Barry FitzGerald What Garimpeiro knows about information technology solutions is not worth knowing. So he is not going to waste time talking about the on-line back-up and recovery service for emails housed inside ASX minnow Data Motion Asia Pacific.
But its push in to rare earths exploration in Western Australia is another matter. It has got to be worth a shot given that Data Motion?s life as an IT solutions provider has not exactly set the world on fire.
The group?s 3.69 billion ordinary shares have been trading at all of 0.3 cents each. Not 3 cents a share. Three-tenths of 1 cent a share.
Its 1.19 billion May 2013 options (exercisable at 1 cent) are yours for 0.1 cents each and its 2.42 billion March 2013 options (exercisable at 0.5 cents) also command a market price of 0.1 cents each, the lowest quote allowed on the ASX.
Add all that together and you get a company valued by the market at $14.68 million against which it is holding cash of about $1.6 million. There has got to be more to life as an ASX company than that, which is why rare earths exploration has been added to the mix.
In the world of rare earths, ASX-listed Lynas Corporation has set the world on fire. There is huge enthusiasm around the world for its Mount Weld project in WA to help break China?s stranglehold on rare earth supplies.
As Garimpeiro has mentioned previously, China controls the world?s rare earths industry, accounting for as much as 96 per cent of supply. Rare earths are increasingly found in high-end applications, including compact fluorescent light bulbs, flat panel displays, iPads, automotive catalytic converters and rechargeable batteries for electric and hybrid vehicles. They are all areas of boom demand at a time when non-Chinese sources of rare earths are few and far between.
Lynas is now a $4.3 billion company, coming from nowhere in the last couple of years. And its Mount Weld project is all set to go, with a downstream processing facility in Malaysia to follow later in the year, all with the help of some cheap Japanese finance.
In complete contrast, Data Motion is only starting out as a rare earths explorer. Its key property, Mount Barrett, is in the same neck of the woods as Mount Weld. And it shares a similar, albeit deeper seated, gravity/magnetic geophysical signature.
But that?s all. The true test of Mount Barrett?s geology will come when it is tested by the drill bit.
A rig has been booked to do just that. So we will know before long if we should think about Data Motion as an IT solutions provider or a genuine rare earths explorer.
Cheering on Data Motion is Oroya Mining which is another minnow with a last sale price of 0.7 cents a share. Data Motion is earning a 70 per cent interest in Mount Barrett from Oroya, leaving Oroya with a 30 per cent free carried interest during the exploration phase. Oroya also holds 4.5 per cent of Data Motion.
