reasons to be bullish ntu

There has been plenty of media coverage over the past week surrounding the Rare Earths Market and the current market prices. The catalyst for this acute focus on the REE sector was the JP Morgan downgrade of Molycorp, citing declining prices in Cerium and Lanthanum as the reason. This downgrade of Molycorp has seen our local REE ASX listed stocks sold down sharply, none more so than Lynas.

So how does this affect NTU?

Lynas sells only Light Rare Earths while Northern Minerals is developing a Heavy Rare Earth project.

Lynas's revenue is derived almost entirely from Cerium and Lanthanum (LREEs), while the majority of value in Northern Minerals project is Dysprosium and Yttrium (HREEs).

It is essential to distinguish between LREEs and HREEs, as they have very different mining, processing and market characteristics.

Dysprosium and Yttrium are forecast to remain in deficit between now and 2015 - which will support prices.

The decline in Lynas & Molycorp stock prices has no negative impact on Northern Minerals and may in fact be price positive for Dysprosium and Yttrium.


DYOR