Sunday, February 6, 2011

Uranium Special Report

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Uranium Special Report

The emergence of global warming and peak oil has forced us in the last 10 years to start looking for other viable forms of energy. On a conscientious level, and an economic level, the world is now search for sustainable green forms of energy that will power our planet for centuries to come. One of the alternatives for a green future is nuclear and so far is the most logical alternative for the longterm sustainability of our planet. Nuclear energy has been a dirty word since disasters at 3 Mile Island and Chernobyl, but since then technological advances a have made nuclear one of the safest and greenest forms of energy production.

The world is going nuclear and demand is now outstripping supply and will do so for years to come as producers desperately try to ramp up production to meet demand. A place of supply that is now drying up that has been available to American nuclear rectors is the HEU program which expires at the end of 2013 and will not be renewed. The HEU program was part of the non proliferation treaty that converted Russian bomb grade material HEU into LEU which is used in nuclear reactors to generate electricity. This program over its 20 year total life will have produced enough LEU to power America’s energy needs for 2 years or 10% of America’s energy needs for the past 20 years. The American nuclear energy industry is now looking for another supply of uranium.

What better place to go looking, but in your own backyard!

The USA is about to reinvent itself as a country and its industries all the way along the value chain from the supply of raw materials to manufacturing and tech. One of the things they are doing is developing their own supply chain of strategic materials such as REE’s and Uranium. Currently the USA only supplies 7% of its own Uranium needs, due mostly to the fact that nuclear generators were dependant on the HEU agreement that supplied virtually all of America’s nuclear energy needs. Since that agreement is almost over and will not be renewed, there is an opportunity to fill this upcoming constraint on supply with an area that has a history of uranium production. Areas like the Powder River Basin in Wyoming have historically produced 100’s of millions of pounds of uranium and basically on standby just waiting to go back into production.

Ex uranium producing deposits in the midwest United States look to benefit from this secondary supply shift the most. These projects in Wyoming, New Mexico and other known uranium producing regions in the states are the most logical choices to fill this supply gap in 2013 and can easily be fast-tracked into production to meet the HEU supply gap in 2013. 3 years is enough time if the mine is being considered for in-situ recovery. In-situ recovery is when they drive 3 mining well down into the resource and blast the permeable rock with a chemical solution that dissolves the U3O8 and pushes it towards the center where it is sucked up through the middle well to surface where the uranium can be processed. This is a lowcost way to produce uranium from the rock with estimated cash cost per once being anywhere form 20 to 40 per / lb of recovered U3O8. The technique requires less capital cost then conventional mining methods and is considered by some more of an environmentally friendly way to mine uranium in the region.

When looking at resources that may be fast-tracked to production to meet upcoming nuclear energy demands, In-Situ Recovery (ISR) Uranium mining is a low cost method with both lower capital requirements and resulting lower operating costs with a much shorter time frame for mine construction including the added benefit of low environmental impact.

Permeable uranium deposits amenable to this method of mining are much more favorable for profitable mining than a conventional mine, especially in Wyoming in the USA where ISR accounts for all of Wyoming uranium production. ISR methods accounted for 36% of global uranium production in 2009.

Demand for uranium is set to rise materially as new reactors start to come online

Not only do we have a dwindling secondary supply which is going to trouble US end users more than anyone else in the world, but demand is set to rise at a steady pace fro the foreseeable future as 58 reactors are in the construction process, 148 are planned and another 331 reactors are proposed.

Currently there are 441 reactors in this world consuming 184M lbs of uranium. It takes 3 – 7 years to complete a reactor in the construction process, so if 58 reactors are in construction, I would expect close to 24M pounds of addition demand over the next 7 years. The 24M pounds of uranium of additional demand are over and above the dwindling secondary supplies most of which is from the HEU program which is over in 2013. 24M pounds of uranium demand is assumed that new reactors assume a constant demand for uranium which is similar to existing reactors. This equates to 10 – 20 new potential new projects producing 1 to 2 million pounds per year to meet up with demand for these new reactors that are in the construction process.

There are another 148 additional planned reactors which will take an average of 10 – 20 years to come online which represents another 62M lbs of potential uranium demand by 2020 - 30. There are still another 331 proposed reactors which represents an additional demand 15 -35 years out of 138M pounds.

By 2025, demand may have increased for uranium by 47 percent, which represents a significant opportunity for the world’s uranium producers and explorers to bring new projects online and could be the equivalent of 10 new uranium companies all producing 10M pounds/year. There is opportunity for players at every stage of this game to capitalize on this upcoming short term and and longer term opportunities, whether it be the Wyoming ISR deposits just waiting for the key to turn or another couple of Athabasca producers to fill the void. Demand for uranium is set to continue to rise substantially over the long term and unless the world finds another, greener more viable form of energy, nuclear energy will be a form of energy for the future going well into the next century.

Uranium Spot Price to hit $80 in 2011!!!

At $40… most operations are not profitable or just at the point of break even. The cost to operate a mine may be less than $40 but once you include all the expenses of running a mining company. $40 is the bare minimum even for the cheap ISR mines in Wyoming.

All fundamentals support U3O8 going higher. Not only is uranium in short demeand, but no new supply will come on the market at less than $60 because of the cost to produce which is good for the long term prices of uranium. Between $40 and $60 spot prices, it is just not worth it in most cases to make the decision to mine. Uranium is also one of few commodities that is unique, it has little or no demand destruction!!! Uranium is a small cost of the production in nuclear electricity; a considerably higher spot price will not affect demand. Spot prices could double and have no effect on the cost of electricity generation by nuclear means.

My first target for next year is $75 - $80 with all fundamentals supporting a continued price rise well in excess of $100 by 2013. The spot price for a commodity that may one day drive the world’s electricity consumption is extremely undervalued given all the variables going forward at $60.

U3O8 Spot price set to breakout this winter and beyond…

Uranium prices have been so depressed for the last 3 years since the collapse of the spot price of well over $100… it is likened to a big heavy train that had to stop suddenly and now is just getting started. This heavy train took a while to get moving again, but once we got some momentum back in the train, it is going to be hard to stop. One thing that analysts always forget about is the speculators and just like any other commodity, speculators will have fun with U3O8. Uranium spot price has technically broken out on the charts and if you treat the spot and long term prices like moving averages we are entering into a bullish crossover period and current spot prices could move this winter another 30% between $75 and $80 dollars. Currently the spot price is $60.50 and the long term price is $62 which is the highest prices since December ‘08. Long term prices should start to move up with the spot as uranium prices move higher which is now a clearly definable trend that is just starting to move. Quantitative easing will affect U prices as well, but the real fundamental that will drive this market is a true demand supply crunch like REE’s, Uranium is on a verge of another longer, more powerful bull market than the previous. I expect old spot price high records to be broken on this run.

U-Stocks still undervalued

Uranium stocks are still undervalued when compared to the $60 spot price 4 years ago with a much more serious supply crunch approaching as secondary supply dwindles while at the same time demand continues to escalate. Psychologically, all these stocks have a long way to run this winter if the spot can at least maintain the $60 - $70 level and I have a suspicion the spot price will run well above $70 next year. Even though some of the U stocks have been through some dilution and share structure is different, a lot of the options and warrants set at the time are still not close to being in the money on these companies at current prices. Psychologically when you look at the long term chart, all these stocks are still cheap and will run hard at least to the end of the winter.

In 2005 and most of 2006 when the U spot was still trying to break $50 a stock like Denison was a $5 stock, it hit $15 highs in 2007 when uranium was peaking, but at $3.30 is currently very undervalued, especially when looking at prospects going forward including the Wheeler River Discovery. Mega is still a fraction of its price with only twice the shares and a bunch of high priced warrants that if exercised will put MEGA into a very nice cash position going forward and also indicating that it is still very undervalued, especially with progression of their projects, their financial position and recent discovery that has the potential to be a 40 – 80M pound high grade resource.

Top Picks!!!

DenisonMines DML

SP… $3.30
Shares out… 339.7M
Market Cap… $1.12 billion

Denison Mines is a uranium stock of the future with a current 1.6M lb production profile and targets to increase that production to 10M lbs by 2020. Denison has an international presence in Mongolia, Zambia, and Canada, but has the majority of their projects in the USA and looks to be a major beneficiary from the end of the HEU program. They have their costs under control with 3 mines in production at an average cost of $38.22 /lb and are now positioned to make positive returns from USA operations.

They also have the exciting new World Class Discovery at Wheeler River in the Athabasca Basin which his planned to be a major producer by 2020. Wheeler River has produced some nice intercepts including…

  • 5.5m @ 11.82%
  • 4.5m @ 17.72%
  • 3.5m @ 19.96%
  • 6m @ 62.61%
  • 9m @ 16.8%

Denison Mines is debt free and well financed with $78M working capital and a quality international project pipeline such as the 20M lb Mutanga/Dibwe in Zambia, the 18M lb Gurvain Saihan project in Mongolia and the World Class Wheeler River Discovery. Denison has set the stage to become a premiere international uranium producer over the next decade and is currently a company that will profit from a rise in short term prices with production of 1.6M lbs of U3O8. Denison has inventories of 89M lbs of uranium including 14.5M lbs of historical resources.

Because of the HEU agreement coming to an end, US uranium companies have a competitive edge over their international counterparts to supply the upcoming supply void in 2013. Companies that have sizable high grade projects in the west that are amenable to ISR style mining will be given serious consideration for fast-tracked production. Add to the fact the US is trying to rebuild its own internal supply chain from raw goods and up. American u companies have a leg up to fast-track production.

Mega Uranium MGA

SP… $1.05
Shares Out… 246M
Market Cap… $258 million

Great economics for Australia…

Mega Uranium is positioned to be a premiere Australian producer over the next decade with quality projects in Australia. With near term production going forward from Maitland Lake of 1.6M lbs and the recent discovery near Cameco’s 79M lb Kintyre deposit, fundamentals bode well for Mega’s short term success and continued material revaluation.

Mega’s other ace in the hole in Australia is Ben Lammond which has an N43-101 compliant resource of almost 11 million pounds in all categories grading between .27 and .21%. Ben Lammond also grades .15% Molybdenum making it on of the highest value per ton uranium resources outside of the Athabasca Basin. The deposit has huge upside potential being open to the east for at least a 1km strike. Mega has commenced a prefeasibility study on this property.

Huge Exploration Upside in Cameroon and Canada

MGA also have prime exploration targets in Canada and Cameroon where in Cameroon Mega has successfully drilled economical widths of uranium mineralization. Mega also has interests all over Canada including a jv with Forum Uranium FDC in the northwest region of the Athabasca Basin as well as the highly prospective IOCG target in the Yukon.

Results from the highly prospective Igor property in the Yukon which extends on strike for 600 meters of which MEGA can earn up to a 75% interest in the project…

  • 64.7m of 1.18% cu, 0.09% U3O8, and 2.25 g/t ag
  • 6.9 m of 2.31% cu, 0.152% U3O8 and .05 g.t au
  • 7 m of 7.37% cu, 0.417% U3O8 and .33 g/t au
  • 4.4 m of 7.24%cu, 0.132% U3O8, .21 g/t au and 6.79 g/t ag

Mega also has interests in the Central Mineral Belt in Labrador that are considered highly prospective, but a uranium moratorium has put a damper on the whole area with no end in sight.

Hathor Exploration HAT

SP… $3.12
Shares out… 107M
Market Cap… $333 million

Covered @ $1.90 +$1.22 / 64%

Hathor is my top pick for discovery in the Athabasca Basin, I have followed and posted about HAT for years. Last month Hathor released the best hole to date on the Roughrider East Project of 63.5m grading 7.75% U3O8. Hathor’s Midwest Northeast Project represents one of the best discoveries in the basin in 20 years.

Hathor’s Midwest Project has an initial resource of 6.5M lbs indicated and 5.5M lbs inferred. This initial resource base is just a starting point to what is going to end up being a very significant deposit in the Athabasca Basin. Unlike a lot of the uranium deposits in the Basin, Hathor’s deposit is shallow making initial economics look quite good. Hathor currently has 4 rigs drilling on the project aggressively expanding the known resource open along strike in both directions.

In addition to the Midwest Project Hathor’s recent jv with Forum Uranium is having early indications of success as Forum has identified new geochemical targets on the Henday Project. The project is along the Midwest Trend which hosts Hathor’s Roughrider deposits as well as Fissions J zone. A 4,500m drill program is scheduled to begin in early January. The summer program had been deferred until the winter because it was determined that the most prospective basement rocks corresponding with a magnetic low is underneath the lake which can only be access by drilling after freeze up.

Hathor is a top stock going forward working on delineating and expanding the Midwest Project which is prospective for multiple high grade uranium deposits and early indications are that they may be on to another nice find at the Henday project.

Taking advantage of HEU in the US midwest…

Strathmore Minerals STM

SP… $1.30
Shares Out… 87.9M
Market Cap… $114 million

Strathmore is definitely the cheapest of the bunch when you compare market cap to reserves. One reason it has a discount is that most of their advanced projects are in New Mexico and their flagship project Roca Honda 60% is an underground mining operation set to produce in 2013-14. Midwest uranium companies with quality ISR projects will command a premium at market. They have other projects in New Mexico that may be amenable to ISR mining, but until proven economic and start the permitting process, will not get the same value that a Wyoming ISR projects get.

Their Gas Hills project in Wyoming looks to have potential with 17M historical ounces and is amenable to ISR mining, but still has a lot of work to be advanced to production stage. Strathmore is cheap when considering the amount of lbs in the ground they hold and potential that their properties hold; that are all pretty high grade for USA Midwest deposits. If they can prove their New Mexico projects are economic with ISR methods then STM could get a major bump up in valuation.

With 87M lbs in inventory including 17M historical at Gas Hills, Strathmore Minerals is very cheap when valued at only $1.55 per lb of uranium and is a very good value buy with a high quality pipeline of projects in the MidWest US.

UR Energy URE

SP… $1.97
Shares out… 99M
Market Cap… $195

UR Energy is going to be the next producer in Wyoming with their 11M lb Lost Creek Project in the Powder River Basin in Wyoming. They have almost completed the permitting stage to bring its lost creek deposit into production as well as build a 2 million pound per year uranium processing facility. They have even received an exemption for limited construction and have ordered key plant equipment for the mine. These guys are serious about being the next mine in production in the Powder River Basin.

Lost Creek’s conservative PEA indicates close to a million lbs a year with favorable recovery of 80% which is well above industry standards of 70% with operating cash costs of $23.36/lb of U3O8 over a 7 year mine life. Lost Creek will be in production well beyond 7 years with the nearby 14M lb Lost Soldier deposit expected to be the next project permitted as well as initial exploration drilling has indicated another 24 -28M lbs on adjacent properties not including the existing resource. With a 2 million pound mill URE has plans on doubling production but want to get Lost Creek up and running before promising another million ounces. Once Lost Creek is up and running, permitting is much easier and can be made as an extension of Lost Creek. There is also potential for expansion at both the Lost Creek and Lost Soldier Deposits with holes hitting economical grade mineralization outside of the defined resources.

UR Energy is one of the top stocks to benefit from the HEU supply gap. They have one of the best technical teams in North America, are a nearterm low cost producer at $23/lb, in a mining (uranium) friendly jurisdiction in Wyoming and are alrady building the infrastructure with an economical on-site processing plant that will be fed with uranium ore in the area for years to come. With $34.7 million in the bank and rapidly moving through the permitting process being well ahead of other juniors in the area, URE is set to be uranium junior to be reckoned with.

Uranez Energy URZ

SP… $3.90
Shares Out… 64.5M
Market Cap… $252

Uranez is another company focused on near term production potential in the Powder River Basin. Uranez plans 1.5 to 2M pounds production by 2012 on their ISR style deposits in Wyoming. Uranez has the least amount of resources of the American potential junior producers at just 18M ounces between their 5 N43-101 deposits. I expect that many of these deposits are open for expansion. At 2M lb per year production by 2012, Uranez has stated some pretty lofty goals.

Uranez may be a bit overvalued when compared to its peers but factors that may help URZ are the fact they are going big and their share structure is much tighter than the rest.

Titan Uranium TUE

SP… $0.425
Shares out… 106M
Market Cap… $45M

Covered in the premium edition at $0.19 +0.235 / 120.5%

Titan Uranium is another company that is ready to take advantage of HEU unwinding. They are focusing on developing their Wyoming Sheep Mountain project which has proven and probable reserves of 14.2 million pound of uranium. An initial feasibility study based on $60 long term price for uranium gave a 1.5M lb /year production and an 11 year mine life using open pit, underground and heap leach recovery. Cash cost are estimated at $28.67 lb uranium and has an NPV of $101 million at 7% discount rate.

Titan Uranium is also a top pick for Athabasca junior explorers with highly prospective exploration properties in the Athabasca Basin being one of the largest land holders in Athabasca positioned for a grassroots discovery in the underexplored central and western parts of the basin.

Materially Undervalued…

U3O8 Corp UWE

SP… $0.86
Shares out… 77.6M
Market Cap… $67 million

U3O8 Corp is one of the cheapest U stocks on the market with absolute unmatched potential to add N43-101 resources through development of current projects. They are the premiere South American explorer for uranium. Currently they only have 7M lbs indicated inferred on Aricheng which is just one of 3 potentially massive projects, but they recently announced that exploration has led them to believe that they have a resource close to 32M pounds at Aricheng which has excited the market.

UWE has a great project at Berlin in Columbia with a historical resource at the Berlin project in excess of 38M pounds of uranium. The Berlin project has the added benefit of being a multi element project that is rich in uranium, vanadium, moly and yttrium.

The wild card for U3O8 Corp material upside valuation is the Laguna Salada project in Argentina where trenching has identified mineralization over a 28km area. Current work is focused on infill trenching and an initial resource by the end of 2010.

UWE has projects with potential to have over 100M lb of inventory plus other elements such as vanadium, molybdenum and yttrium. As UWE works to advance its projects, U3O8 Corp is considered extremely undervalued in my books with excellent potential for material revaluation. This one is no brainer under $1. UWE also had extreme insider buying on Friday which is often a very big buy signal.

First Uranium FIU

SP… $1.30
Shares Out… 181M
Market Cap… $235 million

First Uranium is my bottom feeder pick and is very cheap concerning the resource at Ezulwini. Ezulwini has a N43-101 resource in both categories of 195.65 lbs of uranium and close to 30M oz’s of gold (most of this is in the inferred category). Ezulwini is working towards peak production by 2019 and now have all the infrastructure in place with a 200,000t per month gold facility and a 100,000t per month uranium facility now fully constructed. Right now they are working out the bugs that come along with restarting operations and Q4 is already showing a dramatic improvement of the mine call factor.

Production is expected to improve in 2011 going forward with a lot of improvements designed to maximize efficiency of operations. At $1.30 it has been hammered down from multi-year and represents a good bottom feeder pick going forward with gold and uranium production. At $1.30 it is a very good speculative buy.

Strateco Resources RSC

SP… $0.91
Shares Out… 122.7M
Market Cap… $112 million

Strateco Resources is very cheap concerning that this may be the next uranium mine outside of the Athabasca Basin. I have followed the Otish Basin stocks and Central Mineral Belt stocks for a long time and Srateco has a quality high grade uranium resource at Matoush with 7.5M lbs of uranium indicated at 0.78% U3O8 and close to 13M lbs of uranium inferred at 0.5% uranium. Currently RSC is valued at $5.50 a lb of U3O8, but the recently confirmed a new uranium lense on the property 1.5 km from the 3 lenses that make up the Matoush deposit. 2 holes 60 meters apart graded 0.48% over 4.2 meters and 0.33% over 5.1 meters.

Strateco Resources has strong public support for the project and with recent news shows that there is plenty of exploration upside potential with this new discovery 1.5km from the Matoush deposit. I have full confidence that RSC will find many more lenses like this to ad to their inventory which will feed operations for years to come.

Strateco Resources is a screaming buy under $1 for what is one of the highest grade uranium deposits outside of the Athabasca Basin.

A cheap explorer that is a good area play off of RSC is Pacific Bay Minerals PBM which has several targets to go after on claims surrounding the Matoush discovery. I would rate Pacific Bay as a very strong buy as well with high quality targets.

Athabasca Explorers

Forum Uranium FDC

SP… $0.285
Shares Out… 114.9M
Market Cap… $32.7 million

Covered in newsletter @ $0.16 +0.125 / 78%

I have mentioned Forum many times in the past as a top pick with both uranium and REE exploration exposure. FDC has high quality targets and jv’s with some very notable names in Mega and Hathor in the Athabasca Basin. The Henday Project is where all the excitement currently lies as they think they may have found a significant basement hosted target similar to HAT’s roughrider discovery. FDC’s Henday Project jv with Hathor is in the Midwest trend of discoveries that play host to Hathor’s Roughrider deposits and Fission’s J zone.

Forum has many quality uranium projects including the Maurice Point jv with Mega, the 100% owned Key Lake Project which they are drilling this winter and their North Thelon project which now has shown REE potential. Further exploration is warranted on this large REE target.

Forum got a huge boost from being mentioned on BNN last week and has some daytraders in it, but is a quality story going forward and a solid buy for the investor under .30 cents.

Fission Energy FIS

SP… $0.85
Shares out… 69.2M
Market Cap… $59 million

Fission is another key explorer in the area with their J zone discovery. Recently they announced they extended the mineralization with another high grade step out of 6 meters grading 4.45% U3O8. This was a15 meter step out of a hole that graded 12 meters at 3.64% U3O8. Fission is another key player in the Hathor’s Midwest Project that is shaping up to be the most exciting discovery in the Athabasca Basin in over 20 years with many juniors making key discoveries as well as others defining high priority exploration targets.

Fisson has many other high quality targets within the Athabasca Basin, but right now all the excitement is about their J zone discovery and with continued expansion of this deposit, Fission is currently undervalued under $1 with expectations for continued success and expansion of the J zone. Fission is right in the middle of all this recent excitement regarding the Midwest Trend and will rise with the rest of the bunch that are participating in this exciting rebirth in the Athabasca Basin.

PurePoint Uranium PTU

SP… $0.215
Shares out… 73.3M
Market Cap… $16 million

Purepoint Uranium is another cheap Athabasca explorer that has potential to make a significant discovery. They are in the right place in the Athabasca Basin and have identified 45 high potential targets in its 11 Athabasca Basin properties. A property of note is Purepoint’s Henday Block which is 9km northwest of Areva’s 41M lb Midwest Lake deposit.

They recently announced that newly defined EM conductors from a VTEM Airborne Survey are on trend with neighbor Fission’s J zone and Hathor’s Roughrider and Roughrider East deposits. The survey identified 7.5km of EM conductors where historic data only identified 2.9 km and the only historic hole on the property was interpreted as having tested a weak to moderate target.

Purepoint’s Henday Block Project is going to attract a lot of attention with the recent discoveries on Hathor’s and Fission’s properties, as well as Forum’s highly prospective Henday property.

Please don’t confuse Forum’s Henday Property with Purepoint’s Henday Block Project. Purepoint is another Athabasca Explorer that has some real discovery potential.

ESO Uranium ESO

SP… $0.13
Shares out… 97M
Market Cap… $12.6 million

Last but not least is ESO. I haven’t covered it in the newsletter but have followed it since .065 and commented on it on facebook at .08 2 weeks ago. Eso uranium has a 2 pronged approach to exploration with gold and uranium projects in throughout North America. Eso has high quality properties in the Athabasca Basin with 50/50 jv’s with both Hathor and Fission. Their properties include Cluff, Patterson Lake, Hook Lake, Cree and Hatchet which cover more than 250,000 acres of prospective Athabasca Basin targets.

Eso is also exploring for gold in BC, intersecting decent results on their Donna project including trench results of 29.66 g/t over 2.5 meters which extends the zone further west along the soils anomaly. Initial drilling to date has identified broad anomalous zones of mineralization with hopefully the discovery hole to come.

Eso is a great penny flyer with quality jv projects in the Athabasca Basin and what is looking to be a potential discovery in BC that may give ESO some momentum from 2 angles going forward.

All these stocks from DML to ESO traded much higher, are undervalued, and will go higher as the whole uranium market continues its rebound into 2011.

The 2 major focus’s for the investor for uranium should be projects in the Midwest US and the Athabasca Basin with a sprinkle of projects in other strategic places. All the stocks mentioned above I consider very good buys in this uranium market going forward.

There are certainly more, but this is a good start.

Company Market Cap M & I millions lbs Infer.millions lbs Hist.millions lbs Totalmillions lbs Price / lb Production Notes
DenisonMines 1.1B 42.5 32 14.5 89 12.60 Current Production 1.6M lbs 2020 target of +10M lbs U3O8
UREnergy 194M 22 2.9 24* 48.9 3.98 2012 Lost Creek 1M lbs (ISR)
First Uranium 235M 6.95 188.7 - 195.65 1.20 Ramp up full production by 2019
Strateco 111M 7.46 12.78 - 20.24 5.52 OtishBasin is likely Canada’s next uranium producing region due to moratorium on CMB
Strathmore Minerals 114M 43.9 26.15 17 87.05 1.55 Roca Honda by 2014(underground) New Mexico projects need to prove ISR
Mega Uranium 258M 37.65 5.38 6 49.03 7.61 1.6M lbs by 2013
U3O8 Corp 67M 5.81 1.32 63** 70 $1 Explorer developing 3 high quality targets in S.A.
Uranez Energy 251M 15.07 3.32 - 18.39 13.68 Commercial production by 2012… +1.5 -2M lbs (ISR)

*not historical but conceptual
**U3O8 Corp recently stated an additional 25M conceptual pounds at Aricheng

Christopher Skidmore

Reporter for Beat the Market Stock Picks

Why the World Needs Rare Earth Elements

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Why the World Needs Rare Earth Elements

The world needs REEs for a GREEN FUTURE

Rare Earth Elements are one of the few commodities that is not in a bubble. It is one of the few commodities where there is a true supply demand crunch and outlook for REEs demand looks very strong going well into the 21st century, long after demand for most commodities has fallen off. Long after the commodities super bull is finished, REE demand will continue to surge. Long after gold has been thrown out in the streets because it’s a waste of space, REEs will be in strong demand. Rare Earth Elements are at the center of advancing our technology into the 21st century and keeping our technology one step ahead of everyone else. REEs are also extremely vital in the development of our fledgling green technologies. REEs are vital to everyday life as we know it and for society to progress into the future.

Rare Earth Elements were first discovered in Sweden in the 18th century, but were not commonly used in commercial production well into the 20th century. One of the first rare earth elements used in production from was Europium, which was used to make the red in the television tubes. Since then technology has adopted these elements as their own, being on the cutting edge of technological advances. REEs have been very important in advances in green technology with the development of neodymium super magnets which have brought about the evolution of the hybrid vehicle, the oncoming electric vehicle, and wind turbines. REEs are vital in other advances in green technology like light weight solar panels that power the Solar Taxis being introduced in Brazil.

REE’s are also used in…

  • Compact incandescent lighting
  • Phosphors in flat panel displays (lcds, cell phones, portable dvd players, laptops)
  • Hard drives
  • Fluid cracking catalysts in petroleum refining
  • A variety of medical instruments including MRI machines
  • Many military applications
  • Polishing high quality glass lenses
  • Automotive catalytic converters
  • Rechargeable batteries for hybrids and electric vehicles
  • Rare Earth Permanent Magnets


*Europium and Gadolinium are commonly misclassified as HREE to make the deposit appear to be more attractive

Why REEs are important to our Green Future

Neodymium magnets & nickel metal halide batteries!

Electric cars, Hybrids and Wind Turbines all require these ultra high powered heat resistant super magnets commonly referred to as Rare Earth Permanent Magnets. They are pretty much in any technology you own, including the hard drives in your computers and will be increasingly more important in the future in products that you use. The potential soaring demand for REEs lies in the emergence of another golden age for automakers, which will last a good part of a quarter century. The official start line for this age is 2010. We are running out of fossil fuels and at some point inflation may make it too expensive to drive a gas guzzler. We have already seen demand destruction at over $100 a barrel of oil and 5 years from now the world will dream of the days when oil was well below $100. On top of all these economic arguments, switching to going green is just better for the long term health of our planet; it is good for the global economy and for the continued advancement of technology. China realizes the importance of going green and is pushing electric vehicles for the long term future of the cities that China is building.

Rare Earth Elements have unique electronic properties that cannot be replaced by any other element on the periodic table. It is why they are in everything we have that is electronic today. We would not have electronics without them and they are vital for the technological advancement of our societies. Without REEs, the electric vehicle would be impossible and am a firm believer that future improvements in our technology in the electric vehicle industry are based behind developing our REE technology and being able to readily supply the market when it is time to mass produce these high tech products. We are now at that point in time when the first vehicles start rolling onto the market in 2010 and 2011.

Rare Earth Elements are vital in the advancement of technology

Toyota has stated that improving Prius performance and fuel efficiency has a large part to do with making a bigger Neodymium magnet. Currently a Prius takes between $10 - $15 kg of REE’s, but that could significantly increase over the coming years to produce a more effective and efficient vehicle. Toyota has indicated that developing a larger more powerful magnet would make the Prius more powerful and fuel efficient. If you want better equipped electrified vehicles that are more fuel efficient and compete with the powerful fossil fuel vehicles, making REEs readily available to industry will drive advances in technology forward over the next 20 years. Not just in automobiles, but making REE’s more readily available will allow many industries to continue to drive a wide variety of technology.

A chance at a rebirth for a new Green American Industry

Just recently (2009) scientists have discovered a 1 step process that makes Neodymium magnets without any waste and looks like it may give the USA a chance at developing their own Neodymium magnets that have a bonus of being developed through a green process. The magnet industry is currently controlled by China, but with this new process that eliminates waste and is considered green when compared to the old 2 step process of making Neodymium magnets, it gives the USA a chance at rebirthing an industry further up the value chain and with further declines in the USD over the medium term likely would make this new source of magnets competitive. The discovery of this new way to process REEs also gives potential to process Lanthanum and be used as a Lanthanum Nickel Hydride Battery in electric vehicles that would be a much greener and cheaper option for the industry.

From an article from The Ames Laboratory

“In 2009, Ames Laboratory researchers began work on a greener process for refining neodymium. Instead of two steps, “It is a one-step process going from the neodymium oxide to the neodymium master alloy,” Gschneidner explains, “and since the end-products are completely utilized, there are no waste materials to dispose of.”

A green process with the potential to bring a greater share of the $4.1 billion permanent magnet industry back to U.S. shores represents a major achievement in itself. But the greatest long-term benefit of the Ames Lab process may be yet to come. Gschneidner believes that “A modification of this process should enable us to prepare a lanthanum [element 57 on the periodic table] master alloy to produce lanthanum nickel metal hydride batteries, which are used in hybrid and electrical vehicles.”
A cheaper, greener battery for the world’s growing fleet of hybrid vehicles could eliminate untold tons of CO2, and it’s just the kind of industry needed to help insure America’s economic health for decades to come.”

Demand for Neodymium magnets is expected to increase at a constant rate of 10-16% year over year and gives a chance for new entrants in the market to establish market share. A patented green alternative with no waste will attract a lot of interest and provide an alternative niche market to Chinese magnets, especially from producers that want their products to be seen as green. As the Yuan appreciates with China’s emergence as an economic power in the world, industries like the production of Neodymium magnets become vulnerable to losing market share in international trade.

Neodymium and Lanthanum are metals of the future, especially when considering the potential rapid growth of electric powered vehicles about to hit the market over the next 25 years. One potential choke point in the supply chain of Neodymium magnets aside from Neodymium; is that they usually require the heavy REE Dysprosium, which is in short supply. REE deposits with a high percentage of Dysprosium will be of high interest to the automakers. One such project that has up to 960ppm of Dysprosium is Avalon’s Nechalacho Rare Earth Deposit in NT. Avalon’s high Dysprosium content has attracted a lot of attention to the Nechalacho project. It also is potentially one of the biggest deposits in the world.

Even though the world is in short supply of Heavy REEs, and are worried about securing supply because of the strategic nature of many heavy REE’s in military applications, it’s the LREE’s that have long term economic value. The supply of Terbium and Dysprosium are alarming to automakers, but LREEs are consumed in much more economic quantity than HREEs and is where the long term economic viability of a mine will lie.

It’s the light REE’s where the long term future is. With upcoming demand set to dramatically increase for these types of vehicles as fuel prices rise at a steady pace, consumers will force automakers to increase supply of vehicles that cost them little to no fuel on a daily basis; if governments haven’t by that time already encouraged automakers to do so.

Neodymium and Lanthanum are going to be in demand for a long time.

The Case For the Electric Car...

Ever heard of drive green 2020?

You will be hearing a lot more of it over the next 10 years as governments push their electrified vehicle initiatives on the public. The US government has a huge stake in GM’s success and will succeed in this 25 year plan no matter how much money the fed has to print to make it happen. I am not going to diss Peter Schiff but I am going to diss his comments about the long term outlook for car manufacturers like GM, Ford and Toyota. His comments that automakers are going into round 2 of a crisis over the long run are ludicrous at best and I could not disagree more… Even if his doomsday scenario plays out and we are entering into a period of extreme hyperinflation, oil will dramatically rise in price despite usage dropping off due to a poor economy. If such a situation exists, and the price of gas doubles or triples over the next 3 – 5 years, it will make transportation of all kinds dependant on fossil fuels virtually impossible. Even more so for the average commuter whose wallet is becoming tighter and tighter already. Many dynamic companies are already rolling out electrified fleets of electric and hybrid vehicles to combat expected higher fuel prices in the future. It is already shown that business has adopted and is willing to use this technology. The average retail consumer is not far behind.

If we do enter into a period of hyperinflation over the next 5 – 10 years or however long it is going to take to figure out how to unwind all this debt that has accumulated. America could combat hyperinflation by mass producing electric plugin’s and fuel them by switching our homes and offices to natural gas, which as solely a North American commodity and will be in oversupply for years to come.

If the average consumer’s fuel bill dramatically increases from $100 to $300 per month, consumers will start demanding an affordable alternative. Anyone who owns a car and feels that transportation is a must, will convert just to keep living the way society has told us to live, and part of our life in North America revolves around commuting. It will be much easier to build a fleet of electric cars than move people from the suburbs back into the city.

In the face of rising prices and possible fuel shortages what would you want?

The vehicle that costs you $400 a month for fuel for the rest of your life and maybe increasingly more every year, or the vehicle that costs you virtually nothing to fuel and is only dependent on a commodity that is in oversupply for the next decade?

I am in the camp that over the next 25 years you are going to see the rebirth of the automobile into a fully electric vehicle. There are just too many pressures by green technology and then the ultimate pressure of ultra high fossil fuel prices that will force the masses to convert. If fuel prices double in the next 3 years, people will line up down the street to get an electric vehicle. At a certain price point for fuel, the masses will demand the electric car. Governments that get their populations en masse into electric vehicles will save their populations against possible extreme energy inflation due to peak oil and possible hyperinflation. Extremely high fossil fuel prices may eventually grind global trade to a halt except for the shipment of raw goods.

Peak Oil is Here!

It is commonly agreed that peek oil is not a figment of anyone’s imagination, with the only debate about peak oil being when the world is going to top out in oil production. One model predicts peak oil as early as 2014, although the general consensus is sometime after 2020. Peak Oil should generally be referred to as a time period and not a set date as it should be a period of transition from one form of energy to another. At some point, if hyperinflation doesn’t convince populations to give up their gas guzzlers and to turn to the electric vehicle. Peak Oil will.

Demand For HEV, PHEV, BEV vehicles is set to soar

Which camp are you in?

A Very Conservative Estimate

JD Power estimates that by 2020 all HEV, PHEV, and BEV will account for only 5.2 million of the world’s auto sales or only 7.7% of the total passenger vehicle market. This is a very conservative estimate and is underselling the potential market. If analysts are using this estimate to forecast demand, they may be greatly underestimating future demand. Does any chart for technology look like this? Did the DVD player chart look steady like this? Technology is very predictable with few early adopters, and then more of the main stream, followed by everyone going in a mad rush to get the hot product. You cannot stop herd mentality when it happens. At this point we are still in the early adopter stage of the product life cycle as price point and sales are still indicative of the beginning of the cycle. JD power is grossly underestimating the amount of electrified vehicles that could be manufactured and sold in 2020.

A Drive Green 2020 Estimate

Drive Green is not a matter of if, but when and how fast. It all hinges on variables such as the supply of raw materials to make it happen, an effective price point and potential greater fuel savings. PRTM estimates that at some point there will be an electrification tipping point this decade which will encourage most of us to change over en masse. By 2020 PRTM estimates that 4-5% of adoption rate for EV’s, a 5-6% adoption rate for PHEV’s and a 20% adoption rate for HEV’s which would add up to a third of the global passenger vehicle market by 2020, or well in excess of 20 million vehicles. 4 times more than JD Power’s estimate. If the drive green initiative is planned out at every level and has coordinated government support. It will happen. There may not be 30% saturation in the passenger vehicle market by 2020, but it certainly represents a more realistic number based on analysis of the new product life cycle.

4.2 Annual combined fleet sales by 2015

These estimates do not include the 4.2 million combined electrified vehicles in the fleet market estimated by 2015. This is a more stable estimate because it is easier to predict business behavior, especially when the write-offs are added into the potential fuel savings. Fleet vehicles are also prone to high mileage which adds up to much more fuel savings than the average commuter. Logically, businesses are the early adopters of this technology, but as fuel prices rise, more and more consumers will switch as prices reach the demand destruction point.

One thing for sure is that with such a wide variety of estimates, no on knows exactly how fast consumers will adopt or when. There is consensus that if there is no supply of these vital raw materials, there will be no electrification era with the automobile.

What is stopping the consumer from switching en masse?

Current high prices of HEV, PHEV, and BEVs, keep consumers from switching to electric and hybrid vehicles en masse. Interest for the high technology vehicles is high until the price is revealed. Hybrids generally cost $5k more, PHEV $7.5k more and BEV cost an average of $15k more for a similar vehicle. Consumer interest drops in half for hybrids and plugins and 70% for pure electric vehicles solely based on price.

Electrification of the automobile is going to happen at some point in the next 5 to 15 years depending on a wide variety of variables such as Peak Oil, state of the economy, sufficient supply of raw goods and governments taking initiative to encourage consumers to switch over.

There is also the threat of material inflation of hard assets over the next 10 years that would put added pressure on consumers to adopt at a much earlier pace than previously estimated with the tipping point being demand destruction of gasoline prices.

The China Debate (Scarcity of supply)

China may be cutting off supplies because of strategy and using a monopoly over an industry that no one previously cared about as leverage in a trade war… but simply put… the big picture here… their big picture: Is a vision of an urbanized China that does not include dependence on fossil fuel powered vehicles for transportation. Their vision of China is now including a Green Vision of China which includes tighter regulations of their industries and controlling pollution from the manufacturer all the way to the consumer. As the time approaches where Chinese automakers introduce their own versions of the electric vehicle, it has left China with no other alternative, but to limit supplies of all REEs. China will not have enough REEs to supply her own needs at some point in the future, which may be as early as 2015.

Just look at the supply demand equation. Current demand is 134,000 tons while supply is only 124,000 tons and demand is projected to rise to 180,000 tons by 2012. Demand is expected at over 200,000 tons by 2014 and if continues at the current rate could be as high as 240,000t by 2015. If demand for REE’s continues to increase at a constant rate of 23,000 tons per year for the next 10 years then that is the equivalent of 1 to 2 new mines coming online every year producing between 10,000 to 20,000 tons of REE per annum for the next 10 years to keep up with supply. This does not include demand for REE’s that is expected to dramatically increase after 2020 from mass production of BEV, PHEV and HEV vehicles. Not including all the potential new uses that are just waiting to be discovered.

Demand may start to escalate going into 2020 as mass production of electric vehicles begins in earnest. Growing demand for REEs isn’t solely dependent on the electric vehicles as China intends to go from 12GW windpower to 100GW by 2020. These Wind Turbines will be powering many of the charging stations China plans on installing over the next 5 -10 years. China intends to have more EV charging stations world wide than any other nation. If that is not a big hint of how they are trying to move their population around in the 21st century, then nothing will convince you that the age of the electric vehicle is upon us. China is the one who will lead the charge. They are the most advanced in REE technology so it makes sense that they are choosing the BEV route.

Adding to the increased urgency to develop REE mines and deposits is governments are now considering developing strategic stockpiles of REE’s because of their strategic importance in developing green technologies as well as numerous military applications. Stockpiling may not add pressure to international demand and prices but will put pressure on developing deposits and mines to procure these stockpiles.

If demand for electric vehicles skyrockets before 2020, demand for REE’s could potentially be well in excess of 350,000 tons by 2020 and certainly pushing towards 1M tons by 2030 when electric vehicles are the only alternative. This is a time period when most manufacturers will discontinue the gas powered engine.

There is a supply crunch and an impending demand explosion well into the 2030’s, but currently the market at 134,000t is small when compared to the large markets of copper or iron. So flooding the market could happen at some point but not likely in the near future because there are very few rare earth mines ready for production. Most of these mines will take at least 7 -10 years to come online, which is just in time for the 2020 electric car boom. Chances are we will not be able to keep up with the demand for REE’s until well into the 2020’s and when demand for the electric car takes off, if we don’t have a whole new round of mines waiting to be commissioned to keep up with what may be parabolic like demand going well into 2020 and beyond, there will be another supply crunch. REE prices may remain elevated for years if enough mines are not made available to meet up coming demand.

How much supply will we need by 2020? I don’t want to alarm anyone, but 30 million vehicles requiring an average of 15kg of REE (Prius) will require 450,000t per year just for meeting possible demand of the electrified vehicle. To take an arbitrary number like 15kg per car is not scientific by any means, but could be an indicator of up coming demand for these raw materials. If this number is remotely correct we need to be able to add that much supply on to the market by 2020. Even if new REE mines averaged 20,000t of REE per year, which will be the size of the Mountain Pass operation, that is potential for at least 15 new REE mines outside of China going into 2020 to meet demand in this model.

Electric vehicles have the potential to be a product where demand may have a snowball affect starting at the end of this decade when mass production of electric vehicles begins in earnest. To generate an adequate supply of REEs will take at least 10 years to bring enough REE mines online to make commercialization happen. High fuel prices will certainly force us out of our gas guzzlers by that time.

China has been slowly cutting back on REE supply for years. With dramatically increasing prices for REEs and the recent trade dispute; have left auto manufacturers worldwide scrambling to secure supply of raw materials for their vehicles. The real issue, and has been for awhile, but is now coming to a head on the international stage forcing governments to address this issue… is scarcity of supply. Everyone thought we would have a secure supply of REE from China for years to come, but as REE demand sets the stage to surge over the next 20 years, it has left a huge hole in the supply chain. This issue could really put a damper on the party when automakers are trying to introduce a rebirth of the automobile in the form of electric, hybrid and battery operated vehicles with a chokepoint in supply not being able to access the raw materials needed to mass produce at a cost efficient price.

Some short term solutions…

There are many factors affecting demand for REEs, but currently the biggest potential crimp on demand is the actual supply of the raw material itself. Current projects that are near term are…

  • Australia - Lynas’ Mt. Weld(17,490,000 tons @ 8.1% REO)
  • USA - Moly Copr’s Mountain Pass (20,000,000t @ 8.9%REO)
  • USA - Glencore’s Pea Ridge (12%)
  • South Africa - Frontier Rare Earth’s Zandkopsdrift (43.73Mt @ 2.17% TREO)

These projects are all still 18 – 30 months away from full production and will only meet 60,000 – 80,000t per year and may not meet the extra demand required by 2012 -13. If demand continues at a 23,000 ton pace for the next 10 years, 1 project 20,000t per year mine will need to come online every year over the next 10 years to start meeting what may end up being parabolic demand for REE’s going into 2020 and beyond.

The real question is… what happens to REE demand after 2020 and how do we meet that potential demand?

Demand for Neodymium and Lanthanum set to soar

China is forecasted to demand at least a third of the global market for electric powered/assisted vehicles whose total annual sales could easily exceed 10M total units by 2020. With potential demand for the electrified vehicle market estimated to be anywhere between 10 – 30 million vehicles, that is a lot of potential new demand for raw materials to the market. Advances in technology could dictate that vehicles may require more of the raw material for better technology by 2020. Depending on advances in technology, availability of supply, increasing public pressures for affordable alternatives, that number could greatly increase. If there are chokepoints in supply, it will discourage manufacturers to use the technology as well as not to improve on existing technology that may require more raw materials for better performance and efficiency.

For Rare Earth Elements, securing supply is much more important than any other metal being strategic in nature, with having so many technologically advanced industries being dependent on these metals. If we are slowly becoming a cash poor society in the west when compared to our cash rich Asian counterparts, having our own supply of strategic raw goods is vital to the survival of all our tech industries. Our future technology and competitive edge globally is dependent on these elements. If we don’t have the metals and materials, the scientists cannot experiment with them and certainly can’t develop new applications and techniques for developments in technology. If we don’t provide adequate supply, a manufacturer will never use the material to mass produce revolutionary products.

By 2015, it is estimated by some that China will be a net importer of REEs and if the world does not step up to the plate to fill what will be a huge supply gap looming over the next 10 years, there will be no REEs available for anyone outside of China. We will never have affordable electric vehicles. Considering the strategic nature of these elements in paving the way for our future for so many different aspects of technology, it is vital that we secure these raw materials all the way up the value chain for years to come. Securing an adequate supply will ensure the long lasting health of our tech industries in North America without being dependent on external forces.

Lucrative Economics

Due to dramatic price rises over the past 3 years, especially in LREE spot prices, where the majority of the commercial market lies. The economics of REE mining have materially changed. Current prices are making REE mines look quite lucrative and the economics make mining outside of China much more feasible than ever. Especially since Chinese appetite for REEs will soon consume almost all that they domestically produce and will be trying to secure all the future supply they can get it. Currently prices for REEs continue to rise with Neodymium hitting $100 the week ending Nov. 19th 2010.

In the past year price increases for selected REEs…(In 2007 most LREE were $3-5kg)

Light REEs…

  • Lanthanum $12 - $45/kg
  • Neodymium $12 - $100/kg
  • Cerium $15 - $53/kg
  • Samarian $12 - $53/kg
  • Praseodymium $28 - $87/kg
  • Gadolinium $19 - $56/kg*

*Rocky Mountain REE Belt are known to host Lanthanum, Neodymium, Praseodymium, and Cerium in favorable geology.

Heavy REEs…

  • Terbium…$550 - $790/kg
  • Dysprosium… $150 - $415/kg

A chance for Rare Earth Explorers to fill the void

Neodymium, Dysprosium, and Terbium are in short demand…

Rare Earths may not be rare like their name suggests as they are found abundantly around the world, but they are only found in economic abundance in a few places. The prime exploration target for rare earth mineralization is Carbonatite. Rare Earth deposits are much more complex than a gold or copper deposit (where flow sheets are already made for every type of mineralization and it is about grade and size of the deposit). Rare Earth Deposits depend on a wide range of variables. One of the prime exploration targets for Rare Earth Metals is the newly discovered Rocky Mountain Rare Earth Belt which plays host to some of the largest, higher grade, course grained deposits in the world.

Elements to a REE mine of the future

Being Green

REEs are meant for green technology and should be as green as possible. REEs from monzanite have radioactive thorium of unacceptable levels and are not at this point considered green so this author does not even consider monzanite REE an option. In addition, deposits that have complex metallurgy that take up to 100 different chemical solutions to separate the elements are not green and are costly to operate. REE mines have had environmental problems in the past, the REE mines of the 21st century that succeed over the long run will have as little thorium content as allowed by nature and will have simple metallurgy. The Carbo property for example is 10% of allowable levels which is very low and has very course mineralization which is amenable to simple metallurgy.

The one exception I can see to this rule is a deposit like Elliot Lake that is primarily Uranium with REE as a byproduct, in addition HREE is 50% of the TREO and is the only place in Canada where REE production has occurred and was a historical source of heavy REE in the past.


REE deposits that have simple metallurgy will be the mines of the future as they will be both cost efficient and at the same time as green as a REE mine can get. Metallurgy for REE’s is a complex process that can sometimes take up to 100 different solutions to extract one element from complex mineralogy which is both a costly and environmentally unfriendly process. Metallurgy will make or break a REE deposit, if recoveries are both poor and costly to improve, the deposit will never become a REE mine as it will be less favorable than other deposits. Deposits that have course grained mineralization are usually easy and cost efficient to process. Oxidation may be a problem for processing some REE ore. A REE mine may have high grades but poor recoveries and another may have average grade but great recovery that is cost effective. Until you know the economics of the metallurgy, high grades and a large area are not enough to qualify as a potential mine. REE deposits are mineral specific and deposits that are high in elements that are in high demand or are viewed to be sought after in the future will command a premium at market. REE’s are very market specific and successful REE companies will market their product to specific buyers well in advance of the decision to produce.


In these times when shipping is becoming more expensive and the threat of tariffs is even greater, geographic areas and economic alliances are that much more important. Geographic location is as important as a specific location. Toyota may not want a permanent supply from the tip of Africa. Direct shipping routes from the west coast of North America would make more sense than the tip of Africa. That is why the Rocky Mountain mineral belt may be ideal to supply Japan’s needs for the long term as well as China’s needs when they turn into a net importer.

Canada is one of the best underexplored places in the world to host economical REE deposits. We have a great chance of stepping up to the plate and delivering several short term and long term REE solutions. Adding to the attractiveness to starting a REE mining industry in Canada is the political safe nature of our country and access to 2 major bodies of water. It would be an ideal location to develop a new industry that will have growing demand well into the back half of this century.

Potential REE Mines for the future…

LREE Deposits…

Canadian International Minerals CIN – Carbo Property, BC

Price… $0.73
Market Cap… $32.5 million

  • LREE dominant...Wicheeda Lake / Carbo carbonatite complex is considered 3rd best LREE deposit in North America
  • At the epicenter of the newly discovered Rocky Mountain REE belt
  • Property covers several kilometers of mineralized carbonatite
  • Less than 1 km from Spectrum’s Wicheeda Discovery...72 meters @ 2.92% REE...48 meters @ 3.55% REE

“based on work that I have done in Wicheeda Lake, that mineralogy is amenable to physical concentration and there should be no problems in chemical processing”

- Dr. Anthony Mariano

Commerce Resources CCE – Eldor Lake Property, Quebec

Price… $0.56
Market Cap… $73 million

  • Have an exciting new discovery on Eldor Lake Property, the Ashram zone
  • Near surface wide intervals, open pit potential
  • 1.95% TREO over 243.84 meters
  • 370 meter mineralized interval in lab being tested
  • Dy levels consistently 80 to 160ppm in EC10-028
  • Dysprosium close 50% HREE value of EC10-028
  • 25% interest in Carbo

Hudson Resources HUD - Sarfartoq Carbonatite Complex, Greenland.

Price… $1.24
Market Cap… $75 million

Covers a large area 11km x 9km
Mineralization extends from surface and is open at depth
Very high Neodymium 46% of REE distribution
Located 20km from tide water and close to hydroelectric sites.
Strategically located to supply North America and Europe
Prospect ST40 averaged 3.6% TREO
Prospect ST19 averaged 2.5% TREO

HREE Deposits…

Avalon Resources AVL – Troy Lake, NT – Nechalacho Rare Earth Deposit

Price… $3.27
Market Cap… $259 million

  • Indicated 14.48Mt @ 1.82% TREO
  • Inferred 175.5Mt @ 1.43% TREO
  • Unusually high amounts of Dysprosium with values up to 900ppm

Quest Rare Minerals QRM – Strange Lake B Zone Deposit, Quebec

Price… $4.55
Market Cap… $203 million

  • 115Mt @ 1% TREO – 43% HREO/TREO
  • Pea indicates strong NPV metrics…
  • Open pit 4,000tpd operation
  • 25 year mine life
  • 4 year payback $563.4 CAPEX

Matamec Exploration MAT – Kipawa, Quebec

Price… $0.38
Market Cap… $35 million

  • HREE + Yittrium + Zirconium
  • 40Mt @ 0.28% TREO (36%HREE), 0.1% Yttrium, 1% Zirconium
  • Kipiwa Deposit is the most favorable eudialyte deposit for easy metallurgy