us off take?

Picked this up off the Lynas forum, the CUX commentary is the last few paras. The advantages re alluvial deposit might just make CUX a front runner:


Hopes for Lynas

A COUPLE of local analysts will be vindicated by the news that Lynas Corp (LYC) is seeking to raise another $200 million. These analysts had figured on a cash shortfall due to the delays imposed by court cases in Malaysia aimed at preventing rare-earths processing at Lynas's processing plant there.

Lynas leapt another legal hurdle there during the week. But the delays mean the plant will be up and running just as rare-earths prices have weakened.

Dudley Kingsnorth, project manager at the Mt Lynas mine project before it was bought by Lynas and now an adjunct professor establishing rare earths research at Curtin University, reckons the non-China rare-earths market is worth about $1 billion at present.

Overall the international total would be about $5bn, but China consumes up to 70 per cent of all rare earths produced.

Yet individual projects being developed outside China can each cost about $1bn by the time all the complex chemical processing is taken care of.

Moreover, Kingsnorth says global demand is about 115,000 tonnes a year -- yet the biggest Chinese producer, Inner Mongolia Baotou Rare Earth, according to his estimates, has stockpiles of about 80,000 tonnes and aiming at 100,000 tonnes.

So where is the demand for all the projected output? This will be one of the issues he raises when addressing a minerals conference in Hong Kong this week.

He may even regale them with his conference joke which points out that in the gold rushes the only people to make money were the brothels and taverns; with the rare-earths rush, the sole beneficiaries so far are the conference organisers.

However, there will, as we have pointed out before, still be a shortage of a few heavy rare earths such as dysprosium, terbium and yttrium.

Bob Richardson, who chairs Crossland Uranium Mines (CUX) with its Northern Territory rare-earths project, is also of the view that the world is about to be flooded with the less valuable light rare-earths. That's why he is pushing the fact that CUX has a large component of the above-mentioned heavies, along with neodymium and the highly priced europium.

Richardson would not be drawn further on a previous announcement that an international rare-earths company had twice visited the Charley Creek project and since asked for samples to process in its laboratory. But the key word in that announcement about the interested party was "producer".

We also understand that it's based in the US. That makes for a very, very short list.

In the meantime, CUX is looking by 2015 to produce a 40 per cent rare-earths concentrate. Not ideal, as this doesn't maximise profitability, but this modest first stage aim -- along with the fact the deposit is alluvial, not hard-rock -- should make the capital cost a fraction of its competitors' $1bn.

A refinery could follow later.

The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice. The writer does not own shares in any company mentioned.

[url]http://www.theaustralian.com.au/news/bauxite-opportunity-for-locals/story-e6frg6n6-1226514719461[/url]