View Full Version : Peak Rare Earths is Upon Us.

16th September 2010, 10:34 AM
Submitted by madhedgefundtrader on 09/16/2010 10:23 -0500

AustraliaSmart Money

When I first recommended the rare earths miners four months ago, I thought of them as stocks that you put on the back book and forget about, hoping that they would appreciate someday (click here for “Rare Earths are About to Become a Lot More Rare” , and click here for “China Puts the Squeeze on Rare Ears” ).

Last night I reviewed my positions in this space, and I was stunned by their performance, having exploded into my best trades of the year. Canadian Avalon Rare Metals (AVARF) is up 114% since then, Australia’s Lynas Corp. (LYSCF) has rocketed 282%, and Great Western Minerals Group (GWMGF) has gone ballistic, with a 191% rise. The new IPO for Molycorp (MCP), which I have been touting since well before its launch, has raced up 68% from its July launch price of $14.

Readers who had the guts to buy the out of the money calls are deluging me with emails reporting gains of several hundred percent (click here for my new testimonials page at http://www.madhedgefundtrader.com/testimonials ). I have to tell you that the two year renewals for my newsletter are coming in hot and heavy.

The smart money is pouring into companies with greater production of the more valuable heavy rare earths, like dysprosium, Dy, terbium, Tb, and europium, Eu. The Chinese, which control 97% of world production, dominate in the lighter end of the spectrum, such as in cerium, Ce, lanthanum, La, and neodymium, Nd. This is why Great Western has secured the rights to South Africa’s Steenkampslraal Mine, and Avalon is attempting to raise $844 million to develop the Nechalacho Mine in the far north of Canada, which is also rich in the heavies (click here for the link).

Some traders may blanche at the meteoric moves that have already occurred in this sector. In three years the most common rare earth, cerium, has soared 930% to $35/kg. But this is still a tiny industry, and it is early days. What price is your teenage daughter willing to pay for enough rare earths to keep an endless supply of cell phones coming? The potential answers boggle the mind.

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.

link to ZH (http://www.zerohedge.com/article/peak-rare-earths-upon-us?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedg e+-+on+a+long+enough+timeline%2C+the+survival+rate+fo r+everyone+drops+to+zero%29)

16th September 2010, 11:05 AM
As critical as they are for todays society it was kind of funny you posted this today on the history channel
in the series The Universe rare-earths was brought up!
And it was mentioned that country's could go to war because they are so critical to todays
lifestyle and how important they are today. Not just one of the minerals but all of them.

It does make one think!

16th September 2010, 11:28 AM
Which one(s) would you buy? I'm very motivated by this info!

16th September 2010, 11:34 AM
Which one(s) would you buy? I'm very motivated by this info!

Doc, Have not looked into this deeply also my resources are limited but the ones used in magnetics and
electronics would be a very good place to start.