Altona Rare Earths Share Discussion Threads

[targetrighton] 03/2/2011 00:57

The significance of the Letter of Intent with EEC. Comments taken from another Bullboard.

A military person's view on Rare Earth;

"I don't have a hell of a lot to contribute to the finances/business side of things, nor is my trading experience extensive. If there's something I can offer this community though, I've got a pretty strong appreciation for the military significance of these strategic materials. I'm in the forces, have served overseas, and am pretty up to speed on the critical role technology plays in the modern military context. I'll focus for the most part on the Americans, since they're the real big player in this outside of China.

America's global dominance is entirely predicated on its ability to beat the living snot out of any power that challenges it militarily. America's military might is unparalleled. This comes from several origins: Huge funding, massive manpower, an excellent professional training system, and most significantly to this, technological dominance.

From the tactical (idiots like me with boots on the ground and rifles in our hand) to the operational (a regional military commander using a variety of intelligence and communications assets) to the national strategic level (particularly strategic communications and reconnaissance assets), the military is shot through with technology that relies on rare earths. At the very highest levels, American military might is built on information dominance; their ability to detect rivals' movements and intentions through technical means. That might be intercepting communications, it may be photo or radar reconnaissance form satellites or aircraft.

Dominating the information battle space, America's next critical strength is its utterly overwhelming air power. It has the most of the best aircraft. Those aircraft in turn have the best radars, the best communications equipment, and importantly carry the best weapons- the precision missiles and bombs that allow for an unparalleled ability to blow things up with a substantial degree or precision and discrimination. Everything from the lasers that guide bombs, the radar seeker heads in missiles, the the holographic display the pilot looks at have some degree of rare earths use. The radars used to control the air battle have rare earths. The computers that form the complex information systems allowing aircraft to target and engage multiple enemy at once have some rare earths.

The strategic naval dominance is laced with technology- again, precision weapons, sensitive sonars and radars, complex, modern ditgitized information displays. Again, rare earths.

On the ground we have technology integrating them. The holographic sight I mount on my rifle has some small amount of rare earths. Our armoured vehicles have laser rangefinders and aiming systems, complex electronics, and use navigational and communication systems that, again, use rare earths.

America's biggest geo-strategic rival is China. I hardly need point out where the significance of all this comes in. These materials are essential to the supply chains that provide the technological dominance that America needs to maintain its current spot in the world order. Without sufficient supplies it cannot built the things that turn an armoured hull with tracks, an engine, and a gun into a fighting vehicle that's integrated with the modern, technologized combat information systems. It can't put armaments on the aircraft. It can't build new sonars for new ships.

Even with no likely threat from China, simply the fact that this vulnerability exists is plainly beginning to give the U.S. defense sector pause. It is unacceptable, from a strategic risk standpoint, to not establish a domestic/friendly supply of these materials. This is not to say that in a matter of months America's military could be rendered ineffective by starving it of rare earths; far from it. However any future production will need more and more of the stuff, and the military is getting more technological, not less.

GWMG, as an integrated company that stands to come into fully integrated production in the next few years is very, very well poised to lock in some serious interest in what it sells. I like what I see. From a purely demand side, the long term need for what they produce is there.

GWMG had a bit of a thing on this on their site. It's frankly pretty simplistic and amateurish, but it gives an idea of some of the systems I'm talking about.

[nathaniel1913] 02/2/2011 23:59

I think that gwg is now being recognised as one of the premier plays in the sector. JACK LIFTON a world expert on the sector has highlighted the potential and also holds stock in the company.

[nathaniel1913] 02/2/2011 23:59

I think that gwg is now being recognised as one of the premier plays in the sector. JACK LIFTON a world expert on the sector has highlighted the potential and also holds stock in the company.

[nathaniel1913] 02/2/2011 23:55

sent you an e mail TARGET.

[keya5000] 02/2/2011 21:25

Anybody any ideas what was driving GWG today, up nearly 20%.

[targetrighton] 02/2/2011 20:04

Nathaniel1913, sent me an email at [e-mail] and I will give you an indication of my long range projection which is in XL format.

[nathaniel1913] 02/2/2011 19:30

GWG is now being recognised i feel as a genuine contender for first mover advantage in the sector. Market cap is still very low considering and comparing others in the sector with nowhere near the potential..imho of course. TT. whats your view on this over the next year or so. And by the way. A big thankyou to yourself and Wendy D for magnificent posts..

[targetrighton] 02/2/2011 19:24

Found what I was looking for
"Mount Weld is a far more complicated deposit with more complicated mineralogy than Mountain Pass. Lynas is still working out its metallurgical problems, which is why I think it may have taken so long to get into production. The company has been speaking about production for the last five years but has never quite pulled it off. I think this is due to the difficult mineralogy and the metallurgy that comes with that mineralogy. It could be another two to three years before it makes progress."

Was in this article, No date

[targetrighton] 02/2/2011 17:51

I read an article where Lynas was encountering some difficulty in their metallurgy and I neglected to copy the article. Has anyone else seen that article or read it. If you have please post the link, I cannot find it.

[jimbowen30] 02/2/2011 13:06

Good post on Lynas taken from hotcopper site -

Firstly apologies for a long post. Don't want to bore you. I agree it was a disappointing day. Shorters then panickers ripped the price apart. I actually bought some more shares at 1.85 yesterday so it was no joy to see the freefall today.

But let's get some perspective.

Nick Curtis sold 5 million shares back in Novemeber around $1.50 - the stock went up 85 cents after that.

Today was different because it is now an ASX 100 company and institutions do not like key men selling big parcels of shares. They certainly gave Nick Curtis that message today. The stock did open strong enough, but the shorters soon stepped in.

There was 76 million shares traded so the stock had no chance once the shorting began. I am aware that 2 big players shorting the stock for 10 million shares closed their shorts at an average of 1.73. Once the shorting and selling started, fear then crept in. I had mates ringing me convinced that the Sojitz deal was off, that the plant was having problems, that the rare earth price was going to fall 50%. Hogwash, the lot of it. But they sold their shares. All of them. 400,000 here. 300,000 there etc etc. They weren't the only ones were they. Sellers remorse not far away i reckon.

While I believe that Nick Curtis and the company could have, and perhaps should have had a covering letter explaining the need to dispose of 7 million shares given that it was likely to spook the market given he had sold 5 million just 2 months ago, the fundamentals for this company have not changed. If a key executive sells shares when there is forthcoming "bad news", he's in major trouble. Nick is an opportunist but far from stupid. He would have very small windows to buy and sell, and may simply have better places to park $13 mill in cash. He would be seeing opportunities every day. Of course we, and the institutions don't ewant to see him sell, but he still holds 15 mill shares and 35 million options so he wouldn't have enjoyed the share price drop.

I can't see any bad news coming. It was only a week ago that the company confirmed that the plant was on track and that the Sojitz deal was progressing very positively. That won't have changed in a week and the CEO COULD NOT sell shares if that situation had changed. I can see the rare earth price retracing at some stage, and have posted that before but that is well and truly reflected in the price.

Fear increases selling, and hence fear more often than not provides a great opportunity to buy. Nick selling 7 million shares gave the shorters a great chance and excuse to make a big quick buck today. But the two big players I know were closing their shorts and rebuying at the close of market today and I notice that the price went up 2 cents in the match.

Facts are:

- rare earth price still flying
- plant on track
- Sojitz deal progressing
- very good quarterly update last week
- investor presentations next week
- still going to be the first company outside of china to produce
- 2 very reputable firms have $2.50 and $2.70 valuations
- rare earth supply still very much on the world agenda

For what's its worth i was buying in the $1.70's today and didn't take that decision likely, but fully expect to get rewarded.

I reiterate a post I made a while ago - the Australian and Japanese governments want Lynas to be successful as they see them as crtitical to future supply outside of China. That has not changed, regardless of the garbage about Toyota miraculously producing alternatives in a split second. Hogwash.

I am an investor and to me, when the stock was $1.90, i said to a number of friends, LYC has 20 cents short term downside versus $1.10 medium term upside. I didn't enjoy seeing today but it was a chance to happen. Nick helped it along, as did the shorters, but don't throw the baby out with the bathwater now.

Good luck. Tough day, but I suspect those who held on or bought today will be very happy in a month or so.

[p3dr036] 02/2/2011 12:40

Wnedy - Yes it's a matter of timing, which I shall probably get wrong!

[p3dr036] 02/2/2011 12:39

TRT - I agree 100% with what you say. But I don't think i am "missing" anything [though ..... on reflection perhaps ...!]

You cite two facts in post 757 which I personally see as negatives and which are the reasons why I have so far held off from investing in GWG.

These are:

1. At present LCM are limited to "currently imported supply from China". This supply I understand is liable to future disruption by China limiting exports of its REEs. This is of concern.

2. GWG is at least 12-18 months away from being able to supply LCM directly with materials sourced from the Steenkampskraal Mine. This is of concern also.
The document signed with was a Letter of Intent which may well be non-binding as most are.

However GWG will remain on my watch list and I expect to invest in about 9-12 months. I fully realise that I may have to pay a higher price then than today. However there are more attractive and immediate targets for me personally.

[wdurham] 02/2/2011 12:27

P3dr036 -

You also need to put it in context. In terms of own-mine production, Steenkampsraal may be many months away, but only Lynas are ahead of Great Western in the time frame. And Lynas have no down-stream processing beyond separation.

[targetrighton] 02/2/2011 01:53

P3, you seem to be missing the fully integrated aspect of GWMG. Where is the big money made. Not in the mining of rare earths, that accounts for only 15% of the full revenues of a fully integrated company. The balance of the 85% comes from the value added products such as the alloys that LCM and GWTI are producing from currently imported supply from China. In the next 2 years GWMG will have their own back door source and will be guaranteed of supply regardless of what the outcome in the market will be in the future, up or down.
Name me a single company outside of China that has those capabilities. Nobody at the moment, many are trying to get there but are experiencing very large Capexing.

[keya5000] 01/2/2011 22:35

P3, perhaps, but more of a hurry than its peers!

[p3dr036] 01/2/2011 17:00

That's getting on for two years then! So GWG isn't going anywhere in a hurry.

[targetrighton] 01/2/2011 16:36

GWMG has facilities in Troy Michigan and Birkenhead UK who have the capacity right now to produce any product that EEC may require. LCM and GWTI currently import Rare Earth supplies from China. All the development of the Steenkampskraal mine will do is eliminate the reliance of supply of Rare Earths from China as GWMG will have their own sourcing by late 2012 early 2013.

[p3dr036] 01/2/2011 13:11

From the GWG website - I was trying [& failing!!] to add a time scale for the likely start of any deliveries under the LOI. All I could find was:
=====
On June 9, 2010 (see News Release), the Company announced that it had engaged SRK Consulting Engineers and Scientists of Johannesburg, South Africa, to undertake Phase 1 of a Feasibility Study on the Steenkampskraal Mine. As part of feasibility work, a number of consultants are now engaged on the project in several different areas with the goal of advancing the project as quickly as possible.
=======

"As quickly as possible.....!" Has anyone on here got an idea of how long that is likely to be???? I suspect years rather than months, otherwise they'd have been more definite surely.

[mirandaj] 31/1/2011 17:18

Good people to supply.

[targetrighton] 31/1/2011 14:50

GWMG SIGNS LETTER OF INTENT

[speedy] 30/1/2011 16:08

TT - you might want to add Alkane to your tables. It seems comparable, at a stretch, to Bokan and to
Kutessay II because of its high Yittrium percentage. YMMV. The latest broker report with some figures
on REE samples, etc is here:

[targetrighton] 30/1/2011 06:17

SOME MORE READING MATERIAL

[targetrighton] 30/1/2011 04:29

Worth a listen

[ih_235725] 29/1/2011 16:25

Much of the data on the tables and charts on pmem.ws has changed and I will be updating the data as prices for the REOs has jumped dramatically and some of the other data has changed.

[wdurham] 29/1/2011 09:24

Bill, I notice you have Forte listed - have you seen the latest sampling results?

Five further samples have now been assayed, taken from widely spread locations over the potential deposit, and produce average figures as follows:


Cerium.........ppm...11408
Lanthanum......ppm....4800
Neodymium......ppm....5822
Praseodymium...ppm....1450
Samarium.......ppm....1009.6
Dysprosium.....ppm.....381.2
Erbium.........ppm.....113.4
Europium.......ppm.....276.8
Gadolinium.....ppm.....546.6
Holmium........ppm......50.78
Lutetium.......ppm.......7.74
Terbium........ppm......77.58
Thulium........ppm......29.5
Ytterbium......ppm......63.9

HREO Total.....%.......0.15....5.77%
LREO total.....%.......2.45...94.23%
TREO...........%.......2.6...100.00%

The set of revised sample assays from which I took the above averages can be seen in this news release:


There is not as yet a resource, although they are about to embark upon a complete re-assay of existing drilling for REOs, and hope to have a JORC compliant resource by the end of H1.