back on the asx - huge ree resoure, page-13

bandalup2

the ggg kvanejfeld tenement is indeed a large rare earth resource. the problem is they can't, and likely won't be able to exploit the REE resource, any more than they can exploit the uranium.

there are several reasons for this

first) the REE's and the uranium are together in mineral. You cannot mine the REE's without digging up uranium, which will not be allowed under the zero tolerance policy. there is no where on the deposit to mine REE's without having the uranium problem. So again it is not exploitable given the zero tolerance policy.

second) even if the uranium were not a problem, if you look carefully you will find that in the ggg pre feasability study, the REE resource has been mis-stated. They talk about 14% heavy REE's in the resource. The correct number is about 4%. They also used a price for the product that is overstated by a factor of about 3 times, the market price.

So there is real question as to whether the project, with only REE's as the product, will be economic. I don't believe it will be, primarily because the ggg md, rod mcilree, recently said that without uranium as a product the project will not be economic.

when the company's md says the project is not economic without uranium as a product, i tend to believe him.

third, as I have said and shown in a chart, before on this website, there is another REE deposit very near to Kvanefjeld called Tanbreez.
Tanbreez is a considerably bigger REE resource the Kvanefjeld and it has no uranium or thorium problems.

again Tanbreez is bigger, and it has no uranium or thorium problems.

kvanejeld doesn't need to worry the chinese, they can't compete with Tanbreez which is only 20k's away.

so in summary,
kvanefjeld is a long way from being able to do anything, i wouldn't get too excited, it is questionable whether it is economic anyway. Even if they were allowed develop the project (which as i have said they cannot), the company has yet to show the ability to do anything other than waste money and fail to meet their own rosy predictions. Also they don't have the money to develop the project and their capital structure is becoming more and more of a mess given their earlier fund raising and due to the fact that they only own 61% of the project.

yes, again, they only own 61%,

So beware of the optimism, it is a much more cloudy picture than you painted and it is a long expensive journey, with stiff competition, before these guys can earn dollar 1. Think in terms of a best case of 5 to 7 years.

cheers