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An aggressive exploration program is being launched and the goal is to have everything operating at Steenkampskraal by January 2013, which is six months earlier than previously planned. Gary says: “Originally, we anticipated about mid-2013 but we have just received all our approvals from the National Nuclear Regulator in South Africa. The site not only has a mining permit but it also has a Nuclear Authorization. As part of that authorization, we have to demonstrate to the National Nuclear Regulator (”NNR”) that we have the procedures in place for all aspects of the operation, and we recently received NNR approval for those procedures ” taken from metalsites.com
Hope this happens to us also,look at the volume the last couple of day's
NewLead Holdings Ltd. Announces Cancellation of 1-for-5 Reverse Split of Common Shares
PR Newswire
PIRAEUS, Greece, March 19, 2012
PIRAEUS, Greece, March 19, 2012 /PRNewswire/ -- NewLead Holdings Ltd. (NASDAQ: NEWL) ("NewLead" or the "Company") today announced that the Company's Board of Directors decided to cancel the 1-for-5 reverse stock split of its common shares that was scheduled to take effect upon the opening of the NASDAQ market today March 19, 2012, with a view to rectifying the minimum bid listing deficiency as previously announced.
NewLead decided not to proceed with the 1-for-5 reverse split of its common shares following the increase in the price as well as the increase in the volume of trading during the last five business days subsequent to the latest significant developments in the restructuring process and the deleveraging of the Company. As a result, NewLead will evaluate further and reconsider its strategy in the following days for the benefit of its shareholders.
Trading in NewLead's common shares have been halted and will be halted for all of today, March 19, 2012. Trading will resume on a normal unsplit basis when the NASDAQ market opens on March 20, 2012.
Read more: http://www.digitaljournal.com/pr/628624#ixzz1pf22XlaF
Not sure yet...
So, is a new CEO good news or not at this point in the race?
No word on the new person. . . .
$GWMGF
Great Western Minerals Group Announces Pricing of US$80 Million Convertible Bond Financing
March 16, 2012 (Source: Marketwire) --
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Great Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX VENTURE:GWG)(OTCQX:GWMGF), today announced that GMP Securities L.P. and ISM Capital LLP, as co-lead agents, along with Byron Capital Markets Ltd. (collectively, the "Agents") have priced the offering ("Offering") of secured convertible bonds (the "Bonds"), as announced on March 14, 2012, in the amount of US$80 Million. In addition, the Agents have been granted an option to increase the size of the Offering by up to an additional US$10 million at any time at least two days prior to closing and settlement of the Offering.
The Bonds will bear interest at the rate of 8%, will become due five years from the date of issuance and will be convertible into common shares of GWMG ("GWMG Shares") at a conversion rate of C$0.66 per share, representing a premium of 20% relative to the closing share price of C$0.55 per share on the TSX Venture Exchange on March 14, 2012. The closing and settlement of the Offering is anticipated to take place on or about April 5, 2012.
GWMG President and Chief Executive Officer Jim Engdahl said, "The successful pricing of this financing is an important achievement for GWMG. It is particularly gratifying that the Offering has been so well received, conveying a high degree of confidence in the future of our Company. According to our Company's most recent estimates and in the opinion of GMWG management, this financing enables GWMG to construct the mixed rare earth chloride and separation plants for Steenkampskraal and provide the National Instrument 43-101 technical report. This is a pivotal moment for GWMG."
Additionally, GWMG announced today that CEO and President Jim Engdahl has recommended to the Board of Directors (the "Board") of GWMG that a transition process be put in place to recruit and select a new Chief Executive Officer for the Company. The Board has accepted that recommendation and has authorized Mr. Engdahl to begin the recruitment and selection process.
Jim Engdahl stated, "I believe it is in the best interests of GWMG at this time to commence a process that sees an orderly transition to the appointment of a new CEO. GWMG is about to make the considerable leap to being what I believe will be one of the most fully integrated rare earth producers in the world. My stated objective was to position the Company for rapid growth with an integrated model and on a fully funded basis. This has now been achieved."
Gary Billingsley, Executive Chairman of GWMG added: "Jim has guided GWMG from being a junior rare earth exploration company, to its current status where it is poised to become one of the few integrated rare earth producers in the world. We have reluctantly accepted Jim's proposed transition."
Great Western Minerals Group Ltd. is an integrated Rare Earths processor. Its specialty alloys are used in the battery, magnet and aerospace industries. Produced at the Company's wholly owned subsidiaries Less Common Metals Limited in Birkenhead, U.K. and Great Western Technologies Inc. in Troy, Michigan, these alloys contain aluminum, nickel, cobalt and Rare Earth Elements. As part of the Company's vertical integration strategy, GWMG also holds 100% equity ownership in Rare Earth Extraction Co. Limited, which owns a 74% equity interest in the Steenkampskraal Mine. In addition to an exploration program at Steenkampskraal, GWMG also holds interests in four active Rare Earth exploration and development properties in North America.
In addition, in connection with the Offering, the Company has agreed to use reasonable commercial efforts to consolidate its common shares on a 5 to 1 basis, or such other ratio as the Company may determine, subject to shareholder and regulatory approval.
Email inquiries should be made to info@gwmg.ca and the company website is located at www.gwmg.ca. Inquiries by direct mail should be addressed to Great Western Minerals Group Ltd., 219 Robin Crescent, Saskatoon, SK S7L 6M8.
The securities described in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. This press release is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of GWMG as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to the successful completion of the Offering, the construction, commissioning and operation of the proposed monazite processing facility and separation facility, mine refurbishment activities, reliance on third parties to meet projected timelines, the results of the exploration program at Steenkampskraal, completion of a resource estimate and commencement of production at Steenkampskraal, satisfaction of the conditions precedent with respect to GWMG's offtake agreement, receipt of all required approvals (including those relating to the commencement of production at the Steenkampskraal mine, environmental matters, water and land use) and risks, uncertainties and other factors that are beyond the control of GWMG, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve or resource estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although GWMG believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of GWMG contained in this News Release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement and the risk factors contained in GWMG's current annual information form available at www.sedar.com.
CUSIP: 39141Y 10 3
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
http://www.raremetalblog.com/2012/03/great-western-minerals-group-announces-pricing-of-us80-million-convertible-bond-financing.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2FIBmE+%28RareMetalBlog+%29
OK, so pending news. The pink sheets are still trading then?? so it would be possible to purchase those if you think the price of the regular halted stock might explode upwards???
What happens if you own a pink sheet and there is a buyout?
IIROC Trading Halt ? GWG
5 hours ago by CNW Group
The following issues have been halted by IIROC:
Company: Great Western Minerals Group Ltd.
TSX-Venture Symbol: GWG
Reason: At the Request of the Company Pending News Halt Time (ET): 8:04
The Investment Industry Regulatory Organization of Canada (IIROC) can make a decision to impose a temporary suspension of trading in a security of a publicly listed company, usually in anticipation of a material news announcement by the company. Trading halts are issued based on the principle that all investors should have the same timely access to important company information. IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.
What in the F is going on??? My L2 says there is 2.4 million shares on the bid for .58 and virtually nothing on the way up past that like 50 thousands here and there???
IS it halted?
Buyout?
???
US $0.62
VOLUME 109,350
I hoop your right !
The lack of a NI 43-101 was what held us back from listing on the big boards.I really think they have the results now and we will be moving on up.
IIROC Trading Halt – GWGVANCOUVER, March 15, 2012 /CNW/ - The following issues have been halted by IIROC:
Company: Great Western Minerals Group Ltd.
TSX-Venture Symbol: GWG
Reason: At the Request of the Company Pending News
Halt Time (ET): 8:04
The Investment Industry Regulatory Organization of Canada (IIROC) can make a decision to impose a temporary suspension of trading in a security of a publicly listed company, usually in anticipation of a material news announcement by the company. Trading halts are issued based on the principle that all investors should have the same timely access to important company information. IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.
China Challenged on Rare Earth Practices -- Rare Element Resources and Great Western Minerals Poised to Benefit
Last Update: 3/15/2012 8:20:43 AM
NEW YORK, NY, Mar 15, 2012 (MARKETWIRE via COMTEX) -- With the U.S economy recovering from recession, President Obama has begun to bring a renewed focus on Chinese policies that could hinder U.S. expansion. China's control of the rare earth market has come under increased scrutiny since 2010. Rare earth commodity prices have risen sharply when China took actions to control its supply, which represents roughly 95 percent of global demand. Five Star Equities examines investing opportunities in the Rare Earth Industry and provides equity research on Rare Element Resources Ltd. (REE)(RES) and Great Western Minerals Group Ltd. (GWG) (pinksheets:GWMGF). Access to the full company reports can be found at:
www.fivestarequities.com/REE
www.fivestarequities.com/GWG
North American and Australian rare earth stocks got a bump earlier this week after the United States, the European Union and Japan filed complaints with the World Trade Organization charging that China is limiting its export of rare earths, minerals that are vital to technology components. US President Barack Obama accused China of breaking global trade rules by restricting exports of rare earth elements. China has cut its export quotas of these minerals over the past several years to cope with growing demand at home. U.S. industry officials suggest it is an unfair trade practice, against rules established by the WTO, a group that includes China as a member.
"If China would simply let the market work on its own we would have no objections, but their policies currently are preventing that from happening and they go against the very rules that China agreed to follow," Obama said.
Five Star Equities releases regular market updates on the Rare Earth Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.fivestarequities.com and get exclusive access to our numerous stock reports and industry newsletters.
The same day Obama accused China of breaking global trade rules, The Consumer Electronics Association (CEA) applauded the Obama Administration on its plan to challenge China on rare earth minerals. "CEA today welcomes the Obama Administration's announcement that it will challenge China at the WTO," said Gary Shapiro, president and CEO, CEA. "If China wants to be a world player in trade, it needs to behave like one. For far too long our member companies, particularly small companies manufacturing here in the United States have been bearing the cost burden of China's unfair practices."
New update on their web page again.
Spartacus, thanks for the heads up on that Lifton article. I would clarify that the lines about the "Right Size," "Right Stuff," etc is from one of Jack's comments to a reader of the article, posted in the Comments section.
Look at the volume on this already today
I cannot overemphasize that GW is “The Right Size” venture for its primary targeted market, which is the fabricators of rare earth permanent magnets of the dysprosium modified neodymium-iron-boron type. I believe it will be as it says it’s going to be a profitable 150-250 million dollar/yr revenue venture with a gross margin of 30%. It will grow from there, if it wants to, by increasing magnet alloy production fed by new discoveries or acquisitions of the correct critical metals it needs. GM is also “The Right Stuff.’
Picking off more than you can chew is an adolescent game and it always ends with someone kicking the s**t out of the one who aims too high.
Bet on the cautious guy who stops for water on his way up the mountain rather than the guy who thinks he can make it in a single leap.
Philosophy over. i’m more sold than ever on the GW model. I’m glad Mark Smith got the model right anyway.
Jack
Rare Earth Bull
by Jack Lifton on March 8, 2012 · 24 comments
in China,News Analysis,Permanent Magnets,Rare Earths
Print
Rare-earth deposits are not rare; they are just rarely put into production. Why is that? It is because of pricing economics driven by supply and demand. The demand for the rare earths as raw materials is today in southeast Asia, so it should not be surprising to see how the producing supply base has migrated to that part of the world. Yet pundits and politically charged writers keep hinting at a vast intentional Chinese conspiracy to ‘control’ the rare earths. It is more than likely actually a consequence of the operations of the market forces of (what we now ironically call) free-market capitalism. as practiced today by governments following the model originated by John Maynard Keynes.
The American financial regulators are as guilty of allowing foreseeable but unintended consequences of their actions, as the Chinese regulators are responsible for maximizing the benefits of American oversight for China’s economy. There is actually no intractable problem so long as both economies practice free trade, but when Chinese self-interest is seen as a threat to American self-interest, it is the ‘other’ rather than the ‘system’ that is brought into ill-repute.
Rare-earth-based production (the supply) and production levels are determined by the economics of overall demand. So long as the lowest cost for rare-earth products is obtained by buying such types of goods manufactured in China, the total supply chain and the focus of the rare-earth industry will remain in China.
Today, in early March 2012, I am going to give one prescription for the re-birth, health and continued growth of a non-Chinese rare-earth industry, and I’m also going to make one prediction about the growth of the global rare-earth industry over the next ten years.
First, before I assume the mantle of the business-survival specialist or of a resource-markets Nostradamus, I need to point out that the growth of demand for a rare-earth element (REE) is in the case of almost all of the REEs, within a unique market for each of them individually. The demand for cerium (Ce), for example, has almost nothing whatsoever to do with the demand for lanthanum (La), or any other REE. They are not interchangeable, nor substitutable for each other, except in very few cases such as that of neodymium (Nd) and praseodymium (Pr), which in some limited applications in rare-earth permanent magnets (REPMs), are substitutable/interchangeable.
Notably the demand for Nd for use in REPMs is the principal driver of the demand for dysprosium (Dy), whereas the inverse is not true. This complex subject, the demand for individual and certain combinations of the REEs, is glossed over by pundits as if it doesn’t matter. This is a fatal flaw in creating investment strategies for developing REE supply, because what is overlooked is that the supply of the rare earths must be examined on an element-by-element basis. and not looked upon simply as a ‘basket’ containing all of the REEs.
This error of assuming that all or most of the REEs are interchangeable for marketing purposes, gives rise to the glib assumption that the same strategies will work for selling REEs to a variety of end users, whose only common interest is that their products all contain REEs.
An even more flawed assumption is the idea that the individual REEs are of equal importance to our technological economy in any of their uses, and so one simply calculates a basket price and this metric then defines an opportunity to produce a combined value. Nothing could be farther from the truth.
China appears to have unused (excess) capacity in the production of the lower-atomic-numbered rare earths (LANREs) in the amount of more than 50%! This means that China could ramp up production to twice today’s output of LANREs and, based on even old (from 1997) basically anecdotal data from the US Geological Survey, keep this level of production up indefinitely.
On March 5, 2012, there was official news from China (reported in the China Daily, the English-language version of the People’s Daily, the house organ of the Chinese Communist Party) for example, that Jiangxi Copper, which has been given responsibility to consolidate rare-earth production in Sichuan province, says that it will increase production there to 50,000 tpa and will target the export markets! Rare-earth prognosticators please pay attention! Jiangxi Copper is a world-class commodity-metals-producing giant. It is also state-owned and has more working capital and borrowing firepower than all of the non-Chinese rare-earth ventures on Earth combined.
The domestic growth of the Chinese demand for the REEs is today without doubt the principal driver for any attempts to increase the supply of REEs. China’s domestic demand for all of the REEs today is probably at 70-80% of the world’s total supply (also, of course, today produced in China domestically).
China is openly moving to change its economy from an export-led to a domestic-consumption-led model. As China does this, the domestic demand for REE-containing consumer products (the vast majority) will increase in China, apparently without decreasing outside of China. Unless there is increased production of those among the REEs that are the critical REEs, there will be shortages and price hikes – but NOT in China, which will simply consume more REEs domestically while reducing exports, as it has already begun to do precisely to prepare for the change of direction in its economy.
Reacting to that change and to world opinion, China has restructured its REE industry and this has resulted, for example, in Jiangxi Copper telling the world that it will ramp up production in the area under its control, so that both the Chinese domestic market and the export market can be served.
Jiangxi is a new competitor in the global REE market, and it is a large profitable company run by excellent managers. It has no competition outside of China in the REE space that can match it in resources of intellectual property, manpower resources, capital, and knowledge of world markets.
Yet in China, Jiangxi faces Baosteel and Chinalco in the newly consolidated REE production space as its competitors. Keep in mind that it will be an uphill battle to beat China at its own game inside China. So what is left for the non-Chinese REE supply wannabes is to produce something that the Chinese domestic REE market needs, and which is not produced in China in sufficient quantity, so that it will be in demand whether or not a total supply chain is ever constructed outside of China.
It seems that the higher-atomic-numbered rare earths (HANREs), the so-called ‘heavy rare earths’ fit this description and their number may even be joined by the LANRE Nd.
There are two cultures on Bay Street (the center of junior-mining finance in Toronto, and most likely the financial world). Among the denizens of one of those two cultures, it is the share price of a company that measures its success; in the other culture, the question asked is: ‘how much money will it take to bring this venture into (profitable) production?’. The probability of achieving profitable production is this second group’s measurement of success.
It is late in the rare-earth ‘boom’ and so lately the line between the two cultures has begun to blur in the rare-earth ‘space.’
Junior mining is basically the mineral-data mining of the Earth. The data are discovered and recorded by field geologists and then it is filtered through layers of physical and chemical analysis, until for a given volume of the Earth’s crust, a picture can be drawn in three dimensions, of the distribution of specific minerals within the chosen volume. If there are known mechanical and chemical procedures for recovering any valuable metals or minerals in the defined volume, and the result of those procedures is a product, or products that can be sold for more than the cost of production in volumes above the break-even cost of the venture then, if those factors have additionally a high probability of continuing in time, we have a mineable ore body that is economic.
The day of reckoning is upon the rare-earth juniors. Those of them who have no knowledge of supply-and-demand-based pricing, or the geographic distribution of demand, or who have no knowledge of finance will be gone first. Even among those that survive this first cut, if they believe that the goal of a business is anything other than producing consistently a competitive profit from selling products produced at the lowest cost with the lowest possible break-even threshold, then they will be gone next.
The survivors will be those ventures which can sell their product at a profit, at a place in the supply chain which their management and marketing skills can maintain.
The Vatican in Rome regularly issues statements of Catholic doctrine, which are intended to be the ‘correct’ interpretations of questions of faith for believers. These statements are written in church Latin and the translation of the category aspect of the title of all such statements is a papal ‘bull.’ This is the short form of the Latin word bulla, used to describe the clay stamp traditionally applied to such edicts, and from which in English, we get the word ‘bulletin.’
I consider this article to be a ‘bulletin’ to investors in the rare-earth space.
I am not. nor do I pretend to be infallible, but I recognize that much of what passes for interpretation in the mainstream media of the announcements that regularly flow from junior miners, or, in some cases from companies actually running mining operations, is just plain ‘bull.’
If a junior miner is to survive. it must either sell its ore body or develop a profitable mining operation. There has been little interest by the major mining companies in purchasing the properties of the current rare-earth juniors. Therefore to survive, the juniors will have to try to put their ore bodies into production as mines. This means that the clock is ticking. There will be no more than a dozen rare-earth ventures outside of China in actual development by the end of 2014. The global REE demand outside of China needs very little additional supply of the LANREs if it does not ramp up its metal-, alloy-, and component-manufacturing supply chain. Certainly there is way too much potential and/or planned production of the LANREs chasing too small a market.
It is just the opposite for the HANREs. China is short of these very critical materials, so that even if no supply chain at all is constructed or enhanced outside of China for using such raw materials, there will be a demand for them.
The problem with the HANREs market is that it is not understood as a free-standing market by non-Chinese investors. Additionally it has turned out that the highest grades of HANREs as a proportion of total REEs, are in hard-rock ores and tin and uranium residues, the ‘metallurgy’ (cracking) of which has not been successfully (i.e. economically) achieved to date. I believe, however, that the metallurgies of the hard-rock ores have been addressed with sufficient success outside of China, by companies attempting this endeavor, to allow me to recommend to my institutional-investment clients that they fund the development of the best-managed and best-sited ones.
The skills to extract the HANREs into a pregnant leach solution, and to separate the individual HANREs from that solution are in very short supply. No one, as of yet, outside of China has addressed the commercial separation of the HANREs. Innovation Metals, a company co-founded by my TMR colleague Gareth (and to which I am an advisor), is attempting to do something about this, with its goal of creating the world’s first independent rare-earth separation facilities, to toll-treat rare-earth concentrates. Do not be fooled by those who say that all you have to do is ‘buy’ a property and ‘feed’ the ore into an existing LANRE separation system. This is flim-flam.
I predict that at least one, perhaps two American companies, and one European company will be producing HANREs competitively with the Chinese within 3-5 years. from hard-rock mining. I further predict that it is these operations which will catalyze the re-birth of a non-Chinese total supply chain for the production of Dy-modified REPMs. There are a number of promising Canadian, Southern African, and Australian HANRE-themed junior miners, who I believe will become suppliers to the total supply chains located in the USA, Europe, Japan, or even China. Their ability to do so will be based on competitive pricing.
I am not mentioning Great Western Minerals Group’s South African/UK integrated operations, because they are now in a group of one, at least with regard to the commercial production and utilization in the downstream total supply chain of the heavy rare earth Dy. As far as I know their, output of Dy is fully taken up by their customers, and is only a market factor in the reduction of non-Chinese demand for Dy it will cause (less than 3% of the current market).
The first step in the production of a REE is the mining of an ore containing a mineral that has REEs in its molecular or physical composition. In simple English, a rare-earth mineral is one in which the REEs are either chemically bound into, or in a few cases, just physically attached (adsorbed) onto a substrate mineral. The ore at Molycorp’s Mountain Pass mine is an example of the first and the famous adsorption clays in China’s southern provinces are an example of the second.
A common pundit error at this point is to declare that the ores with the highest concentrations of the rare earths are the most valuable. The most valuable rare-earth ores are those from which the rare earths can be extracted efficiently at the lowest cost per unit. In fact, the most pressing problem today in the rare-earth supply space is the fact that all of the HANREs now produced commercially, are from the very low overall grade ‘ionic adsorption clays in China. This is because of:
The fact that by ignoring (and not capitalizing) safety or environmental ‘costs’, the Chinese mining industry has been able to continue due to the high demand for their ‘unique’ products, and
The lucky situation that the ionic clays are essentially thorium and uranium free, allowing their processing by crude heap leaching in the open.
For hard rock, HANRE-enriched deposits have been found outside of China, the concentration of desired minerals is accomplished by preparing the ore (typically this involves crushing and/or grinding followed by gravity separation). Milling is the first step, with the second typically done by floatation, in which the higher specific gravity minerals are separated from the lighter ‘rock’. by a combination of surface-chemistry techniques and the differences in their densities.
When we have the ore concentrated, we come to a point in the process where mining terminology diverges from both common English and from the strict definitions of terms as they are used in modern materials science. When miners use the term ‘metallurgy’, they usually mean ONLY the extraction from an ore concentrate of the CHEMICAL forms of the elements desired.
In such cases, developing the metallurgy means chemically leaching the ore or ore concentrate. Leaching is a wet chemical process most often involving acids or bases), which places into solution the chemical elements present in the ore, so that they can be further chemically processed to separate them from each other.
Typically even the separated elemental chemicals must be further purified – especially in the frequent case where separation is not analytical (i.e., is not complete). The purified chemicals are then reduced by chemical/physical processes to create pure metals.
An example of straightforward mining metallurgy is the processing of common sulfide ores of copper (Cu). Their metallurgy starts with roasting ( i.e. forced-air, high-temperature oxidation). The Cu oxide so obtained is dissolved in sulfuric acid, obtained in part by capturing the sulphur dioxide from the roasting, catalytically oxidizing it further to sulphur trioxide and dissolving this in water.
The Cu sulphate solution is electrolyzed so that the pure Cu collects on the cathode and the nuisance metals, such as molybdenum, gold, silver, palladium, tellurium, selenium, and arsenic collect in the “mud” formed under the anode. Some of the nuisance metals contained in the Cu ore are also collected in part from the exhaust gases of the roaster, which include volatile oxide species of many of the elements also present in the mud.
The mining metallurgy of Cu ores is complex, and time- and energy- (and thus capital-) intensive, but it pales in comparison with the complexity of the separation of the individual rare earths after they have been extracted from their ores into a pregnant leach solution.
The separation of the mixed rare earths produced by the leaching of their ore concentrates into individual REEs is a labor intensive, time-consuming operation, accomplished commercially today only via the process known as solvent extraction (SX), which is expensive to facilitize, difficult to supply with some Chinese-produced chemical reagents, slow, and in need of a large body of skilled chemical engineers for its operations and quality control. Outside of China, and previously in Japan and possibly Kyrgyzstan, no-one has yet constructed a SX operation with the capability to separate the HANREs.
I have been told that a HANRE-separation-capable facility is, in fact, being constructed in the Western Cape province of South Africa, by Great Western Minerals Group, but I do not know the timetable for that project. I do know that the punditry has now figured out that the HANREs are the most desirable of the REEs, but, once again, the highest grade. largest total ore tonnages are being mindlessly touted as ‘the best investments.’
Of course, the best investments are the well-managed ventures that own ore bodies for which known extraction techniques work, and from which a pregnant-leach solution can be made, which will be capable of being fed into a separation plant, that will produce separated, purified rare-earth chemicals. All of this will have to be done at the lowest costs possible and the lowest breakeven possible.
HANREs so produced, mainly Dy and terbium (Tb), will be saleable into a market in deficit for the rest of this decade and beyond.
A total supply chain to produce Dy-modified Nd-based magnets will be built in Europe. I believe that such a project is also underway in the USA. The successful mining ventures in the HANRE space will most likely sell their products in a magnet ‘bundle’. In order to get Dy, the customer will also need to buy Nd in a ratio of the two that insures the total sale of both.
There are already too many contenders in the LANRE space outside of China. The survivors will be the low cost, lowest breakeven, producers.
Anyone who is going to invest in a junior rare-earth-mining venture must look at its balance sheet, for its break-even point at reasonable prices. One must also ask exactly what market share the company needs, to break even at those prices. Next one must ask for a list of the products to be produced, which are to be sold at that point into the supply chain, and match that list with the companies expertise, or access to expertise, necessary to technically accomplish each step in the supply chain in which it will be directly involved.
Size matters in a high-school locker room. Only skills and break evens matter in the world of mining…
Disclosure: at the time of writing Jack Lifton is long on Great Western Minerals Group (TSX.V:GWG).
China Looks to Stimulate Rare Earth Demand -- Molycorp and Great Western Minerals Look to Benefit
Last Update: 3/6/2012 8:20:48 AM
NEW YORK, NY, Mar 06, 2012 (MARKETWIRE via COMTEX) -- Rare Earth stocks have handily outperformed the market this year. The Market Vectors Rare Earth/Strategic Metals ETF (REMX) is up more than 15 percent year to date -- easily exceeding the 6.2 percent jump in the Dow Jones Industrial Average. North American rare earth stocks took a slight hit last week, however, as reports surfaced that China may boost exports to bring prices back down. The Paragon Report examines investing opportunities in the Rare Earth Industry and provides equity research on Molycorp, Inc. (MCP) and Great Western Minerals Group Ltd. (GWG) (pinksheets:GWMGF). Access to the full company reports can be found at:
www.paragonreport.com/MCP
www.paragonreport.com/GWG
Last week Bloomberg reported that China may almost double exports this year and meet quotas set by the government as lower prices stimulate demand. A late 2011 Ministry of Commerce statement said that Chinese exports were 49 percent of the government-allotted quota in the first 11 months of last year because the slowing global economy hurt demand.
"Export quotas may be met this year as overseas demand recovers," Wang Caifeng, a former official overseeing the rare earth industry with the Ministry of Industry and Information Technology, said in an interview in Beijing. "High prices last year had deterred purchases and led to inventories depletion. Smuggling also hampered exports through illegal channels."
The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the rare earth industry register with us free at www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters.
China's decision last year to cut exports boosted prices and sparked concern among overseas users about access to supplies. Now, China is encouraging its companies to develop rare earth mines abroad to help ease pressure on domestic producers.
According to Wang Caifeng, China has the technical expertise and human resources required by overseas company in mine development and processing.
GREAT WESTERN MINERALS GROUP’S LCM RECEIVES
RARE EARTH METAL MAKING ENVIRONMENTAL PERMIT
March 5, 2012 - Saskatoon, Canada: Great Western Minerals Group Ltd. ("GWMG" or the "Company", TSX:V – GWG) is pleased to announce that GWMG’s wholly owned subsidiary Less Common Metals ("LCM"), located in Birkenhead, United Kingdom, has been granted its environmental permit to carry out electrolytic production of rare earth metals at LCM's new Hooton Park location.
The permit, issued by the United Kingdom Environment Agency, enables LCM to produce rare earth metals in accordance with the highest of national environmental, health and safety standards.
Ian Higgins, Managing Director, Metals and Alloys at LCM said, "The detailed design and production of the first two metal making cells, which have now been received by LCM, was carried out by a leading United Kingdom-based foundry technology company. The initial trials of the metal making system are scheduled to commence in May 2012. Our plan is to have six cells in full operation by the end of 2012 at a level of production that will fully supply the requirements for LCM's recently commissioned strip casting furnace."
Jim Engdahl, President and Chief Executive Officer of GWMG said, "The process of fused salt electrolysis of rare earth oxides to metals increases the existing metal and alloy making capability at LCM into bulk production of metals, principally for the permanent magnet alloy business. This represents one more step toward GWMG being the most fully integrated rare earth company in the world. That, in turn, translates into additional self-sufficiency for our production cycle and certainty of supply for GWMG’s global customers."
They have a new 2012 presentation on their web page.
They are moving ahead on all projections and in most cases on the time line.
Rare Earth Metals Is a Stock-Pickers Market: Jason Burack and Mo Dawoud
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Rare Earth Metals Is a Stock-Pickers Market: Jason Burack and Mo Dawoud
Source: The Critical Metals Report Editors (2/28/12)
http://www.theaureport.com/pub/na/12678
In the wake of a 2011 roller coaster ride in the rare earth market, the sector still holds promise for astute investors, argue Wall St. for Main St. co-founders Jason Burack and Mo Dawoud. In this exclusive Critical Metals Report interview, the pair name the six major REE projects that could rocket back up out of 200-odd juniors competing in this space.
The Critical Metals Report: As co-founders of Wall St. for Main St., the two of you have been watching the rare earth elements space for years. How do you define the term?
Jason Burack: The rare earth elements (REEs)-mostly lanthanides and actinides-are elements with unique chemical and electrical properties. These elements are contained in host rocks with a unique mix of the 17 uncommon elements that can be found on the bottom of the periodic table. These elements are actually abundant around the earth's crust, but are spread out rather than concentrated the way gold, copper and lead are concentrated in vein deposits. For that reason, the majority of REEs are uneconomical for extraction, thus making them rare.
Mo Dawoud: What is new is an increased level of demand. In the last decade, REEs have been used to improve new electronics and green energy technology, including flat-screen televisions, mobile phones, hybrid vehicles, defense missiles, petroleum refineries, wind turbines and much more. If it wasn't for neodymium, dysprosium and terbium, we would still be walking around with Gordon Gekko's cell phone because these materials are key ingredients in neodymium-iron-boron magnets. Small quantities of these materials allow manufacturers to make phones, tablets and mp3 players smaller, thinner and lighter, while maintaining computer power, memory and functionality.
TCMR: If manufacturers can't access these materials at reasonable prices, won't they just engineer them out of the products?
MD: Automakers are exploring ways to make hybrid cars without rare earth metals, but it would be difficult for them to create REE-free motors because they provide more power and efficiency than traditional ferric magnet alternatives.
JB: We believe uses for these metals will continue to rise. One expert in natural resource investing estimates that China has over 1,000 engineers and scientists dedicated to creating new products using rare earth metals!
Over the last decade, as global consumers have continued to buy REE-dependent products, demand has risen from 80,000 tons (t) to over 130,000t. Demand could go as high as 300,000t by 2015 by some aggressive estimates.
Much of the demand increase is coming from China as the country moves toward creating green energy and advancements in military and defense technology. In 2010, China's demand was 72,000t; by 2015, China's forecast demand is over 117,000t.
TCMR: How will growing demand and shrinking supply posed by China's shrinking export quota impact rare earth prices and, ultimately, equity opportunities?
JB: China owns 30% of the REE deposits and controls 97% of the world's REE production. The rare earth monopoly allows Chinese suppliers to manipulate prices. As the former leader of China, Deng Xiaoping once said, "The Middle East has oil and China has rare earths." China's leadership plans to make the most of that fact.
MD: Japanese and U.S. governments and manufacturers are, therefore, at the mercy of the Chinese government for REE supply. The U.S. government has claimed that a supply shortage would threaten national security because defense manufacturers use rare earths to make lasers, guided missiles systems and predator drones. Japanese automakers are now locking up supplies in Vietnam, Brazil and India.
Some manufacturers moved to China to gain access to supply, which was part of the country's strategic plan to bring more jobs and capital to the Chinese economy. Outside China, we think it will be difficult to close the supply gap, particularly for the heavy rare earth elements (HREEs). Unfortunately, there are not many mines outside of China that have a big deposit of the heavies going into production within the next three years. This will create a major supply shortage for metals like dysprosium and terbium going into 2015.
The supply forecast for light rare earth elements (LREEs) is more optimistic, mainly because a few mines are coming into production in the next few years. Molycorp Inc.'s (MCP:NYSE) Mountain Pass Mine is projected to be in full production in the second half of 2012 and Great Western Minerals Group Ltd.'s (GWG:TSX.V; GWMGF:OTCQX) Steenkampskraal Mine could be operational in 2013.
TCMR: I know prices increased dramatically in 2009 and 2010, but most have come back down since then. Was it a bubble?
JB: We believe the price dip was long overdue because the market moved way ahead after China cut exports. A violent correction was normal after such a long-time price increase. We do not believe this will mark the new low due to the high global demand and the potential supply shortage. The rare earths market still holds a lot of promise in the future for astute investors, but capital needs to be carefully allocated into the sector. This is a stock picker's market now. More than 200 juniors list themselves as REE plays today. However, based on current conservative 2015 demand projections, we think the market can only support at most five or six companies.
What this means is many of the junior companies furthest away from production will go bust or sell out through a joint venture (JV) for pennies on the dollar. We think a massive consolidation of the sector is very good for its long-term health.
MD: Many of the rare earths companies, including some in the second tier, have management teams that don't properly understand the context of the current macroeconomic situation. Some of these companies in our second tier have high quality deposits, but are still years away from production with many companies in the second tier not scheduled to go into production until 2015 at the earliest. Despite this reality, a number of companies are not adequately managing cash flow burn rates to weather the storm and they will need additional equity financing in 12 months or less at a depressed stock price.
JB: For example, Arafura Resources Ltd. ( ASX ) management totally misunderstood the macroeconomic environment and did a massive equity financing/dilution after the stock price had already had an immense correction. This is one of the main reasons it didn't make either tier or our watch list, although the company could be saved by a surprise takeover or funding from the Chinese. Prudent company financing should have been done before early 2011 when rare earths prices were soaring.
TCMR: What companies positioned themselves well during this window?
JB: Molycorp used debt, equity and preferred shares to fund through production at higher stock price valuations. The company announced on Feb. 23 that it earned $0.26/share for Q411. Gross profit margins dropped less than 7% total, which means management is doing a very good job operationally considering how much REE prices fell and how some input costs have increased during the Phase 1 production ramp up of Project Phoenix at Mountain Pass. The company is in very good shape to weather out the storm of lower prices. It is now generating good cash flows from small production and doesn't need to go back to the market for any more debt/equity financing unless it wants to make an acquisition of accretive, undervalued assets, as it did earlier in the year by buying the rare earths processing company Silmet. The company recently announced a JV deal with Daido Steel and Mitsubishi Corp. (MSBHF:OTN) to make value added, higher profit margin rare earth magnets in Japan starting in 2013. Once more market penetration occurs, Molycorp is projecting massive sales growth for 2012 and should be able to achieve pricing power on all of their Xsorbx water treatment products and start getting a premium for the product. It's a sound long-term strategy. Innovating with the rare earths to create higher profit margin products to sell is the best way to weather the storm of a worsening macroeconomic environment.
Questions remain concerning permitting, execution on the mine-to-magnet vertical integration strategy, processing capacity and exposure to the HREEs. But the company is the best positioned of the group in our opinion. If Molycorp succeeds, the sector will start to get more people willing to finance other projects. The company could even reinvest profits into other juniors.
MD: Over at Great Western's Steenkampskraal Mine, the all-important total rare earth oxide (TREO) grades are well above 10% TREO, some of the highest grades of any deposit in the world, which could translate into the most robust profit margins. Rock mined at Steenkampskraal is monazite, so in-demand HREE concentrations are high. The mine could be in production in less than 18 months. The company already has a license to store the thorium byproduct at the mine, and since the mine was operated decades ago before it was shut down, infrastructure is already present. The company owns two quality processing facility assets worth more than the current market cap. Management has already said demand is increasing so rapidly that another doubling of production capacity is possible after the first expansion is implemented in the next three years.
Great Western Minerals owns a few other promising REE deposits. It will be buying tailings from other South African miners. It has a deal negotiated with Aichi Steel, a subsidiary of Toyota Group, for Aichi to buy a large quantity of rare earth alloys and another long-term supply contract with German permanent magnet maker, Vacuumschmelze.
The downside is that the Steenkampskraal Mine is located in South Africa, which is politically unstable. However, Great Western's processing plants will comprise most of the profit and those facilities are located in the U.S. and U.K.
Also, although it is generating significant revenues, Great Western Minerals is still not profitable because it pays high input costs for processing materials. The company imports rare earth metals from China at great expense. Management has not done a good job of understanding the macroeconomic situation or of managing the cash levels at the company and because of this, management botched a financing in the last few months that it could have easily done at a much higher stock price earlier in the year and have diluted less. The company is not fully funded yet and is not completely self-sustaining. Cheaper materials from Steenkampskraal will generate higher profits. The company's other processing facility, Great Western Technologies in Michigan, is currently sitting idle because of a dearth of HREE materials.
Great Western Minerals is a long-term play. Financial statements are getting stronger with increasing gross profit margins due to the Less Common Metals processing plant. Great Western's stock price also benefited tremendously when the rare earth metals price rose from 2010 to July 2011. Since then, the stock price had a violent correction, mainly from declining rare earth prices and dilution. Investors will have to have a two- to three-year timeframe when investing with Great Western Minerals. The most important thing to watch is management execution. Can they can recover from the dilution? Will they bring the Steenkampskraal Mine to full production on time with no major setbacks? Will they reduce processing costs? And can they continue to expand profit margins? If management can execute, we would not be surprised if this stock goes up tenfold.
TCMR: What REE-related companies could benefit from demand for REEs' unique physical properties?
JB: Neo Material Technologies (NEM:TSX) is generating significant profits and free cash flow. The company makes higher, valued-added profit margin products in the form of permanent magnets. Not many firms are capable of making neodymium iron-boron magnets outside of China, Japan and Germany. The company has been using profits to acquire smaller magnet-making firms.
The company recently announced a share buyback program to counteract what it believes is severe undervaluing. Neo Material still buys some of its rare earth alloy materials from China to make magnets and is vulnerable to higher export tariffs/taxes on Chinese rare earth products or disruptions in supply. To better protect itself, the company needs to further diversify its supply.
Similar to Great Western Minerals, Neo Materials is also a long-term play for rare earth investors. However, if you invested in this stock over a year ago, then it should be paying off now. Financial statements continue to get stronger every quarter with 10 consecutive increases in quarterly revenue due to the increasing rare earth prices. The quarterly earnings per share ( EPS ) increased almost sixfold and operating income is at $109 million ( M ), compared to $19M last year. Long-term debt is at $197M, but the company is sitting on $319M in cash, so it can pay off debt in full at any time and still have enough cash to reinvest.
It will be interesting to see how management increases revenue with declining rare earth prices. Will buyers lock up supply at a discount or will demand taper off due to the bad macroeconomic environment? Since Neo Materials has no exposure to the beginning part of the vertical integration strategy, the company might want to use its cash to do private placement or a royalty deal with rare earth mining companies in exchange for rare earth oxides (REOs) and alloys at a discount. We will have to watch this one.
TCMR: Why isn't Lynas Corp. ( ASX ) included in the top tier?
MD: At one point, Lynas was ahead of Molycorp in terms of its production timeline. That time has passed. Lynas has a very good and very economic deposit at Mt. Weld with great grades and a nice mix of rare earths, but the company has some very serious issues it needs to address with more than words if it is going to be moved back into our top tier.
For starters, Lynas has received very credible allegations of cutting corners at its proposed Malaysian REO processing facility. The plant was put in Malaysia because of a large tax break and the plant was supposed to be online already. What most people do not understand about the rare earths sector is that the concentrate produced from mining is worth up to 80% less than the market will pay for processed REOs, which are easier to move up the value chain and into more advanced products.
Lynas is currently mining its Mt. Weld Deposit, but it can't make the concentrate from there into REO at the Malaysian processing facility. The environmental permit for Lynas to process there has been delayed by the Malaysian government for more than eight months. Additionally, production costs have risen twice already to well above original project economics. We do not like the trend we are seeing out of management.
Also, Australia now shows significant geopolitical risk. Last year, politicians attempted a mining super-profits tax. This year, Australian politicians successfully passed carbon cap-and-trade legislation tax that will hurt mining production costs. We are avoiding investing in the country entirely.
TCMR: What can we expect from the rest of the field in 2012?
JB: Because we are using a more conservative demand estimate for 2015, we believe there will be a forced shakeout/consolidation period in the rare earths market, similar to what is still happening in the uranium market. Volatility caused by the worsening macroeconomic situation, fluctuations in REE prices and the abundance of rare earth juniors too far away from production with little to no hope of getting the financing means more shakeout to come.
MD: That said, there are still many positive, bullish reasons why investors should still be willing to allocate capital to the rare earths space. The entire market is more than capable of growing at a 7% or more annual growth rate in terms of industrial demand for many years because of the growing acceptance of products that only rare earths currently make possible and the future products that will most likely come from continued innovation in rare earths.
However, investors really need to be discriminatory with their capital. Concentrate on the top tier in the sector. Then sprinkle some of the second-tier companies that aren't generating cash flow yet but have quality deposits or processing facilities. Those companies are Quest Rare Minerals Ltd. (QRM:TSX.V; QRM:NYSE.A) , Avalon Rare Metals Inc. (AVL:TSX; AVL:NYSE; AVARF:OTCQX), Tasman Metals Ltd. (TSX.V: TSM; OTCPK: TASXF), Stans Energy Corp. (HRE:TSX.V) , Ucore Rare Metals Inc. (UCU:TSX.V; UURAF:OTCQX) , Lynas, and Rare Element Resources Ltd. (RES:TSX; REE:NYSE.A) .
Below the second-tier companies is a watch list of dark horse companies that could leapfrog or surprise and jump ahead of the second tier that we listed because these companies are selling at extremely low valuations and are potentially takeover targets or JV partners for companies like Molycorp and Great Western Minerals.
In our opinion, Molycorp and Great Western Minerals Group are going to end up consolidating the rare earth sector in the next three to five years-unless Lynas gets its act together and joins the ranks of one of the companies doing the consolidating. Neo Material Technologies has not hinted that they are interested in a fully vertical integrated strategy, but they have been acquiring firms higher up in the value chain in processing rare earth magnets. In 2013 going forward, we expect dividends in the common shares from Molycorp, Neo Material Technologies, and maybe even Great Western Minerals.
MD: Over at Great Western's Steenkampskraal Mine, the all-important total rare earth oxide (TREO) grades are well above 10% TREO, some of the highest grades of any deposit in the world, which could translate into the most robust profit margins. Rock mined at Steenkampskraal is monazite, so in-demand HREE concentrations are high. The mine could be in production in less than 18 months. The company already has a license to store the thorium byproduct at the mine, and since the mine was operated decades ago before it was shut down, infrastructure is already present. The company owns two quality processing facility assets worth more than the current market cap. Management has already said demand is increasing so rapidly that another doubling of production capacity is possible after the first expansion is implemented in the next three years.
Great Western Minerals owns a few other promising REE deposits. It will be buying tailings from other South African miners. It has a deal negotiated with Aichi Steel, a subsidiary of Toyota Group, for Aichi to buy a large quantity of rare earth alloys and another long-term supply contract with German permanent magnet maker, Vacuumschmelze.
The downside is that the Steenkampskraal Mine is located in South Africa, which is politically unstable. However, Great Western's processing plants will comprise most of the profit and those facilities are located in the U.S. and U.K.
Also, although it is generating significant revenues, Great Western Minerals is still not profitable because it pays high input costs for processing materials. The company imports rare earth metals from China at great expense. Management has not done a good job of understanding the macroeconomic situation or of managing the cash levels at the company and because of this, management botched a financing in the last few months that it could have easily done at a much higher stock price earlier in the year and have diluted less. The company is not fully funded yet and is not completely self-sustaining. Cheaper materials from Steenkampskraal will generate higher profits. The company's other processing facility, Great Western Technologies in Michigan, is currently sitting idle because of a dearth of HREE materials.
Great Western Minerals is a long-term play. Financial statements are getting stronger with increasing gross profit margins due to the Less Common Metals processing plant. Great Western's stock price also benefited tremendously when the rare earth metals price rose from 2010 to July 2011. Since then, the stock price had a violent correction, mainly from declining rare earth prices and dilution. Investors will have to have a two- to three-year timeframe when investing with Great Western Minerals. The most important thing to watch is management execution. Can they can recover from the dilution? Will they bring the Steenkampskraal Mine to full production on time with no major setbacks? Will they reduce processing costs? And can they continue to expand profit margins? If management can execute, we would not be surprised if this stock goes up tenfold.
REE Dragon
Western Rare Earths Discoveries May Just Feed China
By Ted Niles
Between the increasing demand for rare earth elements (REEs) to supply global technological advance, and the 2010 reductions of export quotas by China, the non-Chinese world faces a global supply shortage. This situation presents opportunities but also challenges. The speakers at last week’s Technology Metals Summit 2012 in Toronto stressed two of those challenges in particular: the absence of a supply chain for REEs outside China and the considerable economic challenges to any company starting a rare earths mine given that absence.
China produces 97% of the world’s REEs. The obstacles facing a non-Chinese REE industry stem from the inordinate complexities of rare earths themselves. Gold, silver or copper are metals that require only a relatively simple process of refinement before they are sold into the market. But the process which any of the 17 chemical elements called rare earths must undergo before their end use in, say, one’s iPod, requires a degree of scientific and technological expertise unlikely to be found in any roomful of scientists and engineers. Unless, of course, that room is in China. This because since the Chinese began serious production of cheap rare earths in the late 1980s, the rest of the world has all but abandoned its interest in them as anything but an end user. This was conspicuously signalled by the 2002 closure of the largest US rare earths producer, Molycorp’s Mountain Pass REE mine.
Read the rest of this article. http://resourceclips.com/2012/02/07/ree-dragon/
The approval of Lynas Corp.’s (ASX:LYC) advanced materials plant (LAMP) in Gebang, Malaysia last week could start the clock ticking for many rare earth junior miners, as the facility, and others slated to come online in the next few years, is expected to increase non-Chinese output 10-fold by 2016 and a create a surplus of supply in rare earth markets.
The two year temporary license awarded on February 2 by Malaysia’s Atomic Energy Licensing Board (AELB) allows Lynas to begin processing rare earths imported from its Mount Weld property in Austalia. If Lynas complies with the terms of the license during this period, a permanent license may then be considered by the AELB.
Initial capacity at the $200 million plant will be 11,000 tonnes of rare earth oxide (REO) per annum when operations begin midway through the year, and this will eventually be ramped up to 22,000 tonnes per annum of REO.
But with 11,000 tonnes per annum of REO already one-third of current demand, first-movers such as Lynas could end up supplying the bulk of the rare earths market outside of China and squeezing out juniors who need strong rare earth prices to raise capital and to keep their projects commercially viable.
Improving supply could force many juniors out of the sector
With some experts forecasting production of REO outside of China to reach 60,000 tonnes per annum by 2016 and demand of just 55,000 tonnes per annum, rare earths markets could see a surplus of supply within 5 years that could restrain rare earth prices and trim the playing field down from the hundreds of companies that are currently operating in the industry.
In an interview with Mining Weekly on February 1, Jack Lifton of Technology Metals Research suggested that “clammed-up capital markets coupled with lower prices” would put close to 90 percent of publicly-listed rare earth juniors out of business over the next two years.
Riding soaring rare earths prices over the past two years following cuts to China’s output and export quotas, the number of junior miners in the rare earths sector ballooned.
A fallback in rare earths prices over the last half of 2011, however, was painful for many juniors who had been baking sky-high prices into their business models.
As the market continues to search for an equilibrium, Lifton believes that there will be at most 30 to 40 companies left by 2014.
“There are too many companies in the supply side and not enough on the demand side, so a lot of the supply side will be eliminated by the market effect that they will get no money,” remarked Lifton.
Great Western and Alkane nearing production
Among those that should be able to avoid being squeezed out of the market by entering into production within the next few years are Great Western Minerals Group Ltd. (TSXV:GWG) and Alkane Resources Ltd. (ASX:ALK).
According to Dudley Kingsnorth, Executive Director of Industrial Minerals Company of Australia, Great Western’s Steenkampsraal project in South Africa and Alkane’s Dubbo project in Australia, which is composed of more than a 25 percent mix of heavy rare earth elements (HREE), are two of a handful of projects that are more than likely to be fully operational by 2016.
Both companies have previously indicated they could begin initial production as early as 2012/2013, and although Kingsnorth’s projections are more conservative than those provided by the two companies, he believes Great Western and Alkane should be joining the ranks of active producers within the next four years.
Great Western Minerals Group
Corporate Update – As at February 7, 2012
Great Western Minerals Group Ltd. ("GWMG" or the "Company") Corporate Holdings:
1 former producing mine: Steenkampskraal mine in South Africa. GWMG holds controlling interest in the mine through its 100% shareholding of Rare Earth Extraction Co. Limited ("Rareco").
2 rare earth processing plants: Less Common Metals Limited ("LCM") in Birkenhead, U.K. and Great Western Technologies Inc. ("GWTI") in Troy, Michigan.
5 rare earth exploration projects: 1 at the Steenkampskraal site, 4 in North America.
GWMG Corporate Focus:
GWMG continues to execute its strategic plan to become a "first mover", as a fully integrated rare earth producer and processor, supplying its own rare earth inputs into its production and value-added cycle. Management discusses the strategy on the Company's website at http://www.gwmg.ca/html/news/corporate_videos/index.cfm.
GWMG Corporate Coverage:
Three analysts cover GWMG:
Byron Capital Markets: Analyst – Jon Hykawy, Contact points:
jhykawy@byroncapitalmarkets.com, 647-426-1656
Euro Pacific Canada: Analyst – Nick Agostino, Contact points:
nick.agostino@europac.ca, 416-649-4273
Cormark Securities Inc.: Analyst – Edward Otto, Contact points:
eotto@cormark.com, 416-943-6748
Note: GWMG does not recommend nor endorse any research reports.
GWMG: Planning to be an "early mover" as a fully integrated rare earth producer and processor, with key strategic assets already in place or under development:
Exploration ? Mining ? Mixed Chloride Production ? Solvent Extraction Separation ? Alloy Manufacturing
Exploration:
Steenkampskraal – Completion of Phase 1 of Drill Program:
As announced on January 30, 2012 GWMG has completed the first phase of the exploration program at the Company's 474 hectare Steenkampskraal rare earth property in South Africa. The drill program had two primary goals; firstly, to provide information in support of a fully compliant National Instrument 43-101 resource estimate report for the area within the main mine site and secondly, to collect a representative mini-bulk sample for metallurgical testing. The program comprised 39 diamond drill-holes totaling 3,780 meters. This included 17 holes for resource delineation (1,932 meters) and 22 holes dedicated to metallurgical sampling (1,848 meters). Assay results will be reported as they are received from the laboratories.
Steenkampskraal – Launch of Phase 2 of Drill Program:
GWMG is pleased to announce that the Company has also launched a 3,000 meter exploration program that will include on-strike and down-dip drill-holes at the Steenkampskraal site to test the extension of the mineralized vein system. The drilling has commenced targeting the strike extension of the monazite vein mineralization immediately west of the current mine site.
Steenkampskraal – Regional Drill Program:
In 2011 GWMG made application for Prospecting Rights surrounding the Steenkampskraal site. That application, for Prospecting Rights for an area of approximately 1,000 square kilometers, was not accepted initially and the appeal remains in progress. The Company remains of the opinion that a number of monazite occurrences outside the Steenkampskraal mine site area warrant exploration work.
Red Wine – Labrador Canada:
GWMG's joint venture partner in the Red Wine exploration project, Search Minerals Inc. ("Search"), has made several announcements in recent months. On January 20, 2012, Search announced that its phase three drilling program had extended the rare earth element mineralization to 400 meters depth at the project. Previously, on January 16, 2012, Search announced the discovery of high-grade rare earth element mineralization in the Merlot Prospect at the Red Wine Property. The Merlot Prospect is part of the 50/50 Search Minerals-GWMG Red Wine joint venture.
Mining:
GWMG is pleased to announce an update on its extensive refurbishment of the Steenkampskraal mine shaft and ancillary surface facilities.
Shaft Refurbishment:
The first 125 meters of the decline have been refurbished with 50 meters remaining to be completed. GWMG is also pleased to announce that the design and implementation of the decline, based on the work to date, has been reviewed and approved by the Republic of South Africa Department of Mineral Resources, Mine Safety Authority.
Modern, high-volume underground ventilation continues to be improved with the installation of two new fans at the base of the underground workings. The ventilation distribution system is designed to substantially mitigate radon measurements in the working areas.
Mine Management:
GWMG has continued to expand its core of expertise to ensure the Steenkampskraal project is developed in a timely, safe and cost efficient manner. As announced previously, David Kennedy is now the Chief Executive Officer of Rareco. His responsibilities encompass all of GWMG’s operations in South Africa. Vincent Mora is Steenkampskraal Project Director and Kwaw Kabaah was appointed Mine Manager late in 2011. Willie Schreuder was recently named the second Minesite Manager while Witker Zimba was previously announced as Superintendent of the separation plant that will be constructed near the Steenkampskraal project by Great Western GQD Rare Earth Materials Co. Ltd., the joint venture company in which GWMG holds a control position. Brent Jellicoe was previously named Director, International Exploration for GWMG and is overseeing the Steenkampskraal exploration program.
The Steenkampskraal team also includes a Radiation Protection Officer and radiation protection staff. They are supported by a Monazite Processing and Radioactivity management team that includes two highly qualified Radiation Protection Specialists.
The total staffing at Steenkampskraal, including employees and contractors, totals approximately 70 persons on any given day of operations.
Mine Equipment and Infrastructure:
The headgear and the winder for the decline have been fabricated and are now at site. The foundations are being constructed for imminent installation of the head gear along with all transfer hoppers and steelwork.
The Steenkampskraal site now contains a full complement of ancillary buildings. This includes management offices, change houses and laundry service (in compliance with the South African National Nuclear Regulations). Other buildings now at site include mine workshops and storage facilities. As well, a geological office and core storage, workshops and numerous lay-down pads have been constructed, proving beneficial to the success of the Steenkampskraal exploration program. The infrastructure for satellite communications is now at site, enabling internet use, and creating greater efficiency.
Potable and mine recirculation water systems are now in place. The reverse osmosis plant has been successfully installed with a capacity of 18,000 litres per hour. This capacity is important to management's priority of continuous re-use of the available water resource, thereby minimizing overall water use at site.
Photographs of the continual progress being achieved at the Steenkampskraal mine site, on a month by month basis, are available on the GWMG website at
http://www.gwmg.ca/html/projects/mining/steenkampsraal_update/index.cfm.
Mixed Chloride Production:
The design of the mixed chloride plant, to be constructed at the Steenkampskraal mine site, is now complete. This work has been undertaken by DRA Mineral Projects (Pty) Ltd. ("DRA") of South Africa. DRA was chosen based on criteria that included its strong reputation for managing projects with a "zero harm" focus and upholding world class quality standards, systems and procedures, based on ISO standards. With the design phase complete, the costs and phasing of the construction of the mixed chloride production plant are now being updated and refined at significantly higher levels of detail and confidence.
Solvent Extraction Separation:
GWMG and Ganzhou Qiandong Rare Earth Group Ltd. ("GQD") of China established an incorporated joint venture for the design, construction and operation of a rare earth separation plant, to be located in the Steenkampskraal region, as announced on January 10, 2012. The signing of the joint venture agreement and the incorporation of Great Western GQD Rare Earth Materials Co. Ltd. followed the principles set out in the Heads of Terms between the two companies.
Throughout the discussions on the joint venture agreement, the two companies undertook a significant amount of design and environmental work in anticipation of successfully entering into the joint venture. GWMG and GQD are now actively engaged in the work required to move the separation plant through the final design, construction and operation stages.
Alloy Manufacturing:
The capacity of GWMG's wholly owned subsidiary Less Common Metals Limited received a significant boost, by approximately 50%, as announced on January 31, 2012. The addition of a new furnace located at Hooton Park, in close proximity to LCM's existing facilities, enables LCM to produce alloys in "flake" form, as opposed to the traditional ingots, in response to customer demand. LCM plans to add new furnaces in response to the increasing demand from its growing global customer base.
Photos of the new furnace and facility can be found on the GWMG website at
http://www.gwmg.ca/html/projects/processing/lcm-first-pour-2012/index.cfm.
Corporate:
GWMG has agreed to issue 2,072,484 shares at a deemed price of $.63 per share to settle amounts owing to Mr. Trevor Blench in connection with the acquisition of Rareco and the exercise of the option granted by Mr. Blench in 2010. The issuance of such shares is subject to TSX Venture Exchange acceptance.
All in... watching only the EOW #'s... this week: +33.33%
The markets can't regulate themselves, we need a form of one world government to scold people who can't trade fairly... that must mean when I recognize a ggod stock like Great Western, I can't buy because it is unfair to the losers on the other side of the trade???!!! Yikes!!!
In the meantime, +12.50% today!!!
Rare Earth Demand on the Upswing - North American and Australian Explorers Poised to Benefit
Last Update: 2/2/2012 8:20:34 AM
NEW YORK, NY, Feb 02, 2012 (MARKETWIRE via COMTEX) -- Rare Earth stocks had a strong January. The Market Vectors Rare Earth/Strategic Metals ETF - which seeks to replicate the price and yield performance of foreign and domestic equity securities of publicly traded companies primarily engaged in a variety of activities that are related to the producing, refining and recycling of rare earth and strategic metals and minerals - skyrocketed an impressive 18.6 percent last month as favorable economic data raised hopes that demand for the 17 rare earth metals would strengthen. The Paragon Report examines investing opportunities in the Rare Earth Industry and provides equity research on Lynas Corporation Limited (pinksheets:LYSCF) (asx:LYC) and Great Western Minerals Group Ltd. (GWG) (pinksheets:GWMGF). Access to the full company reports can be found at:
www.paragonreport.com/LYSCF
www.paragonreport.com/GWG
A World Trade Organization (WTO) appeals panel confirmed Monday that China's export restrictions on raw materials such as bauxite and magnesium violated global trade rules. While rare earth metals were not part of Monday's WTO ruling, Reuters argues that the WTO ruling against China's restrictions on raw material exports could force changes to some of its rare earth policies.
A number of U.S. lawmakers urged the United States to use the WTO decision to launch a new case to force China to lift its rare earth export restrictions.
The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the rare earth industry register with us free at www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters.
Shares of Lynas Corporation had a strong January, surging roughly 34 percent. Earlier this week, Reuters reported that Lynas warned against any move by Malaysia's political opposition to shut the company's $200 million rare earths processing plant, saying such action would deter other foreign investment in the country. Lynas is awaiting a temporary license to start operating the rare earths plant and is expected to receive a decision from the cabinet of Prime Minister Najib Razak next week.
The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at http://www.paragonreport.com/disclaimer
SOURCE: Paragon Financial Limited
This could be a 100 bagger from here... give it time and current economics and all the great company fundamentals.
I bought Cameco stocks at $20.00 and sold at $40.00 last year,
what I'm getting at here is this guy knows his stuff and GWG is now setting up to go on the Toronto and New York stock exchanges.
Look out when this happens.
(2) During his 15 year career with Cameco Corporation, one of the world’s largest uranium companies, Mr. Kiss held increasingly senior positions including vice president, corporate development and power generation. Amongst a broad range of experiences, as senior legal advisor he participated in preparations for Cameco’s initial listings on the Toronto and New York stock exchanges, as special project co-ordinator he oversaw the development of several significant domestic and international joint venture agreements and projects, and as marketing director, North America, he negotiated numerous long term supply agreements. He has also been directly involved in a wide range of acquisitions and varied joint venture arrangements
TSX:GWG 10 BAGGER
No argument that we are all deeply interested in what secrets that old mine holds. . . and then how South A supports GWG in doing with it.
This is getting ready to take off.
(1)Great Western Minerals Group Ltd. ("GWMG" or the "Company", TSX:V – GWG) is pleased to announce that its wholly owned subsidiary, Less Common Metals ("LCM"), has successfully carried out the first full-scale melt with LCM's newly acquired furnace. The first pour was undertaken on Friday, January 27, 2012 at LCM’s new plant located in Hooton Park in Birkenhead, United Kingdom.
The installation of the new furnace, which began in November, 2011 and was completed by mid-January, 2012, was undertaken by a team comprised of engineers from the furnace supplier alongside LCM personnel. After extensive testing of the power, water, vacuum and control systems, the furnace was approved to commence melting trials of Neodymium-Iron-Boron alloys for permanent magnet applications.
The subsequent trials, which will continue into February, will focus on the production of alloys that fully conform to detailed customer specifications.
(2) During his 15 year career with Cameco Corporation, one of the world’s largest uranium companies, Mr. Kiss held increasingly senior positions including vice president, corporate development and power generation. Amongst a broad range of experiences, as senior legal advisor he participated in preparations for Cameco’s initial listings on the Toronto and New York stock exchanges, as special project co-ordinator he oversaw the development of several significant domestic and international joint venture agreements and projects, and as marketing director, North America, he negotiated numerous long term supply agreements. He has also been directly involved in a wide range of acquisitions and varied joint venture arrangements
(3) Great Western Minerals Group Ltd. ("GWMG" or the "Company", TSX:V — GWG) is pleased to announce that the joint venture agreement ("Agreement") with Ganzhou Qiandong Rare Earth Group Ltd. ("GQD") of China for the construction of a rare earth separation plant in South Africa has been completed and signed
(4)These investigations have two primary goals; firstly, to provide information in support of a fully compliant National Instrument 43-101 resource estimate report and secondly, to focus on a possible expansion of the resource at Steenkampskraal through testing the down-dip extension of the main structure
More capacity that is all customer driven, what an opportunity and they want more capacity as we speak, that's why the second will come about in 2012.
GREAT WESTERN MINERALS GROUP'S LCM SUCCESSFULLY
COMPLETES FIRST POUR WITH NEW RARE EARTH FURNACE
January 31, 2012 - Saskatoon, Canada: Great Western Minerals Group Ltd. ("GWMG" or the "Company", TSX:V – GWG) is pleased to announce that its wholly owned subsidiary, Less Common Metals ("LCM"), has successfully carried out the first full-scale melt with LCM's newly acquired furnace. The first pour was undertaken on Friday, January 27, 2012 at LCM’s new plant located in Hooton Park in Birkenhead, United Kingdom.
The installation of the new furnace, which began in November, 2011 and was completed by mid-January, 2012, was undertaken by a team comprised of engineers from the furnace supplier alongside LCM personnel. After extensive testing of the power, water, vacuum and control systems, the furnace was approved to commence melting trials of Neodymium-Iron-Boron alloys for permanent magnet applications.
The subsequent trials, which will continue into February, will focus on the production of alloys that fully conform to detailed customer specifications.
GWMG President and Chief Executive Officer Jim Engdahl said, "The success of the first round of testing with LCM’s new furnace speaks highly of the level of expertise that resides within the team at LCM. The first pour with the new furnace is a significant step forward in the continued advancement of our "mines to markets" strategy as it increases our alloy production capacity by almost 50%. The newly acquired furnace positions our Company to further satisfy the requirements of our global customer base and, in the process, solidify the position of GWMG as a pre-eminent global supplier of rare earth products."
Photos and a brief video of the first pour with LCM's new furnace can be seen on the GWMG website at www.gwmg.ca/lcm-first-pour.
Yes, saw the NR. It got me excited, until I read it . . . very misnamed/mistitled. Should be more like "drill and sampling completed for first phase REE evaluation program" as evaluation cannot even start until they get those assays . . . well, except the metallurgic processes part.
Great Western Minerals Group Completes First Phase of Steenkampskraal Rare Earth Evaluation Program
Last Update: 1/30/2012 9:25:43 AM
SASKATOON, SASKATCHEWAN, Jan 30, 2012 (MARKETWIRE via COMTEX) -- Great Western Minerals Group Ltd. ("GWMG" or the "Company") (tsx venture:GWG) (otcqx:GWMGF) is pleased to announce that it has completed the first phase of the exploration program at the Company's Steenkampskraal rare earth property in South Africa.
These investigations have two primary goals; firstly, to provide information in support of a fully compliant National Instrument 43-101 resource estimate report and secondly, to focus on a possible expansion of the resource at Steenkampskraal through testing the down-dip extension of the main structure. The program included 39 diamond drillholes totaling 3,780 meters. This included 17 holes for resource delineation (1,932 meters) and 22 holes dedicated to metallurgical sampling (1,848 meters).
Within the resource evaluation component of the drill program, 17 HQ drillholes were completed. Four holes did not intercept obvious mineralization, likely due to the pinch and swell of the vein system. 125 of 143 samples of monazite and mineralized host rock have been shipped to SGS Lakefield in Canada ("SGS") for assay. Additionally, 133 of 173 underground channel samples of monazite and mineralized host rock collected from throughout the three levels of the mine, undertaken as a verification of Anglo American's work prior to the mine closure with the same survey control points, have been sent to SGS for assay. 353 representative samples collected from throughout the historical tailings dams and 78 representative samples from throughout the historical lower grade rock dumps were also shipped to SGS for assay.
Within the metallurgical mini-bulk sampling component of the program, 22 HQ drillholes were completed in 2011 providing 172 kilograms of monazite. An additional 534 kilograms of monazite were recently collected from underground in-situ mineralization through channel sampling in the historic mine workings. The combined 706 kilograms of representative material was shipped to Mintek of Johannesburg, South Africa ("Mintek") for metallurgical characterization as of today. As well, 350 kilograms of representative vein ore and host rock that was collected from underground sites will be shipped to Mintek today for XRF recognition trials. Previously, 2,087 kilograms of tailings dam and rock dump material had been sent to Mintek for metallurgical characterization in November 2011.
Assay results will be reported as they are received from the laboratories.
Brent Jellicoe, B.Sc., P.Geo, Director of International Exploration for GWMG, is the Qualified Person responsible for reviewing the contents of this news release.
Interesting commentary, and forecast, Spartacus G
So why would GWG consider entering into a JV in order "to accommodate their ores on a partnership basis"
It seems that they will be in a position to dictate terms for concentrate off-take agreements, especially after establishing cash-flow from what they already have underway.
GWMG will be the first ever junior rare-earth miner outside of China to become a profitable producer of commercial quantities of heavy rare earth forms, beyond separated purified HREOs.
I note that GWMG's new partner is an experienced processor, which has been providing GWMG's Less Common Metals (LCM) subsidiary with pure rare-earth metals for manufacturing into rare-earth permanent magnet alloys, and other compounds, for LCM's customers. I further note that among those customers is now to be Japan's Aichi Steel, a manufacturer of rare-earth permanent magnets so large, as to be able to take all of GWMG's projected production of relevant rare earths from Steenkampskraal.
GWMG will be the target for discussion of a joint venture or even an acquisition, by many good juniors with HREOs in their ore bodies. They will all basically propose that the GWMG rare-earth separation plant be expanded, to accommodate their ores on a partnership basis. This is because the most added values available to rare earths that can be added by a mining company are done by moving downstream towards the production of pure metals. Up to that point in the value chain, we are speaking of mining engineering and chemical metallurgical engineering. When one reaches the next stage, that of producing magnet alloys and magnets, one has reached the provenance of skilled specialists in materials and physics. Such skill sets are not bought; they are earned with Darwinian ruthlessness, in the real world of high-tech product development and manufacturing.
This will start very soon and they already have the customer base.
Permanent Magnets Nd, Pr, Dy, Tb, Sm
NiMH Batteries, metallurgical
La, Ce, Pr, Nd
Can anyone provide info on what elements GWG will actually find in the rejuvenated mine in S.A. Are the concentrations worth it today? or 2 years from today?
thanks for all the info to date; superb work
This is a company that is still overlooked by a large portion of the investors interested in the rare earths space.
SmallCapPower.com: What’s your 12-month target on GWG?
Jon Hykawy: Currently it’s $3.40, which looks a little extravagant compared to the trading range that it’s in but, frankly, it still only represents a $1 billion to $1.5 billion market cap, and this is a company that we believe, when it’s in full production, will generate cash flow of $300 - $400 million a yea
Hykawy: Our absolute top pick in the space would be Saskatoon-based Great Western Minerals Group. This is a company that is still overlooked by a large portion of the investors interested in the rare earths space. It is a downstream manufacturer of advanced rare earth alloys, rather than a simple miner. The only reason that the company is reopening a mine in South Africa is because of uncertainty with respect to getting the supply of materials that they need to make magnet alloys. Without being able to reliably get neodymium and dysprosium from the Chinese – an issue that they saw years ago – the least expensive way for GWG to reliably get those materials was to reopen a mine.
The link to the full interview is:
http://www.smallcappower.com/articles/interview-with-jon-hykawy-20012012.html
Jon Hykawy: Our absolute top pick in the space would be Saskatoon-based Great Western Minerals Group. This is a company that is still overlooked by a large portion of the investors interested in the rare earths space. It is a downstream manufacturer of advanced rare earth alloys, rather than a simple miner. The only reason that the company is reopening a mine in South Africa is because of uncertainty with respect to getting the supply of materials that they need to make magnet alloys. Without being able to reliably get neodymium and dysprosium from the Chinese – an issue that they saw years ago – the least expensive way for GWG to reliably get those materials was to reopen a mine.
But what people don’t really appreciate is the leverage that’s given to anybody participating in this downstream space. A company making good magnet alloys, which are necessary to make really high-quality rare earth magnets, can expect to sell those alloys for up to US$300/kg. This is an alloy that only contains about 30% neodymium. The rest of the material is relatively cheap iron and boron. So, even at the peak of neodymium pricing, these magnets contained about US$100 of neodymium. That means you’re selling US$100 of neodymium for US$300. That’s not bad leverage. But when Steenkampskraal reaches production, my estimates for Great Western would suggest that this sort of US$300/kg alloy could be produced by GWG for probably less than US$15/kg or US$20/kg.
And in no circumstance do we see the price for high-quality magnet alloys dropping below US$100/kg. So, if you’re looking at an $80 or $85 margin on one kilogram of magnet alloy, you’re not doing too badly. The cash flow that a company like GWG can generate is fairly robust.
SmallCapPower.com: What’s your 12-month target on GWG?
Jon Hykawy: Currently it’s $3.40, which looks a little extravagant compared to the trading range that it’s in but, frankly, it still only represents a $1 billion to $1.5 billion market cap, and this is a company that we believe, when it’s in full production, will generate cash flow of $300 - $400 million a year.
SmallCapPower.com: And your second pick?
Jon Hykawy: Our second pick actually is one that we’ve had a “sell” on for a long time, but the market has chosen to drive the stock down to the point where we actually believe there’s considerable value in it, and that’s Molycorp.
Molycorp, too, is a downstream producer. And, again, we think that is very important because if you follow the pricing through, what we see is that magnet-making is a very good multiplier for revenue. Molycorp just recently signed a joint-venture agreement with two Japanese companies that will see the partners take the lanthanum and cerium output from Molycorp’s Mountain Pass mine in California and sell that to partners interested in taking that material and putting it into the catalyst space.
But once Molycorp starts producing neodymium, it will then take that through its supply chain all the way to building magnets, adding value at each level. We could see Molycorp cash flowing at US$500 million a year once it’s in Phase Two of production. And that easily supports the target that we have on them, which is $40 at this point.
SmallCapPower.com: And your third pick?
Jon Hykawy: The third name we like is Matamec Explorations Inc. (TSX.V:MAT). It has been criticized lately for the deal that it did with Toyota Tsusho. But it is a very interesting name to us because of the very simple metallurgy that’s associated with their deposits. The deposits that comprise Matamec’s Kipawa project are relatively low-grade but have a high percentage of heavy rare earths. Once Matamec is in production, it will produce a larger volume of heavy rare earths than either Great Western Minerals Group or Molycorp. But Matamec likely won’t be in full production of finished concentrates until sometime in 2015.
But this pick is really about the metallurgy, which is very straightforward. All Matamec is doing is using a magnetic separation technique to upgrade their milled ore. They then take the rare earth concentrate and put it in sulphuric acid at room temperature for a couple of hours. The acid consumption is very low, and there’s no heat involved. That means the cost of their hydrometallurgy is very low. And so Matamec should eventually reap the advantages of selling valuable heavy rare earths with very low processing costs.
SmallCapPower.com: Do you believe that Matamec President Andre Gauthier secured enough in return for what he gave up to Toyota Tsusho?
Jon Hykawy: I’ve had discussions with him about that. I think it’s fair to say we believe that they could have received more. On the other hand, the argument that we’ve been given and one that we have to agree with is that the rare earths space includes about 400 names that are all trying to come to market and the rare earths industry can’t support 400 new projects. To reach production, a rare earths mine has to have four things: a tractable deposit; an economic deposit; a customer for its end-product, and the financing to build it. Without all of those, you don’t have a mine. What Matamec gained in signing its agreement with Toyota Tsusho – and doing the best deal that they believed they could do at the time – is access to financing and access to the customer. And that means that Kipawa is fully on track to become a mine. Not too many other companies in this space can say that. And you can’t quibble with the fact that you’ve still got a good investment return for shareholders. Our target on the company is $0.95 and carry a “buy” recommendation on it because, frankly, that’s what their portion of this project is worth.
Scoreboard for the week: +3.85%
Great Western Minerals Group and Ganzhou Qiandong Rare Earth Group Sign Rare Earth Separation Agreement
Press Release: Great Western Minerals Group Ltd. – 2 hours 58 minutes ago
SASKATOON, SASKATCHEWAN--(Marketwire -01/10/12)- Great Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX-V: GWG.V - News)(OTCQX: GWMGF.PK - News) is pleased to announce that the joint venture agreement ("Agreement") with Ganzhou Qiandong Rare Earth Group Ltd. ("GQD") of China for the construction of a rare earth separation plant in South Africa has been completed and signed.
Pursuant to the Agreement, the newly created joint venture company, Great Western GQD Rare Earth Materials Proprietary Limited ("GWGQD") will immediately finalize the preliminary work already underway on the process design and environmental components of the separation plant and move toward construction of the facility.
A wholly owned subsidiary of GWMG will own mixed rare earth chlorides, which GWGQD will process under a tolling agreement. The Agreement provides that GWGQD will separate mixed rare earths into products usable by GWMG's wholly owned subsidiary, Less Common Metals Limited ("LCM"), and third party customers.
Under the terms of the Agreement, GQD receives 25% of the shares of GWGQD for its contribution to design and construction of the facility, and $7.5 Million of GWMG shares to be paid over three years contingent on the facility being fully commissioned and operating effectively, and fees and/or dividends for providing long term management support for the operation of the separation facility.
The separation plant will be constructed in close proximity to GWMG's Steenkampskraal operation where the previously operating mine is being refurbished and readied in anticipation of rare earth mining.
GQD is a highly respected processor of Rare Earth oxides and metals with over twenty years of operational experience in China during which time it has been a significant supplier of metals and oxides to LCM.
GWMG President and Chief Executive Officer Jim Engdahl said, "This agreement represents one of the single most significant milestones in the history of GWMG. We are exceptionally pleased to have concluded such an important agreement between our Company and GQD for the construction and operation of a rare earth separation plant. Our agreement with GQD, with its two decades of rare earth processing experience, means that we have successfully engaged a rare earth industry leader as a joint venture partner to execute the separation component of our Company's plan to be the most fully integrated rare earth processing company outside of China."
Mr. Bin Gong, Chief Executive Officer of GQD said, "The signing of this joint venture agreement between GQD and GWMG represents a landmark development in the rare earth industry. This agreement sets the foundation for our two companies to proceed to full development of a separation facility within our joint venture. While it may have taken us longer than expected to get to this point, the complexities of such a groundbreaking agreement should not be underestimated. However, we are now in a position to allow the joint venture to proceed with all haste. Everybody at GQD looks forward to a long and rewarding relationship with GWMG."
Great Western Minerals Group Ltd. is an integrated Rare Earths processor. Its specialty alloys are used in the battery, magnet and aerospace industries. Produced at the Company's wholly owned subsidiaries Less Common Metals Limited in Birkenhead, U.K. and Great Western Technologies Inc. in Troy, Michigan, these alloys contain aluminium, nickel, cobalt and Rare Earth Elements. As part of the Company's vertical integration strategy, GWMG also holds 100% equity ownership in Rare Earth Extraction Co. Limited, which owns a 74% equity interest in the Steenkampskraal Mine. In addition to an exploration program at Steenkampskraal, GWMG also holds interests in four active Rare Earth exploration and development properties in North America.
Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of GWMG as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to the successful construction, commissioning and operation of the separation facility, refurbishment activities and reliance on third parties to meet projected timelines, the results of the exploration program at Steenkampskraal, a resource estimate and commencement of production at Steenkampskraal, satisfaction of the conditions precedent with respect to GWMG's offtake agreement, receipt of all required approvals (including those relating to the commencement of production at the Steenkampskraal mine) and risks, uncertainties and other factors that are beyond the control of GWMG, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve or resource estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although GWMG believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of GWMG contained in this News Release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement and the risk factors contained in GWMG's current annual information form available at www.sedar.com.
More good news, they are they are recruiting a very strong team to take this really far.
GREAT WESTERN MINERALS GROUP
ANNOUNCES MANAGEMENT APPOINTMENT
January 5, 2012 - Saskatoon, Canada: Great Western Minerals Group Ltd. ("GWMG" or the "Company", TSX:V – GWG) is pleased to announce the appointment of Vernon Kiss as Vice-President, Corporate Development and Strategic Initiatives.
In this new role, Mr. Kiss is responsible for oversight and direction of GWMG’s corporate and strategic planning processes. Additionally, he is responsible for the assessment and execution of corporate development initiatives, including acquisitions, partnerships and joint ventures that contribute to the achievement of GWMG’s vision to be a fully integrated rare earth producer.
During his 15 year career with Cameco Corporation, one of the world’s largest uranium companies, Mr. Kiss held increasingly senior positions including vice president, corporate development and power generation. Amongst a broad range of experiences, as senior legal advisor he participated in preparations for Cameco’s initial listings on the Toronto and New York stock exchanges, as special project co-ordinator he oversaw the development of several significant domestic and international joint venture agreements and projects, and as marketing director, North America, he negotiated numerous long term supply agreements. He has also been directly involved in a wide range of acquisitions and varied joint venture arrangements.
A member of the Saskatchewan Law Society since 1984, Mr. Kiss holds a B.A. (Psychology) and a Bachelor of Laws from the University of Saskatchewan and is a masters candidate in the University of Saskatchewan School of Environment and Sustainability.
GWMG President and Chief Executive Officer Jim Engdahl said, “Our Company has taken a significant step forward by to attracting Vern Kiss to this vice-president position. His extensive background with Cameco, as it successfully transitioned into being one of the globe’s largest uranium producers, will be of great benefit to GWMG, its management team and its shareholders.”
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Great Western Minerals Group is an integrated Rare Earths processor. Its specialty alloys are used in the battery, magnet, automotive, and aerospace industries. Produced at the Company's wholly-owned subsidiaries Less Common Metals Limited in Birkenhead, U.K. and Great Western Technologies Inc. in Troy, Michigan, these alloys contain aluminium, nickel, cobalt and Rare Earth Elements. As part of the Company's vertical integration strategy, GWMG has signed an Off-take Agreement for 100% of the Rare Earth Elements produced at the former producing Steenkampskraal mine in South Africa and holds 92.6% ownership in Rare Earth Extraction Co. Limited, the owner of the Steenkampskraal mine. GWMG also holds interests in eight Rare Earth exploration and development properties in North America and Africa. |
Great Western Technologies, a 100% owned subsidiary, is a leading production facility in North America for extractive metallurgy, mineral processing, and specialty alloys manufacturing in the rare earth materials market. |
Less Common Metals, a 100% owned subsidiary, is a world leader in the manufacture and supply of rare earth based alloys and high purity metals focused on the permanent magnet industry. With considerable experience in the production of materials to tight compositional tolerances and controlled microstructures, LCM offers an innovative and highly flexible approach to a wide range of material requirements. |
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