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SIAF: That's the only one I bought today. Seems to have significant strength.
RINO: Just draw a bunch of pipes!
"In the desulphurizing of SO.sub.2 - and hydrogen halide-containing flue gases by catalytically oxidizing the sulphur dioxide on moist active carbon at a temperature of from 45.degree. to 70.degree. C. with the formation of 3 to 20% dilute sulphuric acid, the improvement which comprises contacting the dilute sulphuric acid with the hot flue gases to be desulphurized so as to evaporate water resulting sulphuric acid of a concentration of from 60 to 85%, and removing by evaporation the hydrogen chloride and hydrogen fluoride dissolved in the dilute sulphuric acid. Advantageously evaporation is carried out in two scrubbing stages, the hydrogen chloride and hydrogen fluoride being removed, by vacuum evaporation or by stripping with air or flue gas, from a mixture of the dilute sulphuric acid from the second scrubbing stage with the concentrated sulphuric acid from the first scrubbing stage, the mixture having the H.sub.2 SO.sub.4 concentration of from 40 to 70%."
http://www.patents.com/process-desulphurizing-flue-gases-4670235.html
CELM: Not sure if I have this correct, but per my notes below, if they hit guidance of .25 in Q4 then they get .74 for the year. That's *if* the .13 EPS Q3 assumption is correct due to the 2.4M stock compensation expense.
Data from the following sources:
Q1: http://szmotor.investorroom.com/index.php?s=43&item=15
Q2: http://szmotor.investorroom.com/index.php?s=43&item=24
Q3: http://finance.yahoo.com/news/China-Electric-Motor-prnews-939787336.html?x=0&.v=1
LYC sitting at 1.4, up 11% two hrs into trading. Looks like your bottom call is spot on.
AERL: FWIW, hit piece on AERL (http://www.timothysykes.com/2010/11/asia-entertainment-resources-ltd-aerl-a-highly-questionable-macau-penny-stock/)
Heated discussion on CGS. Adds a little humor to an otherwise bland trading day (http://investorshub.advfn.com/boards/read_msg.aspx?message_id=56486529)
Just checked out eIBD and it does in fact show EPS rating at 99. Hopefully it'll get corrected shortly. Yesterday, CCME showed as their most viewed, so I'm sure it's already getting some attention. Perhaps there's just a little lag.
That's great news. I noticed that the online EPS rating dropped from 76 to 73 and was concerned that we'd potentially lose this catalyst.
CHBT: Sold my Nov 12.5s yesterday. Should have sold my Nov 10s as well. Arrrrgh. Oh well, NEP Jan 7.5s looking oh so nice, so hopefully will more than make up for it.
CHRM: Charm #1 in Volume of Successful Bids at CCTV Primetime Auction for 9th Time in a Decade
http://finance.yahoo.com/news/Charm-1-in-Volume-of-prnews-2426295537.html?x=0&.v=1
Bubble?
"NICK CURTIS, EXECUTIVE CHAIRMAN, LYNAS
"The underlying commodity price rise is not a speculative price rise. It's a price rise that is a function of real demand being unable to be met by real supply. So what I get at the underlying price rise itself isn't a bubble.
"
http://www.reuters.com/article/idAFN0423600520101108?pageNumber=1 (page 2)
Rare Earth Bubble? Not much of an article, but some interesting opinions anyhow.
http://www.reuters.com/article/idAFN0423600520101108?rpc=44
I just bought back in as well. It's been hammered in past couple of weeks.
NEP: My last buy on 11/4 @ .80 had commons at about $7.13. Previous buy on 10/29 @ .5 had commons at $6.88.
NEP Jan $7.5s sitting at a buck. Nice. CHBT making a little move ahead of earnings tomorrow as well.
CELM: I've been wondering if some CCME profits are making there way there. Perhaps a few headed to ZSTN as well.
Surprised to see a 5k block @$1.29 this morning seeing as LYC.AX closed @ $1.19.
Rames: Kudos once again for you most excellent site. I was purusing it this morning and stumbled upon the portfolio of stocks under attack. I had been wondering recently how the various companies have done since the barrage of short attacks, and low and behold, you've put that together very nicely.
I've been using these attacks as opportunities to buy since the Citron report, and it's worked out reasonably well. Amazing that one could have achieved a 45% return since 9/21 by simply buying the various companies under attack. Thanks again for all the hard work that must go into putting this together.
Almost sold my Nov 10s and 12s yesterday in early trading, and am hoping that I made the right call. We'll see. Keeping the commons for the long haul.
I have the same concern with CCME, but the trailing P/E is still under 10, so I'm holding tight. A divi announcement would send this through the roof.
I'm currently holding CHBT Nov 10's and 12.50's and am tempted to cash out prior to earnings.
Just over paid for some more NEP Jan 7.5's, but what the heck.
YONG: Anyone buying Dec calls? Dec 9's look enticing, but there's virtually no open interest. Granted they didn't become available until after Oct options expiration.
1mikep: That's the general plan. I currently have a CB of .66 cents on my Jan 7.50's and plan to buy more this morning. GL.
CCME: Rato: I typically lay down about 25% of what I would have put into commons, or if it's really speculative, then I what I think I could comfortably lose without pulling my hair out.
CDTID: Are you banking on massive short covering, coupled with a low float?
ZSTN: Back in @7.25. Gotta love shorting alpha.
CHNC: Been in that one for quite a while. Talk about no liquidity. Sheeesh. Same experience with CCLTF, but at least the NASDAQ news has that one moving a bit.
Depends on a lot of factors: where you think the stock is headed, the time premium, volatility, greeks, etc. Not a safe bet by any means if you're new. Per a previous post, try some paper or fake trading first, as well as some tutorials. GL.
HRBN: Anyone grab any calls after the smear article a couple of days back? Grabbed some Dec $20s @ $1.75. It's steadily on the rise. I swear, one can make money by just betting on whomever is getting smeared by Shorting Alpha blogs. I bought CHBT commons and options a while back on the same premise.
NEP: Grabbed some more Jan 7.50 @.5. eom.
Mickey Fulp Talks Energy & Rare Earths
http://www.resourceinvestor.com/News/2010/10/Pages/Mickey-Fulp-Talks-Energy--Rare-Earths.aspx?channel=7
TSM mentioned as one of his favorites.
Interesting interview: Mickey Fulp Talks Energy & Rare Earths
http://www.resourceinvestor.com/News/2010/10/Pages/Mickey-Fulp-Talks-Energy--Rare-Earths.aspx?channel=7
Snippet on REEs below. Towards the bottom is a mention of MLLOF
"TER: You are also heavily involved in the rare earth element (REE) sector. What's your take on the sector at this point in time?
MF: It is the hottest commodity space around just like the Yukon is the hottest area play. Valuations have gone through the roof over the last couple of months. With a speculative play like this, it's necessary to separate the few contenders from the many pretenders early on. I think I've done that. The stocks have been on quite a run since early July, and the companies that I'm invested in average returns of about 300%. This entire sector is an overvalued speculation right now.
TER: Some might point to China's export restrictions, but that was last year. What's causing the sudden move in the sector this summer?
MF: China further restricted export quotas this summer. The country announced that it was going to crack down on the black market in south China, which is estimated to supply from 20%–33% of the market. This morning I heard an estimate that two-thirds of the supply of heavy rare earths (HREEs) is coming from the black market. China is trying to nationalize its heavy rare earth element sector and force the small and illegal miners to become parts of larger companies.
There is also increased awareness about the sector in the US. I think the US retail investor is driving this market. A final catalyst – and perhaps the biggest – was Molycorp Inc.'s (NYSE:MCP) initial public offering (IPO) on the New York Stock Exchange at a little less than $14/share. It was not well received and went down to $12. During the past six weeks, however, the stock has reached a high of $30.
TER: For investors who aren't already in rare earths, is it too late to get into the game?
MF: I don't think they're too late, but they have to be very selective. Let me give you some examples. In early July, you could've bought Rare Element Resources Ltd. (TSX.V:RES; NYSE.A:REE), Quest Rare Minerals Ltd. (TSX.V:QRM) and Avalon Rare Metals Inc. (TSX:AVL; OTCQX:AVARF) on weakness for less than $2. Quest went to something like $5.50 before it pulled back to about $4.50, and Avalon went above $4. Rare Element has been the real star—that stock touched $9.90. Buying stocks on weakness in a bull market is a strategy that will work.
There is a lot of risk involved in buying these stocks; however, Avalon just raised $30 million for its feasibility study. Quest is in the middle of raising $50 million, which will take it through feasibility and provide working capital.
Rare Element Resources also is looking at a major equity financing in the near term, something in the range of Quest and Avalon. These companies have gone to the next level. Probably my favorite in the sector right now is Scandinavian explorer Tasman Metals Ltd. (TSX.V:TSM; Fkft:T61; OTCPK:TASXF). It was a $0.51 stock and has gone as high as $2. It's pulled back now to around $1.90; I think there's upside with Tasman Metals.
TER: You mentioned risk in buying these stocks. Yet all of them seem to be going up and with some type of financing. The sector is really hot so companies probably get the capital easily. Where does the risk come in?
MF: There's extreme risk in this sector because it is highly dependent on the economic health of the world. We saw that with the "flash crash" and the Greek crisis in late May – late June. These better rare earth element explorers took major hits to their market capitalization. If we don't have a robust world economy, these stocks will suffer.
TER: One of the arguments I've heard is that rare earth metals are becoming a strategic metal for governments and military uses, so there's some impetus for the US to ensure it can produce its own rare earths. Are you discounting that argument?
MF: That's part of the equation in the US for sure, but less so outside of our country because US defense operations are so much larger than any other country in the world. What portion of HREE demand goes to the military? I have no idea.
Here's what I see—in the US, the United Steelworkers Union is asking the government to file a complaint with the World Trade Organization (WTO) about China's export restrictions and there are ongoing congressional hearings, as well as the House passage of a bill that sets up studies and committees to institute national policies. I don't really consider those legal beagle efforts to be material changes to what we do in the US with respect to securing REE supply.
Meanwhile, the Japanese are buying – or trying to buy – offtake contracts from future producers and tying up exploration plays in Canada through JVs and in Vietnam. Japan has been very proactive, whereas, in the US, it looks like we'll just sic the lawyers and politicians on it.
TER: In your newsletter, you wrote that REE mines "will not be built and operate under the usual economic models of profitability or rate of return. The financial reward in this market is the downstream supply chain." To me, it sounds like this sector will be relying on offtake agreements. Once you get those, there'll be some type of long-term fixed prices.
MF: I think that has yet to play out. The market will likely operate on long-term offtake contracts, but these contracts are likely to be graduated for worldwide increases in prices – and for higher operating costs. I don't think it's necessary for them to be long-term fixed prices; they could be floating prices. Security of supply is the key ingredient here. I see offtake contracts as one way to do it – also strategic alliances with consumers of the products and/or consolidation of players within the industry. One company has a deposit. Another needs supply of the separated, or even the concentrated, oxides. Then you have another one down the line that makes magnets. Finally you have end-users, such as hybrid carmakers, wind turbine generators, and the fluorescent light industry. There are endless possibilities in terms of how this could work out.
Only a few deposits in the world are likely to be developed, and that depends somewhat on who is the first to develop strategic alliances or sell future products. All of the juniors I mentioned have robust deposits—but these explorers will not become miners without help. They are generally run by geologists and are adding engineering staff, but these projects are much larger than any junior could possibly fund. That's going to mean demand for partners on both the financial end and downstream supply chain.
TER: The companies you mentioned earlier, Rare Element, Avalon and Quest, all seem to be raising money. Do you expect that money to come from a JV partner or the ultimate REE user like a carmaker from Japan?
MF: In the case of Avalon and Quest, the funds have been raised largely through North American-based financial institutions. I don't know where Rare Element's money is going to come from. All I've heard is that it will be raising major money in the near term. At this point, the various entities comprising demand for REE have not been in the public eye. Financial institutions are funding the feasibility studies and prefeasibility studies.
TER: I'm intrigued that the ultimate users are not coming up with the financing. When would you see the offtake contracts coming into play?
MF: I expect them to come into play soon. Companies need to get to the prefeasibility stage where financial analysis can be done and capital expenditures and costs of production lead to net present values and internal rates of return that actually have solid studies behind them. We should see this happen within the next year for Quest and Rare Element. Avalon has published a prefeasibility study, but it is marginally economic.
TER: In rare earths, there's an advantage to being the first to produce. There are more than enough REEs around the world to meet demand, and the first to produce will get most of the market share. Do you agree?
MF: There are probably more metals in deposits right now than there is demand. This entire sector is based on future demand outside of China. I very much think that China is tightening exports because it sees internal demand increasing, especially for select HREEs, and won't be able to supply the world as it has for the last 20 or so years. We need a secure supply in the West. That's what's driving the sector right now.
TER: I understand you recently met Gino Roger, CEO of Midland Exploration Inc. (TSX.V:MD) and are now getting up to speed on the Midland story.
MF: It's a very well-run company, a prospect generator in Quebec, with one rare element project of significance that's joint-ventured with Japan Oil, Gas and Metals National Corp. (JOGMEC). Their projects are very early, however.
TER: What else is the company doing?
MF: It also has gold and base metal plays. Its share price has touched about $2.
TER: Anything else you'd like to share with our readers in terms of either uranium or the rare earths?
MF: I'll give you another idea in the rare earth element space, Medallion Resources Ltd. (TSX.V:MDL). It has two projects in Northern Canada—a light rare earth element (LREE) project in Manitoba and an HREE project in Eastern Labrador. Its share price has tripled since the last financing. There is some risk but it's still a penny stock, so it might be something speculators want to take a look at.
TER: How far along are Medallion's projects?
MF: Very early stage. The project in Manitoba has a few drill holes. It is a JV with Rare Element Resources. Medallion CEO Bill Bird was the chief executive of Rare Element when that drilling was done around 2006. Its play in Eastern Labrador in the Red Wine complex is at the drill-targeting stage with geophysics, prospecting and sampling being done. And it has a low market capitalization right now, which the more advanced companies in this space do not have."
Interesting interview: Mickey Fulp Talks Energy & Rare Earths
http://www.resourceinvestor.com/News/2010/10/Pages/Mickey-Fulp-Talks-Energy--Rare-Earths.aspx?channel=7
Snippet on REEs ...
"TER: You are also heavily involved in the rare earth element (REE) sector. What's your take on the sector at this point in time?
MF: It is the hottest commodity space around just like the Yukon is the hottest area play. Valuations have gone through the roof over the last couple of months. With a speculative play like this, it's necessary to separate the few contenders from the many pretenders early on. I think I've done that. The stocks have been on quite a run since early July, and the companies that I'm invested in average returns of about 300%. This entire sector is an overvalued speculation right now.
TER: Some might point to China's export restrictions, but that was last year. What's causing the sudden move in the sector this summer?
MF: China further restricted export quotas this summer. The country announced that it was going to crack down on the black market in south China, which is estimated to supply from 20%–33% of the market. This morning I heard an estimate that two-thirds of the supply of heavy rare earths (HREEs) is coming from the black market. China is trying to nationalize its heavy rare earth element sector and force the small and illegal miners to become parts of larger companies.
There is also increased awareness about the sector in the US. I think the US retail investor is driving this market. A final catalyst – and perhaps the biggest – was Molycorp Inc.'s (NYSE:MCP) initial public offering (IPO) on the New York Stock Exchange at a little less than $14/share. It was not well received and went down to $12. During the past six weeks, however, the stock has reached a high of $30.
TER: For investors who aren't already in rare earths, is it too late to get into the game?
MF: I don't think they're too late, but they have to be very selective. Let me give you some examples. In early July, you could've bought Rare Element Resources Ltd. (TSX.V:RES; NYSE.A:REE), Quest Rare Minerals Ltd. (TSX.V:QRM) and Avalon Rare Metals Inc. (TSX:AVL; OTCQX:AVARF) on weakness for less than $2. Quest went to something like $5.50 before it pulled back to about $4.50, and Avalon went above $4. Rare Element has been the real star—that stock touched $9.90. Buying stocks on weakness in a bull market is a strategy that will work.
There is a lot of risk involved in buying these stocks; however, Avalon just raised $30 million for its feasibility study. Quest is in the middle of raising $50 million, which will take it through feasibility and provide working capital.
Rare Element Resources also is looking at a major equity financing in the near term, something in the range of Quest and Avalon. These companies have gone to the next level. Probably my favorite in the sector right now is Scandinavian explorer Tasman Metals Ltd. (TSX.V:TSM; Fkft:T61; OTCPK:TASXF). It was a $0.51 stock and has gone as high as $2. It's pulled back now to around $1.90; I think there's upside with Tasman Metals.
TER: You mentioned risk in buying these stocks. Yet all of them seem to be going up and with some type of financing. The sector is really hot so companies probably get the capital easily. Where does the risk come in?
MF: There's extreme risk in this sector because it is highly dependent on the economic health of the world. We saw that with the "flash crash" and the Greek crisis in late May – late June. These better rare earth element explorers took major hits to their market capitalization. If we don't have a robust world economy, these stocks will suffer.
TER: One of the arguments I've heard is that rare earth metals are becoming a strategic metal for governments and military uses, so there's some impetus for the US to ensure it can produce its own rare earths. Are you discounting that argument?
MF: That's part of the equation in the US for sure, but less so outside of our country because US defense operations are so much larger than any other country in the world. What portion of HREE demand goes to the military? I have no idea.
Here's what I see—in the US, the United Steelworkers Union is asking the government to file a complaint with the World Trade Organization (WTO) about China's export restrictions and there are ongoing congressional hearings, as well as the House passage of a bill that sets up studies and committees to institute national policies. I don't really consider those legal beagle efforts to be material changes to what we do in the US with respect to securing REE supply.
Meanwhile, the Japanese are buying – or trying to buy – offtake contracts from future producers and tying up exploration plays in Canada through JVs and in Vietnam. Japan has been very proactive, whereas, in the US, it looks like we'll just sic the lawyers and politicians on it.
TER: In your newsletter, you wrote that REE mines "will not be built and operate under the usual economic models of profitability or rate of return. The financial reward in this market is the downstream supply chain." To me, it sounds like this sector will be relying on offtake agreements. Once you get those, there'll be some type of long-term fixed prices.
MF: I think that has yet to play out. The market will likely operate on long-term offtake contracts, but these contracts are likely to be graduated for worldwide increases in prices – and for higher operating costs. I don't think it's necessary for them to be long-term fixed prices; they could be floating prices. Security of supply is the key ingredient here. I see offtake contracts as one way to do it – also strategic alliances with consumers of the products and/or consolidation of players within the industry. One company has a deposit. Another needs supply of the separated, or even the concentrated, oxides. Then you have another one down the line that makes magnets. Finally you have end-users, such as hybrid carmakers, wind turbine generators, and the fluorescent light industry. There are endless possibilities in terms of how this could work out.
Only a few deposits in the world are likely to be developed, and that depends somewhat on who is the first to develop strategic alliances or sell future products. All of the juniors I mentioned have robust deposits—but these explorers will not become miners without help. They are generally run by geologists and are adding engineering staff, but these projects are much larger than any junior could possibly fund. That's going to mean demand for partners on both the financial end and downstream supply chain.
TER: The companies you mentioned earlier, Rare Element, Avalon and Quest, all seem to be raising money. Do you expect that money to come from a JV partner or the ultimate REE user like a carmaker from Japan?
MF: In the case of Avalon and Quest, the funds have been raised largely through North American-based financial institutions. I don't know where Rare Element's money is going to come from. All I've heard is that it will be raising major money in the near term. At this point, the various entities comprising demand for REE have not been in the public eye. Financial institutions are funding the feasibility studies and prefeasibility studies.
TER: I'm intrigued that the ultimate users are not coming up with the financing. When would you see the offtake contracts coming into play?
MF: I expect them to come into play soon. Companies need to get to the prefeasibility stage where financial analysis can be done and capital expenditures and costs of production lead to net present values and internal rates of return that actually have solid studies behind them. We should see this happen within the next year for Quest and Rare Element. Avalon has published a prefeasibility study, but it is marginally economic.
TER: In rare earths, there's an advantage to being the first to produce. There are more than enough REEs around the world to meet demand, and the first to produce will get most of the market share. Do you agree?
MF: There are probably more metals in deposits right now than there is demand. This entire sector is based on future demand outside of China. I very much think that China is tightening exports because it sees internal demand increasing, especially for select HREEs, and won't be able to supply the world as it has for the last 20 or so years. We need a secure supply in the West. That's what's driving the sector right now.
TER: I understand you recently met Gino Roger, CEO of Midland Exploration Inc. (TSX.V:MD) and are now getting up to speed on the Midland story.
MF: It's a very well-run company, a prospect generator in Quebec, with one rare element project of significance that's joint-ventured with Japan Oil, Gas and Metals National Corp. (JOGMEC). Their projects are very early, however.
TER: What else is the company doing?
MF: It also has gold and base metal plays. Its share price has touched about $2.
TER: Anything else you'd like to share with our readers in terms of either uranium or the rare earths?
MF: I'll give you another idea in the rare earth element space, Medallion Resources Ltd. (TSX.V:MDL). It has two projects in Northern Canada—a light rare earth element (LREE) project in Manitoba and an HREE project in Eastern Labrador. Its share price has tripled since the last financing. There is some risk but it's still a penny stock, so it might be something speculators want to take a look at.
TER: How far along are Medallion's projects?
MF: Very early stage. The project in Manitoba has a few drill holes. It is a JV with Rare Element Resources. Medallion CEO Bill Bird was the chief executive of Rare Element when that drilling was done around 2006. Its play in Eastern Labrador in the Red Wine complex is at the drill-targeting stage with geophysics, prospecting and sampling being done. And it has a low market capitalization right now, which the more advanced companies in this space do not have."
Nice to have a little good luck on occasion. At the open I was having sellers remorse, but that quickly turned based on the news of the day. I'm a little torn on MCP as well. If things settle and sentiment turns positive again, I'll probably be looking to re-enter along with a few of the others. MLLOF has been my biggest winner lately, and I definitely plan to re-enter at some point. Happy trading as well.
Chad
Rare Earth & Strategic Metals ETF Slips in Debut
http://www.resourceinvestor.com/News/2010/10/Pages/Rare-Earth--Strategic-Metals-ETF-Slips-in-Debut.aspx?channel=7
Interesting snippet ..
"The launch was reminiscent of the last major initial public offering in the rare earths sector when Molycorp Inc. saw its share fall 8.2% to $12.85 in its first day of trading on the New York Stock Exchange in July. Molycorp has since traded as high as $40.90, a level reached early Thursday. It ended trading for the day down 12.11% to $33.89."
Not to that extent, but more than normal. I traded AVL (AVARF) via an Etrade Global account, and while fees are higher ($20/trade), I didn't have anything like you mention. I'm currently out of AVL and will buy AVARF instead if I choose to get back in. It was too much bother transfering money to a global account, changing to local currency (fee of course), and then paying higher fee for each trade.
I'm sitting in the same boat. I bought a little REMX, but still own 3 REEs, and will look to buy back into MLLOF, REE, and MCP that I bailed on yesterday.
I do as well. Short term may be bumpy, especially if it is coupled with a broader market retracement, but long term should be just fine. I don't see Japan or others looking to rely on China, or to move any propreitary green mfg there. Supplies should be sufficiently low in China that they can't also dump on the market and re-drive non-Chinese mining outfits out of REEs again.
Here's the likely explanation, taken from a post by bbets on the REE board.
"BAOTOU, China — The Chinese government abruptly ended on Thursday its unannounced embargo of exports of crucial strategic minerals to the United States, Europe and Japan, although shipments to Japan still encountered some difficulties, four rare earth industry officials said. "
...
http://www.nytimes.com/2010/10/29/business/energy-environment/29rare.html?_r=2&hp
REMX: Rare earth ETF
Here's the real link to the fact sheet and other information: http://vaneck.com/funds/REMX.aspx
Here's the holdings: