Have been researching on some of the likely global themes of the year ahead and I came across several sources that point to the likelihood of a supply crunch in Rare Earths (RE's) this year. On our local share market I think there is a some hidden evidence for this by the fact that the US military secured a supply agreement with the larger Rare Earth play Lynas Corporation Ltd (LYC) just a few days ago.
But I am interested in the smaller plays that could present larger % gains if it goes your way. So a couple of stocks has come to my attention that are well advanced in their projects in terms of getting them to production. First is a Rare Earth play that has already been in this portfolio Northern Minerals Ltd (NTU). Second play offers a bit more protection in my opinion as it is already producing cash flow with a Gold mining operation as well as currently Pilot testing it's Rare Earth project. So that was the company that was bought for this portfolio, namely Alkane Resources Limited (ALK).
Alkane's Tomingley Gold operation is already producing cash for the company. It also looks like Alkane has recently hit a big deposit with the drilling carried out recently:
The Dubbo Rare Earth project that is owned by Alkane is currently undergoing Pilot testing:
… and it's economics on a commercial scale are being worked out using the results:
Projects such as this would likely to be in high demand if there is supply disruptions due to US/China trade tensions as China is the world's largest and majority supplier of Rare Earths. Could the US military move be a defensive tactic for US to establish RE supplies outside of China ? Also if the prices rise in Rare Earth elements as a result of demand from ever advancing technology such as Electric Vehicles, the market could start re-rating these type of advanced RE projects.
Open Portfolio:
