Rare Earth Elements (REE's) Understanding the value

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Rare Earth elements are more in demand now than at any time in history, and for good reason. China produces almost 95% of ALL rare earth elements used in industry today, and they recently declared that they would no longer ship these valuable commodities out of their country, preferring to use them in their own industries. This places China in the drivers seat in this space, as they literally attempt to corner the market for REE's. However, a number of western countries and companies are now earnestly in the hunt for these highly valued elements.

Whether or not you are an investor in these commodities, or merely interested in learning more about them for investment purposes, you should know that many of the everyday items you use, would not be possible without them. From your computer, your laptop, your cellphone, your catalytic converter in your car, compact discs, low energy light bulbs, your flat screen TV, and the X-ray you got last week, REE's play a vital role in everyday life. 

 Here is a composite of these elements and their uses.

Element	Uses in Modern Technology
Cerium (Ce)	catalytic converters for diesel engines
Praseodymium (Pr)	an alloying agent for aircraft engines
Neodymium (Nd)	a key component of high-efficiency magnets and hard disc drives
Lanthanum (La)	a major ingredient for hybrid car batteries
Samarium (Sm)	lasers and nuclear reactor safety
Promethium (Pm)	portable X-rays and a nuclear battery
Gadolinium (Gd)	shielding for nuclear reactors, compact discs
Dysprosium (Dy)	improves the efficiency of hybrid vehicle motors
Terbium (Tb)	a component in low-energy light bulbs
Erbium (Er)	fiber optics
Europium (Eu)	used in flat screen displays and lasers
Holmium (Ho)	nuclear control rods, ultra-powerful magnets
Thulium (Tm)	lasers, portable X-rays
Ytterbium (Yb)	monitoring equipment for earthquakes
Lutetium (Lu)	oil refining

Junior miners are a big part of the mix of companies looking to increase the west's share of these vital elements and for this article, we have chosen two that are still trading as penny stocks but have properties that show great potential in the mining of these elements as well as Lithium, which is not an REE but is in high demand world wide at this writing.

 

RARE EARTH METALS AND LITHIUM PLAYS

1. A "sleeper" in the space is TNR Gold Corp (TNR-TSX) which is currently flying under the radar of REE investors.  TNR Owns 14 gold, copper, Lithium, and REE properties in Nevada, Canada, Argentina and Ireland. More importantly, TNR "owns 100% of International Lithium Corp" (ILC) which it will spin off next month in an IPO.

owners of TNR stock will automatically own stock and warrants in International Lithium when it is spun out next month. (one share and one warrant for every 4 shares of TNR) Thereby owning "both" companies after the IPO next month. TNR will hold onto it's REE, gold and copper properties as well as one lithium property in Argentina while ILC will owns 17 lithium properties.
TNR projects

Some large Institutional investors in TNR stock include:

Barrick Gold, Pinetree Capital, Tocqueville Fund, Solitario, and NovaGold.

Today's price for TNR-TSX is .20 cents per share.


June 2010- An assessment of TNR Gold Corp by Rick Mills of "Ahead of the Curve"

2. Latin American Minerals Inc. (LAT-TSX)Besides gold, silver, and REE, LAT owns a 17.4% stake in Lithium Americas Corp. (LAC) which has a big stake in the Salars on the Argentina side. LAT also owns rare earth properties (REE's).

Large, institutional Investors in Lithium Americas already include:

• Magna International Inc.
• Mitsubishi Corporation
• PineTree Capital corp.

Today's price for LAT-TSX is .17 cents per share.

Disclaimer - Own TNR and LAT. Acquiring more.

see also: Lithium Miners

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Greece! It has less people than the city of Los Angeles! Now ask yourself, is U.S. cash a trap waiting to be sprung

Image by Steve Rhodes via Flickr

The Euro is suffering because of the initial reluctance of the EU countries to take action regarding the Greek debt crisis. A devaluation of the Euro is overdue, and necessary. It will actually strengthen the Euro's trade deficits over time, and bring prosperity (eventually) But forget Portugal, Ireland, and Spain. In the greater scheme of the international markets, they are small fry.

However, it is the eventual devaluation of the U.S. dollar that should have Americans much more concerned. Beware of what is happening in California, Florida, Illinois, Ohio, Michigan, North Carolina,  New Jersey  and even Texas. These states have all spent over 1 billion on their unemployed alone, bankrupting their unemployment budgets. They also have between 13.7 and 17% unemployment, huge debts and deficits, and in some cases, housing prices have been cut in half.

Like the "Pigs" of Europe, these states also cannot print their own money, thereby inflating their way out of the current malaise. As the PIGS of Europe are having a huge, negative impact on the Euro, these states, (the HUGE federal debt notwithstanding) will have the same affect the U.S. dollar. It is a certainty. The only question is, how long can "king dollar" (as Larry Kudlow likes to call it) remain king. It currently is only king because there are no princes in waiting (as regards other world currencies). So, is "Prince Gold" quietly mounting a coup against the King. How about "King Commodity" who is somewhat weakened right now, but will be gathering strength as 2010 progresses.

Many developing countries, including China, India, Indonesia, Russia, South Korea, Brazil etc. are already looking to gold as a substitute for the prominence of the U.S. currency. Many individual investors and fund managers in these countries and throughout the west, have also moved into gold and commodities as a hedge against the demise of the usd. Some have recently added the Canadian and Aussie dollar to their international currency accounts as these two countries are considered "commodity rich"!

Whether they are right or wrong, sentiment is what moves the market. Anyone who thinks that gold, oil, uranium, titanium, natural gas, copper, diamonds, platinum, palladium, REE's or Lithium are not good places to put your money in this environment, just isn't paying attention. We are taking advantage of the current market disarray and buying these commodities


The U.S. dollar is a bubble waiting to explode into hyper inflation. Cash is a trap waiting to be sprung, and the current downturn is just that, a downturn that was expected and somewhat welcome by smart investors. Being in cash at the beginning of May was smart. Being in cash in June won't be.

 

 

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Cenovus and Suncor stand to profit from huge stake in worlds largest oil deposit.

The recoverable resource base is now 1 Trillion barrels of oil, with two Trillion more in reserves. Yes, that is Trillion!!




The Athabasca oil sands (not the company of the same name) in Canada is far and away, the largest deposit of oil on the planet, dwarfing the 250 Billion barrels of the entire Middle East. This resource alone can power the entire continent of North America, for the next 100 years. So why do Americans believe that the Middle East is their biggest supplier of oil (it is not, Canada is) and why is there a general misconception that the Middle East is where all of the oil is (not!). Even the vaunted New York times still believes Canada is second to the Middle East with 175 billion barrels of oil. Even most Canadians don't realize the enormous resource they are sitting on. It spans across northern Canada in a mass larger than England (The country!)


I guess the answer can be found in the constant barrage of news, both good and bad, that emanates from the middle east on a weekly basis. Conservative, soft spoken, boring old Canada can't compete with all that noise, but it certainly can compete in the energy industry. The largest supply of oil on the planet and that does not even include other reserves such as the Bakkan or what may lie beneath the arctic circle!

With oil companies from every country salivating over what may lay beneath the Arctic circle, Canada, you must remember, owns 25% of the Arctic! Canada also lays claim to over  20% of the worlds water supply (with only .03% of the worlds population),the second largest deposits of natural gas and coal on the planet, More Diamonds, potash, gold, copper, wheat and nickel than any other country as well as great stores of Lithium, Rare Earth elements (REE's) lumber, seafood, gypsum, wheat, cattle, and more!

Canada has paid down deficits for 9 of the past 10 years, has the most stable banking system in the world and a friendly, conservative government that is business friendly. These are only some of the reasons why the Canadian dollar (the Loonie) has had a stellar year, and will for many years to come.
  
  However, I digress, because this article is about the tremendous resource (and investment opportunity) that is the Athabasca oil sands. Stretching through the north of two provinces, Alberta and Saskatchewan, the oil sands are massive. Since the invention of the "steam assisted gravity drainage system (SAGD) the oil sands have been a booming place for investors. Given the massive resource base, that boom has only really scratched the surface (excuse the pun).

The bitumen could cover the entire country of England, and is as deep as 140 feet. Why do companies persist in destroying the gulf of Mexico, and the beaches and marshes of the southern states, when they can literally set up shop on the sands, shovel the bitumen into what is essentially a giant washing machine, and produce enough oil to power our cars, homes, power plants or whatever, for the next 100 years and beyond. Not only that, but you can ship it through pipelines to the U.S. market.

Just promise the friendly Canadian government that you will clean up after you leave, and you have a viable, 100 year energy operation that will make money for you every year. The biggest consumer of the product is right next door, with an insatiable appetite and it now has the political problem of explaining to it's citizens why 1/4 of the American marsh land is in jeopardy of being destroyed for the next 10 years.

Do you even wonder why the Chinese are now buying into this massive resource? (And backing a pipeline to the Pacific coast so they can ship raw bitumen back to China for processing)

It's time for America to wake up, and smell the oil (and the money)!

(Disclosure - No holdings)

Our top pick in this environment is Cenovus oil (CVE). In 2009 Encana split it's oil and gas assets with Encana (ECA) keeping the natural gas component and a new company, Cenovus, keeping the oil assets (with some nat gas). In Q1 2010, Cenovus boosted it's production by 66%  Cenovus has the best technology for processing bitumen in the oil sands and it is getting even better.There is no exposure in the gulf offshore drilling.
Expert high on Suncor - Cenovus - Canadian Oil

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Are you getting dizzy yet?

Is the air getting thinner up here, or am I just having a "Deja vu" moment after a year of Lehman Brothers, Bear Stearns, Merrill Lynch, AIG, bailouts, GM, Chrysler, Fannie, Freddie, the mortgage crisis, gold spikes, Greece, Portugal, Derivative doldrums, dollar demise, Euro borrow, Volcanoes, sub prime, Fab Fabrice, Bernie madoff and who ever else "made off" !!

Should we feel good about the great earnings reports coming in this quarter, or feel nervous because those earnings may be thin air themselves as bailouts and new accounting rules fudge the real numbers? And what was the problem with those big investment banks....hhmmmm, oh yes, now I remember, the 3 $Trillion or so in poisoned mortgage derivatives those banks somehow do not show on their books any more?  Hmmmm.......Now where oh where did those numbers get to.......must have misplaced them I guess.

Actually, since I have done quite well over the past 12 months, I'm feeling pretty good.  Maybe I'll go to the black jack table again and try my luck, or maybe roulette this time.  No, craps, now that's the ticket.......or maybe......well.......if I took my winnings and put it in the bank for awhile........hmmmm   decisions, decisions!

Hey, who are those guys in the boat?>

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