7 February, 2014In analysis published Wednesday, Hallgarten &...

7 February, 2014

In analysis published Wednesday, Hallgarten & Company’s Christopher Ecclestone suggests, “The storm of the last two years has winnowed the wheat from the chaff (largely) in the REE space.”

“The two bulk producers managed to get into production after a titanic struggle and have been rewarded for their perseverance with relatively lowly market caps,” he noted, ... Meanwhile, “Tensions between Japan and China over disputed islands may yet be the touchpaper to set REEs and other specialty metals alight,” he speculated ...

Hallgarten remains bullish “on virtually all the rare earths, except for the ubiquitous Lanthanum and Cerium,” he observed. “These two really spoil the mix and the onset of production from Molycorp and Lynas, which are both biased to these two elements, has made the price appreciation prospects for them look grim and put the lid on any and all projects that are overly weighted towards these ‘mass-market’ metals.”

“The mantra now is ‘small is beautiful,’” he stressed. ‘Those with bloated capex and NOT advanced into production are destined to, as the Bard put it, spend ‘all the voyages of their life bound in shallows and miseries.’”

Alkane Resources has never strayed from promoting its Dubbo Project as a Zirconium mine, with REE and other mineralization (primarily Ferro-Niobium) as icing on the cake, he noted. “This strategy has managed to put it ahead of all the other wannabe producers and over the hurdle into the production space.”

(more)

http://www.miningaustralia.com.au/features/rare-earths-sector-future-looks-brighter