basically I agree with you. IF LYC and MCP will take the path to...

basically I agree with you. IF LYC and MCP will take the path to production smoothly, ARU will have to sacrifice the high returns based on short term supply shortages. They will still have a good chance to become highly profitable with a long mine life in a stable country, being able to guarantee long term supply to the growing market. In any case they do have a long way to go, getting anywhere near LYCs market cap once offtake agreements are on the way. Customers will be aware of the political changes in Malaysia, likely to secure their production instead of gambling that Malaysia will remain as supportive for years to come. So there should be a lot of positive ARU news in the pipeline in the coming month (see Q2-activities report).

As you know, I disagree about the situation LYC is facing. Things are far from going smooth because the missing pre-operational license has become a political issue in Malaysia. You say "2 years ARU are behind could blow out to 3-4 yrs". That might just be as possible as the opposite scenario: LYCs first mover advantage shrinking to 0-1 years in case LYCs pre opp-license has to wait until after the next general elections in Malaysia.

With LYC Mcap being valued 13 times higher than ARU, this illustrates what can happen if things run in favor for ARU.

ARU now has the chance to deliver offtake agreements, JVs and dynamic progress on the BFS with funding prospects above 1 AUD for the completion of the BFS and way above 1 AUD for the Wyhalla plant (depending upon LYCs progress). If ARU management can take advantage of the high REO price levels, they will be able to come out with less than 1 billion shares when producing.

I will not rely on this though. I doubt and hope not, that they will pull the same funding-"transaction" Curtis performed by providing loads of shares at ridiculous levels way below 0.4 AUD to himself and participating banks with an unneccessary price decline >50% in the second half of 2009.

In any case I will trade all REE stocks optimizing my performance. In Germany we have to pay taxes of 25% on stock profits no matter how long we hold them (since 2009).

regards
Julia