company, but the consensus in that blog discussion (look up the ALKANE thread there) was that outside of China actually ALKANE is right at the head of the pack in timeline to permitting and production. Would be interested to hear what other comments other contributors here have concerning this company.
If the exteemed Gumshoe host permits, here is the link to some forum member comments there in a discussion which batted ALKANE around in some depth:
http://www.raremetalblog.com/2010/10/the-goldiloc…
Er, I meant "esteemed Gumshoe", not "exteemed gumshoe". Sorry, can't read a blinking word in the text input box when writing. =:-)
i have a small position in great western minerals group GWG tsxv. it has recently come back to where it was a few years ago before the colapse of 08. why has this RE company not behaved like the rest and "run up". it is actually selling refined re products .
A Mineweb article lays to rest the idea that rare earths are rare in the U'S':
http://www.mineweb.com/mineweb/view/mineweb/en/pa…
Anything but! Hundreds of years supply.
There are tons of gold in the ocean, too. Now how much will it cost to get into a useful form?
I held Lynas for a couple of years but sold my postion recently……the large number of outstanding shares (1.66 billion) was certainly a factor. Is Lynas worth their market cap of $2.62 billion?
recent disaster events in Japan have rocked the boat for not only those poor people effected directly but the share markets as a whole.
REE share prices along with most other things have dropped. However keep in mind that Japan will do what it does best – rebuild and rebuild better.
REE's like lynas and Alkane will power on
especially with CHina clamping down on backyard operations and polluters – read on http://rareearthinvestingnews.com/3079/chinese-en…