Stans Energy en zware REE's

Stans Energy (RUU) could be the real winner in rare earths race
10/18/2010 5:39:30 PM | Matthew B. Smith, theinvestar.com
1637 Reads | 8 Comments
Value lays in its historic mine
This first leg up in the young and vibrant rare earth bull market has given birth to many newfound skeptics on the industry. It is our firm belief that these very skeptics are now laying the very foundation of the proverbial ‘wall of worry’, which we will next stampede over.
At this point, rather than focusing on industry-wide investing, it is our opinion that company specific events will provide the most upside, thus starting now we will begin to shed light on the most exciting and lucrative opportunities in the sector.
We have constantly stated we believe investors can use the most recent uranium bull market as a blueprint for where the rare earth bull market will take us. To further that idea, we believe that the rare earth mining industry will mirror in development to that of the uranium market only a few years back. Aside from Mountain Pass, as it stands now, we do not see anyone else actually getting into full production before 2015 in North America. In Africa we see the possibility of at least two mines getting into production before then with potentially another in Europe. Australia will have two, and Asia we think could have three.
Low cost Asia should be a cornerstone of anyone wanting to invest in near-term production not currently being fairly valued by Bay Street or Wall Street. We believe that someone will rise out of Asia much like UrAsia did during the uranium boom. Investors worried about its properties due to perceived geopolitical risks, however due to the fact it quickly got into production with low cost assets, it quickly became a billion-dollar entity.
From our extensive research, we are of the opinion that Stans Energy Corp. (TSX: V.RUU, Stock Forum) provides one of the most intriguing investing opportunities for investors. The company could have the past producing open pit Russian rare earth mine, Kutessay II, located in Kyrgyzstan, up and running in late 2012. Their mine produced REEs for the former Soviet Union with half of production being the truly valuable heavy rare earth elements (HREEs).
The company has begun some exploration efforts to further understand this extraordinary project. They will test the depth of the mineralization at the mine as the Russians never tested more than 25 meters below the bottom exploration drift, even though the deposit is widening to depth. According to Robert Mackay, CEO of Stans Energy Corp., this was due to the fact that, “they had 72 years of mine life when they started the mine based on 300,000 tons a year.” Mr. Mackay also indicated that the Kyrgyz Ministry of Resources has issued a 25-year mining license associated with the mine and it is fully permitted to re-start operations. The mine is currently the only HREE mine outside of China fully permitted for operations, thus putting the company years ahead of many of their competitors.
Stans Energy is on friendly terms with the government in Kyrgystan and has, “had nothing but positive experiences when dealing with the Kyrgyz government,” according to Mr. Mackay. The country wants new mines, foreign investment and jobs for its citizens. Also of significance the country recently held elections, which we have been informed went smoothly.
The company is testing a new zone 500 metres southwest of Kutessay II, and we believe they will find further rare earth mineralization similar to that found at the old mine. We believe that the project may contain further zones (much like the one the company has drilled) to increase resources. Investors will know for sure about further areas of exploration interest later this year as the company will be undertaking a complete geophysical survey over the 40 sq. km area of the Aktuyz Ore Field in the fall.
The exploration is certainly an exciting part of this project, however we think the real value in Stans Energy lies in the historic mine. Most of the buildings are there, along with a mill and according to Mr. Mackay, “the equipment used at KCMP is still used today in the industry and it is all titanium and stainless steel so it was overbuilt like many Soviet plants.” The company also has the metallurgical process the Soviets used to extract the rare earths, which they will use as a building block to increase their extraction rates via new technology and chemicals.
Stans Energy should also be releasing a JORC resource estimate for the Kutessay II open pit mine, which should be one of the most detailed resource estimates most investors will see in their life. Samples were gathered from the mine wall as well as from underground access points that go the length of the mineralization. Stans will know exactly what REEs are where in the mine along with detailed ore grades. When the Russians discovered this deposit, they determined it had 72 years of mine life at 300,000 tons a year. The deposit was mined for 30 years, so close to 2/3 of the deposit is left for Stans. The historical tonnage on the project was 51,500,000 kgs of REOs.
It is our opinion that the company reaches production in 2013, due to their in-place infrastructure and permits as well as location. Mr. Mackay says that the, “best case scenario would be production in late 2012,” so we are confident with our number. Further, this puts Stans Energy on track to be one of the first HREE mines to production. We believe that Stans will be one of the few REE players to reach the production threshold, and one of the first to deliver significant quantities of REEs while prices are still high for the LREEs and the easy supply contracts for HREEs are available, thus at current levels the stock is underpriced. Over the next six months shares in Stans Energy could easily approach C$1.00 per share as the story gets out regarding their near-term production profile.
We believe that the stock is poised to move significantly higher in the short-term due to the company generating significant news flow. The company should be releasing the JORC resource estimate soon, has the potential to add further deposits to the project through exploratory drilling on the seven domes they know are there due to the Russians and any further areas they may discover, and has all of the necessary licenses to get the mine up and running. Due to the tremendous groundwork the current management team has done, Stans Energy could be one of the biggest winners in this young rare earth bull market.

Disclaimer: Mr. Smith does hold a small position in Stans Energy at this time
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http://www.stansenergy.com/

Het Europese 'Bakken': 100 miljard barrels onder Parijs

Paris Oil Drillers Target 100 Billion Barrels Near Brie, Wine  By Tara Patel - Oct 8, 2010 1:01 AM GMT+0200

A crude oil storage tank stands at the Vermilion Energy Trust pipeline and storage site in Vaudoy-en-Brie, near Paris. Photographer: Antoine Antoniol/Bloomberg
Patrick Monget, district head of Vermilion Energy Trust, turns a valve on a crude oil pipe at the company's pipeline and storage site in Vaudoy-en-Brie, near Paris.
Pumpjacks operate at the Vermilion Energy Trust pipeline and storage site in Vaudoy-en-Brie, near Paris.
Pierre Henry farms wheat and corn east of Paris in an area famous for its Brie cheese. The next big hit might be crude oil.
Henry’s farm, 78 kilometers (49 miles) from the French capital, sits atop what geologists call the Paris Basin, an area bordering Champagne and Chablis vineyards that struck oil in 1958. Henry leased a field to Exxon Mobil Corp. in 1985, which drilled wells that have pumped for a quarter century.
These days Vermilion Energy Inc., Toreador Resources Corp. and partner Hess Corp. are targeting a bigger prize, oil trapped in Paris Basin shale rock that was previously too hard to tap. Techniques developed to pulverize rock and release petroleum have revolutionized exploration and boosted U.S. natural gas production 20 percent since 2006. Vermilion said it has had “positive” results so far in the area.
“If the Paris Basin was in West Texas it would already be drilled and would have pretty substantial production,” Craig McKenzie, Toreador’s chief executive officer, said in a telephone interview in August.
Geology of the basin, a saucer-shaped rock formation extending over 140,000 square kilometers (34 million acres), is similar to the Bakken Shale in North America. While the Paris Basin may hold 100 billion barrels, it’s unclear how much is recoverable, according to the French Energy Ministry.
Last year, conventional oil output from wells around Paris declined to about 10,000 barrels a day, a quarter of the peak in 1988. Shale oil production around Paris may rise to about 50,000 barrels a day by 2020, according to Bernstein Research.
‘Positive Results’
New York-based Hess in May agreed to invest $120 million to help Toreador, based in Paris, search 800,000 hectares (1.97 million acres). Toreador plans a well this year about 50 kilometers away from Henry’s farm near the Napoleonic battle site of Chateau Thierry. Vermilion has over 176,000 acres and plans further tests in the region.
Toreador shares have risen 52 percent in New York trading since the agreement with Hess was announced on May 10, while Calgary-based Vermilion is up 23 percent in New York. The Morgan Stanley World/Energy index has dropped 3.1 percent.
Vermillion’s well is “clearly encouraging” for Toreador, Thomas Martin, analyst at Stifel Nicolaus who has an “overweight” rating on Toreador, wrote in a June report. The potential of shale oil production would provide “significant upside” for Toreador shares, he said. Martin declined to comment for this story.
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http://seekingalpha.com/article/244178-toreador-resources-how-the-paris-basin-shale-oil-play-was-discovered?source=yahoo

TAG Oil gaat horizontaal boren in Nieuw Zeeland

GMP puts $225 target on TAO oil play
10/16/2010 3:28:37 PM | Peter Kennedy
4462 Reads |
“The oil is there – it’s just a matter of unlocking it ,’’ GMP analysts said in briefing.
Resource analysts at GMP Securities Europe LLP are clearly optimistic about the outlook for Tag Oil Ltd. (TSX: V.TAO, Stock Forum), a junior oil and gas firm with operations in New Zealand.
In an email to Stockhouse, GMP’s U.K. analyst Peter Nicol insisted that the investment firm has no formal rating on TAG and has not completed any official research on the company.
However, in an April 21 internal sales briefing obtained by Stockhouse, Nicol and fellow GMP analyst Toby Pierce estimated that TAG would have an un-risked value of approximately $225 per share if the company can unlock the potential of its unconventional oil shale plays on New Zealand’s North Island.
“The oil is there – it’s just a matter of unlocking it,’’ the analysts said.
On the same day (April 21), TAG revealed that GMP was leading an underwriting syndicate that aimed to raise $17.4 million from the sale of 6.7 million $2.60 units, each of which was comprised of one common share of TAG and one-half of one common share purchase warrant.
The warrants are exercisable at $3.60 each and entitle the holder to acquire one common share for a period of 18 months following completion of the offering on May 5. When the over-allotment options were taken up, proceeds of the financing reached $20 million.
After closing on Friday at $4.38, TAG shares trade in a 52-week range of $4.64 and 64 cents, giving the company a market value of $165 million, based on the 37 million shares outstanding.
Based in Vancouver, TAG is a company that specializes in extracting oil from finely-layered soft rock or mud. This kind of environment is known as fractured shales because in many areas the layers are largely shattered or ‘fractured material.’
The TAG operations are centred on New Zealand’s North Island. They are comprised of oil and gas production and exploration in the Taranaki Basin on the west side of the island, and exploration activities on the East Coast Basin on the east.
TAG has 2.2 million acres across its five permits and 490 barrels per day net of production in this area.
According to two independent engineering evaluations by Calgary firms Sproule International Ltd. and AJM Petroleum Consultants, the two basins have 14 billion barrels of original oil in place (OOIP) identified on less than 10% of the company’s land base. It is this that is attracting attention in investment industry circles.
In the April briefing, GMP’s Nicol and Pierce gave their top three reasons to own the share. They include:
Prospective acreage and billions of barrels in place in the region.
TAG’s wide varied portfolio, ranging from low risk development to higher risk exploitation and exploration.
Upcoming activity, including future drilling in the Taranaki and East Coast basins.
“On very conservative numbers, we estimate that TAG will have a core NAV (following the May financing) of roughly $1.44, which consists of approximately 74 cents in cash and proven and probable reserves/resources of roughly 77 cents,’’ the GMP analysts said, adding that these reserves are currently in production.
The analysts went on to say that their risked value per share of TAG is roughly $14.82 following the $20 million May financing. But if TAG can unleash the potential of its unconventional oil shale plays, their unrisked value per share is worth over $225, the analysts said.
Meanwhile, Kevin Shaw of Wellington West Capital Markets Inc., initiated coverage of TAG on September 20 with a speculative buy rating and a $3.80 target price.
After closing its recent financing, Shaw said the company is gearing up for sizeable work programs in the next two years in the Taranaki Basin.
“With $26 million in working capital and no debt, TAG is in a strong financial position to move forward with an initial Taranaki basin development and exploration program,’’ Shaw said.
In the three months ended June 30, 2010, TAG reported production revenue of $1.8 million, an increase from $588,818 a year earlier. Net income in the quarter was $119,439, or $0.00 per share compared to year earlier loss of $170,055 or $0.01 per share.
The company’s production revenues are generated by producing wells in the Cheal oil field in the Taranaki Basin, which produced an average of 294 barrels per day during the quarter ended June 30, 2010.
In the short term, the Taranaki basin is expected to be the primary focus for TAG as it bids to ramp up production revenue. It covers an area of about 100,000 square kilometres and remains relatively under explored, with only 125 wildcat being drilled since 1955.
TAG has already identified more than 30 initial drilling locations in Taranaki to further explore and develop its two key land permits, Shaw noted in his report.
However, analysts say the potential for the discovery of resources in the future is expected to be much greater in the East Coast Basin, where TAG has a 100% working interest in three permits covering two million acres of undeveloped land.
“Even though it is still early days for the widespread unconventional oil shales which have been identified on these permits, the East Coast basin can be compared with both the Bakken shale play in North American and the Paris Basin Liassic [in France],’’ said Shaw.

ABOUT THE AUTHOR
Peter Kennedy is a Stockhouse reporter and web content editor
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http://www.tagoil.com/video_Drew-Cadenhead.htm

Tantalum, Tin en Gippsland (GIP.AX)

Abu Dabbab Tantalum
Introduction
The 44.5 million tonne Abu Dabbab tantalum-tin-feldspar deposit is located within the Central Eastern Desert in Egypt. The deposit is located about 16km inland from the western shore of the Red Sea. The deposit is covered by two Exploitation Leases (1658 & 1659) granted in the name of Tantalum Egypt JSC, a company incorporated in Egypt and owned 50% by the Egyptian Government via the Egyptian Mineral Resources Authority (EMRA) and 50% by Tantalum International Pty Ltd which is a 100% owned subsidiary of Gippsland Ltd.

Tantalum applications
Tantalum is a grey metal, classed as a refractory metal because it is resistant to chemical attack. For industrial use, its important properties are a high melting point, ductility which allows it to be drawn into wire, and malleability which allows sheets and tubes to be made. Once exposed to air, the metal is covered with a thin layer of oxide which allows it to resist fluids in the human body, and also acids and other corrosive liquids, in the chemical industry. It has a high dielectric, which makes it so valuable in capacitors for the electronics industry. Tantalum capacitors form an integral component in the production of mobile telephones, telecommunication infrastructure, laptop computers, auto-electrics plus still and video digital cameras.
Because of the metal’s resistance to corrosion it is used in chemical plant and equipment. Its high melting point (2,997°C) and low thermal coefficient of expansion make it a crucial component of jet engine turbine blades. As tantalum carbide, one of the hardest substances known to man, it is used for cutting tools.

Tantalum Market
The majority of the world’s tantalum is sold by way of long-term offtake agreements between the miner and the tantalum refiner/metal producer. Tantalum is not sold via a regulated market as is for gold, copper, zinc and tin. The global tantalum Ta2O5 market is estimated to be in the order of 5 - 7 million pounds per annum. Industry commentators suggest that the market is growing at a rate of about 7% per annum.
HC Starck GmbH, is generally considered to be the world’s leading tantalum concentrate consumer/processor followed (not in order) by Cabot Corporation (USA), Ulba OJSC (Kazakhstan), Mitsui-Kinzoku (Japan) and Ningxia Non-Ferrous Metals (China) plus various other Chinese groups.

Previous exploration
Tin-tungsten mineralisation at Abu Dabbab has been known since the 1940s but it was not explored until the early 1970s when a joint Soviet-Egyptian team, completed an extensive exploration programme. In the early 1990s the project was further explored by a joint venture between the Egyptian Government and Geominera Italiana. The previous work included 28 diamond drill holes, three adits, one crosscut, numerous trenches, surface sampling, bulk sampling and metallurgical tests. Gippsland carried out some re-sampling of the adits to verify the previous results, collected bulk samples totalling 43 tonnes which were used to conducted additional detailed metallurgical test work in Australia. Encouraged by the results of the test work, Gippsland commenced a Bankable Feasibility Study which was completed in October 2004 and updated in September 2008 by the international engineering Group Lycopodium Pty Ltd.

Geological setting
The Ta-Nb-Sn mineralisation of Abu Dabbab is represented by disseminated cassiterite and niobio-tantalite, hosted in a stock of apogranite. The apogranite at Abu Dabbab is leucocratic, holocrystalline, white grey to greenish blue and with manganese oxide spots and dendrites. It is mostly fine to medium grained and occasionally has a porphyritic texture.
The characteristic alteration processes in the apogranite are greisenisation, microclinisation, silicification and albitisation.
The shape of the host apogranite intrusion is generally ellipsoidal except in the north-western part where there is a narrow off-shoot, about 150m in length. The apogranite mass is elongate in an east-west direction with a maximum length of about 400m. Maximum width in a northeast-southwest direction is nearly 200m. The body extends about 130m above the level of the adits and has been intersected in drilling at a depth of 350m below the adits.
No significant disseminated mineralisation is present in the country rocks surrounding the intrusive mass, therefore the ore deposit limits correspond to the limits of the apogranitic body.

Resources
Abu Dabbab Mineral Resources (100g/t Ta2O5 cut-off)

Category Million Tonnes Ta2O5 (g/t) Sn grade(%)
Measured Mineral Resource
15.2
290
0.143%
Indicated Mineral Resource
17.3
250
0.078%
Inferred Mineral Resource
12
200
0.03%
Total Mineral Resource 44.5 250 0.09%
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Profiteren van tekort aan tin

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BNP Paribas forecasts shortage of copper and tin
Thursday, 14 Oct 2010
Analysts from French bank BNP Paribas forecast that Global supply of copper in 2010 to 2012 will be below demand.

According to the bank’s assessment, this year the shortage will be 50,000 tonnes next year it’ll increase to 400,000 tonnes but in 2012 decrease to 150,000 tonnes. Production of refined copper this year is expected at the level of 18.75 million tonnes next year 19.45 million tonnes in 2012 20.75 million tonnes. Consumption is estimated correspondingly at 18.8 million tonnes, 19.85 million tonnes and 20.9 million tonnes.

In the world tin market shortage in the current year is expected at approximately 17,000 tonnes and in 2011, 20,000 tonnes. Production of refined tin in accordance with the bank forecast is 327,000 tonnes in 2010 and increase to 340,000 tonnes in 2011. The demand to grow from 344,000 tonnes to 360,000 tonnes correspondingly.

In the world aluminum market a balanced supply and demand situation may form by 2012 after 5 years of oversupply. Zinc excessive supply will be kept through 2010 and 2011.

(Sourced from FinMarket)
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Investeren in puur lithium

Talison Lithium to Commence Trading on TSX Under Symbol "TLH"
WORLD'S LARGEST PURE LITHIUM PRODUCTION COMPANY BEGINS TRADING
Highlights
- Merged entity brings the world's largest, high quality, low cost lithium minerals producer located in Australia together with a highly prospective, large scale lithium brine exploration portfolio in Chile
- Diversified exposure to lithium chemical production from minerals and potential brines
- Major lithium supplier to the rapidly expanding Chinese market, now the largest globally
- Ability to rapidly respond to the growing demand for lithium for electric vehicle batteries
- Proceeds of $38,074,064 under Subscription Receipt private placement released from escrow to the merged entity to fund growth
- Fully funded to expand current production and accelerate lithium chemical production

Press Release Source: Talison Lithium Limited On Thursday September 23, 2010, 7:00 am EDT
TORONTO, ONTARIO--(Marketwire - Sept. 23, 2010) - Talison Lithium Limited ("Talison") (TSX:TLH - News) is pleased to announce that in connection with yesterday's completion of the plan of arrangement (the "Arrangement") between Talison and Salares Lithium Inc. ("Salares") (refer to press release dated September 22, 2010), it is anticipated that Talison ordinary shares will commence trading on the Toronto Stock Exchange under the symbol "TLH" at the open of market today.
The completion of the Arrangement and the listing of the Talison ordinary shares satisfied the conditions for release from escrow of the proceeds from Salares' previously announced private placement of 31,128,515 subscription receipts (the "Subscription Receipts"). Pursuant to the terms of the Subscription Receipt Agreement governing the terms of the Subscription Receipts, proceeds of $38,074,064 have been released from escrow to Salares and each Subscription Receipt was exchanged for 0.35587 of a Talison ordinary share. All previous security holders of Salares now hold comparable securities of Talison (or the equivalent in Talison exchangeable shares) based on the exchange ratio under the Arrangement.
Talison has now combined its' world class lithium minerals production in Australia with Salares' prospective, large scale lithium brines exploration project in Chile. The combined entity is well-funded, allowing for immediate expansion of the producing Australian operations to run in parallel with an accelerated exploration program at the 'Salares 7' brine project.
Immediate production expansions at Talison's Australian operations are required to satisfy substantial growth in lithium demand from Chinese battery producers, for whom Talison is the primary supplier. This demand has been driven by government policies encouraging alternative energy vehicles in pursuit of energy security, reduced reliance on oil imports and environmental objectives. Additional large scale production expansion is also being pursued by Talison to meet the anticipated global growth in the lithium market.

Talison now has:
-- An attractive diversified mix of lithium mineral and brine assets in
both Australia and Chile:
-- Combination of the high quality, low cost Australian based lithium
minerals production with promising lithium brines exploration
properties located in Chile;
-- Multiple actionable growth strategies, including:
-- Expansion of existing lithium mineral production capacity by over
60% (currently in progress) to support the growing Chinese battery
market;
-- Potential low cost lithium carbonate production from minerals
conversion to supply major battery producers and vehicle
manufacturers globally; and
-- Future potential lithium carbonate production from prospective
Chilean brines;
-- Access to an extensive global customer network, established over a 25-
year lithium operations history, with the leading position in the
growing Chinese battery market; and
-- Board of Directors and management team with the skills and extensive
experience in the technical and commercial aspects of project
development, production and marketing of lithium.

Yukon goud stijgt de pan uit

Op basis van dit bericht steeg Atac van ca 2 naar ca 7 CAD, bij ca CAD 7 was de beurswaarde bijna een half miljard....!!!
Het bericht was natuurlijk mooi, maar het zal nog vele jaren duren voor we weten hoeveel goud er zit en of er ooit een mijn komt.

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Press Release Source: ATAC Resources Ltd. On Wednesday September 1, 2010, 8:30 am EDT
VANCOUVER, BRITISH COLUMBIA--(Marketwire - 09/01/10) - ATAC Resources Ltd. (TSX-V:ATC - News) is pleased to announce that the first diamond drill hole at the Osiris Target on its Sten claim block has intersected 9.26 g/t gold over 31.13 m within a larger interval that averaged 4.65 g/t gold over 65.20 m. Assays from the remaining 98 m of the hole are still pending. Significant intervals for the top portion of OS-10-01 are tabulated below:

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Hole ID Dip From (m) To (m) Int. (m) Au (g/t)
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OS-10-01 -50 7.62 16.38 8.76 1.81
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56.08 121.28 65.20 4.65
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incl. 72.20 103.33 31.13 9.26
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Reported intersection widths are drilled thicknesses. True widths are not
known as mineralization appears to be controlled by both bedding and
structure.

The Sten claims are situated at the eastern end of ATAC's wholly-owned 1400 sq/km Rau Gold Project in central Yukon - about 100 km east of the Tiger Zone, which has been the focus of most of the Company's exploration efforts to date.

Mineralization in the Osiris Target area shares many of the characteristics of Carlin-type gold deposits, including similar alteration assemblages and association with the low temperature arsenic sulphides, realgar and orpiment. Host rocks are two, 150 to 250 m thick limestone debris flow and turbidite units, referred to as the Osiris and Isis Horizons, which occur within basinal silty mudstones.

Drill hole OS-10-01 has partially tested a 150 by 500 m gold-arsenic soil geochemical anomaly over the Osiris Horizon where 60% of the soil samples grade in excess of 1 g/t gold. Preliminary prospecting has identified gold-bearing talus and in-situ mineralization intermittently for an additional 2.1 km along strike. Grades of surface grab and bedrock samples range from 1.95 g/t gold to 39.2 g/t gold. The vertical extent of observed bedrock mineralization is in excess of 300 m.

The Company has accelerated its exploration efforts in the Osiris Target area:

-- Four of six drill holes, which will test a 300 m wide section across the
Osiris Horizon have been completed to date;
-- Prospecting is ongoing and a 4.5 sq/km soil geochemistry grid extension
is underway; and,
-- Drill pads have been constructed to test the Isis Horizon that lies 100
m above the Osiris Horizon, where prospecting has returned grab samples
ranging from 1.48 to 23.90 g/t gold within a 150 by 900 m gold-arsenic
soil geochemical anomaly.

"Initial results from the first Osiris drill hole have confirmed the Company's belief that the Rau Gold Project covers a new gold district," states Graham Downs, ATAC's CEO. "We have completed a 1400 sq/km detailed stream sediment sample survey, covering 160 km of strike length. Initial results of that work are very encouraging and numerous targets for follow up work in 2011 have already been identified. Drilling will continue at the Osiris and Tiger Zones and other new targets as long as weather permits."
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Oliezand in Canada

Spotgoedkope overnamekandidaat in deze sector:
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Connacher Oil and Gas Limited Announces Algar Production Ramp Up Progressing on Schedule; Daily Production at Algar has Surpassed 5,000 barrels per day; Combined Bitumen Production at Great Divide Has Exceeded 12,000 barrels per day.
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Gevaarlijke hype aan de gang in REE-aandelen

Molycorp: Rare and In Demand

by: Paul Goodwin

September 27, 2010 | about: MCP

Headlines about “rare earth elements” or “rare earth metals” are popping up all over the place as China

is accused of cutting off the supply of these scarce commodities to Japan in protest over the arrest of a

trawler captain accused of fishing in waters controlled by Japan but claimed by China. (China denies the export ban.)

This dispute has focused a lot of attention on rare earths, highlighting how little most people know about

them and why they’re important.

I can’t repair the damage you did by sleeping through your high school chemistry class, but here’s a quick refresher (and a stock recommendation, to boot).

There are 17 rare earth elements, and each one has its uses. When cathode ray TV sets were still dominant, the element europium supplied phosphor that produced the vivid red. Rare earth magnets that use neodymium, praseodymium, samarium, gadolinium and dysprosium are much more powerful

than standard ones. Lanthanum increases the refractive index of glass, making it a popular addition to

camera lenses. Cerium is the catalyst in your self-cleaning oven. Holmium, erbium and ytterbium are used as dopants in lasers.

It’s not an important part of the story, but I was fascinated to learn that four of the rare earth elements

are named after the little Swedish town of Ytterby where they were first discovered. So we have yttrium, terbium, erbium and ytterbium, which has got to create some confusion.) These exotic elements have other uses as well, but it’s their extensive and increasing use in hybrid and

battery-driven cars that is causing tension. China emerged as a dominant producer of rare earth metals in the 1990s, and its aggressive pricing caused the shutdown of many smaller mines around the world.

But with China now producing 95% of the world’s annual production (or 96% or 97%, depending on what you read), things are getting ticklish as China—which now uses about 60% of the rare earths it produces —needs more and more of its own production. 

Even leaving out the potential for the use of these increasingly elements as a punishment for those who

tick China off, there’s the very real need for rare earths in automotive, high-tech and defense industries

in the U.S. and elsewhere.

It takes time to re-open old mines and ramp up production, but that’s exactly what’s happening in many places, including the Mountain Pass rare earth mine in southern California near the Nevada border. Rare earth deposits often contain thorium and radium, and the radiation from these elements led a uranium prospector to the Mountain Pass deposit in 1949. By the 1960s, the mine was in high gear,producing europium for color TV screens, and heavy production increased through 1995, making Mountain Pass the main source of the world’s supply. But repeated spills of wastewater with radiological contamination (plus the advent of China as a low-cost producer) caused the suspension of separations activity in 1998 and mining operations were shut down at Mountain Pass in 2002.

It has taken concerns about strategic defense needs and the very real possibility that China will reserve

more and more of its production for Chinese companies to kick Mountain Pass production back into gear, but that’s what’s happening. 4-10-2010 Molycorp: Rare and In Demand -- See… seekingalpha.com/…/227298-molycor… 1/2

So my stock pick of the week is Molycorp (MCP), which is pumping $500 million into the reopening of the

Mountain Pass mine. Molycorp has actually been processing new output since 2009, using existing stockpiles of the

bastnasite ore concentrate left over from earlier operations. But with the infusion of new cash, mining

operations are scheduled to resume in 2011.

Mountain Pass has an estimated 2.21 billion pounds of proven and probable rare earth oxides with an

average 8.24% ore grade. And Molycorp has a 30-year mining permit (and an associated environmental impact report) issued at the end of 2004. Molycorp’s bottom line has been a bunch of quarterly losses, to date, which is just what you’d expect from a capital-intensive industry and a development stage company.

But the story is so compelling that the stock, which came public in late July, has already nearly doubled,

with today’s China vs. Japan headlines only stoking the flames. Is it speculative? Of course. It’s a mining operation and the company hasn’t made a cent yet.

If you decide to take a flier on this one, keep it small and average up as you get a little profit cushion to

work with. It’s going to be a bumpy—but fascinating— ride.

Disclosure: None 

4-10-2010 Molycorp: Rare and In Demand -- See…

seekingalpha.com/…/227298-molycor… 2/2

Het koperdraadje

Could easily hit $9,000 a ton in the next year

Forget gold for a moment and let’s focus on copper instead. It’ll be well worth the time…

Earlier this year, copper prices fell 25% from its 2009 rally on fears of a double-dip recession. Those fears have eased enough at least to let the commodity bound back up to $7,700 a ton on the London Metals Exchange (LME).That puts it only 3% from a two-year high and not far from its all-time peak.Sometimes called “Doctor Copper,” you could say it has a PhD in economics as it oftentimes signals strong growth trends. When countries start buying it up, they usually do so to advance national power grids, plumbing for new buildings and mass production of electronic goods.Just look at the sectors that bought the most copper last year. Construction firms used 48%, manufacturers of electrical and electronic appliances used 20%, transportation 10% and the power sector 5%.In other words, economies that can’t get enough of copper are growing. And considering who’s buying it up these days, copper prices should keep going up as well.

China stockpiles copper… Is a shortage coming?

Last year, China used the most copper, with 28% of demand. Europe came next with 25%, the U.S. with 14%, Japan with 5% and the rest of the world used 28%.And recent data coming out of China shows demand picking up.Copper imports jumped 10.7% last month. And the country even imported 5.3% more copper scrap, reclaimed from buildings and such.Many bears say China is only stockpiling copper. But if so, it has good reason to do so.The Chinese see copper inventories at the LME declining steadily since February. Normally, they rise during the summer months, but instead, they’ve declined 25%.They believe a major copper shortage is coming, which is why they’re stocking up on it. Investors should take careful note.

Real story on copper

For the real story on copper, you have to turn to the supply side of the equation.Superstar copper mines of the 1980s, like Chile’s Escondida, likely already saw their best days. And overall, few industry insiders believe there is enough new production coming on-stream in the next few years to meet even a very modest increase in demand.Even if the global economy falters again, the balance between supply and demand doesn’t look bearish. Too many past years of disappointing production have seen to that.In the first half of 2010, the world’s four top listed global copper miners – Freeport McMoran (NYSE: FCX), BHP Billiton ADR (NYSE: BHP), Xstrata ADR and Rio Tinto (NYSE: RTP) – saw their collective output drop 12% from 2009.State-owned Chilean Codelco, the world’s largest copper producer, said in May that it expected similar output in 2010 to the previous year; hardly a good sign. And overall, the copper mining industry has undershot production expectations by an annual average 6% in the past five years.Much of the problem stems from lower quality ore. After years of intensive output, many mines developed in the 1980s now produce ore with ever-lower copper content. This means they have to work harder just to keep output steady.Still, even lower-grade ore is in high demand. Morningstar predicts that “60% of today’s open pit mines will deplete or go underground [at much higher costs] by 2021.”Two decades of low prices gave most big mining companies little incentive to invest in finding new deposits. Plus, Wall Street bankers didn’t easily sign over loans to these businesses, choosing to invest in more glamorous opportunities instead.And copper mines take as long as 15 years to start producing from the initial investment. So there is very little that can be done to match consumption for the next five years or so.

Copper investments

Despite fears over the global economy, copper demand remains robust while supplies dwindle… an ideal investment situation.This new norm means higher copper prices in the years ahead. The metal could even easily hit $9,000 a ton in the next year or $10,000 a ton in the next few years.CEO Tom Albanese of Rio Tinto captured both the supply and demand sides when he said of the company’s 2010 first half results, “We could have sold more copper if we’d had it.”Yet his company and its main rivals mentioned earlier should all profit from the trend. So should two particular ETFs, Global X Copper Miners (NYSE: COPX) and First Trust ISE Global Copper Index Fund (NYSE: CU).Or there’s the iPath Dow Jones-UBS Copper Subindex Total Return ETN (NYSE: JJC), which tracks the price of copper futures on the COMEX.But one way or the other, the copper market looks bullish for some time to come.

Disclosure: The author does not hold positions in any of the stocks mentioned

bron: Stockhouse 4 oktober 2010

http://www.stockhouse.com/Columnists/2010/Oct/4/Copper-market-heats-up