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/

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