ARU - Arafura Rare Earths

[RedLion22]

Can confirm the large price increases from Metal Pages UK. Very strong rises for Ce and La! (common LREEs)

Prices are Chinese prices, Oxide FOB China prices should be updated by Thursday (Oxide prices below give an indication of increases in Oxide FOB prices)

Ce Metal 99% min China +7.61%
Ce Oxide 99% min China +1.25%
Dy Oxide 99% min China +9.32%
Dy Metal 99% min China +4.35%
Eu Metal 99% min China +9.64%
Eu Oxide 99.9% min China +4.17%
Gd Metal 99% min China +8.25%
Gd Oxide 99% min China +2.67%
La Metal 99% min China +9.28%
La Oxide 99% min China +9.92%
Nd Metal 99% min China +2.26%
Nd Oxide 99% min China +3.50%
Pr Metal 99% min China +6.37%
Pr Oxide 99% min China +4.80%
Pr-Nd Metal 99% min China +6.41%
Pr-Nd Oxide 99% min China +4.88%
Tb Metal 99% min China +6.17%
Tb Oxide 99% min China +2.90%
Y Oxide 99.999% min China +4.17%

 

[jonojpsg]

Any day traders out there might want to jump in for a few cent gain...IMO of course, sell depth light from 1.10 up to yesterdays close of 1.145 and buy depth below 1.10 is reasonably good over next four ticks.

On a fundamental note, after watching interview posted recently here, the supply/demand issue is definitely in ARUs favour (and any other non-Chinese supplier) given the situation with Chinese export quotas, and as pointed out, even if China relaxed quota restrictions, they are using most of what they produce anyway. Yes prices would drop considerably from where they are now ($150+/kg) BUT ARU is sitting pretty even at $50/kg

Also, even if China slows, look at the comparison of say India and China vs Australia in terms of mobile device use (one of the main users of REs). Aus has a mobile ownership rate of close to 100% - if China and India head towards that over the next 10 years that's a SIGNIFICANT amount of mobile devices!! Plus all the electric cars/flatscreens/etc.

I am making this a cornerstone of my portfolio over the next 2-3 years to production as I can see it being a major gainer...all IMO of course, but the data is there to see so DYOR

 

[Julia1979]

Big news for ARU today!!

LOI signed with a ThyssenKrupp daughter about REO sales in Germany and cooperation.

regards
Julia

 

[pixel]

Big news for ARU today!!

LOI signed with a ThyssenKrupp daughter about REO sales in Germany and cooperation.

regards
Julia

That co-op had been on the cards for some time; it would help explain the recent spate of accumulation, evident in the high trading volumes.
Anyway, it's nice to see it confirmed - I'm back on board

 

[pixel]

Arafura (and Lynas) also featured strongly in tonight's Catalyst on http://www.abc.net.au/iview/
The presentation was of course aimed at a broader audience, but may well rekindle some additional investor interest in REOs.

(not sure though whether tonight's slump in O/seas markets will give us much chance.)

 

[Logique]

The All Ords jumped up above 4300, important. Casting around, I know you're a follower of Arafura Julia1979, so had a look at a chart - looks solid. Don't like the volatility of Lynas atm, makes me suspicious.

In percentage performance terms ARU has been catching up to LYC this year. And then there's the LOI with ThyssenKrupp for REO sales in Germany. Overall quite a good story.

(Typo in chart below: of course the high was in Oct '10 not '11)

 

[jonojpsg]

Definitely undervalued IMO - market cap of around $200m when Nolans NPV is about, what $6bn with REO prices of around $50 and even with the pullback in prices lately that is still about 60% lower than current REO price.

I think RCR research report put the NPV at $3.70 per share with an REO price of $40 - and LYC is ten times the price of ARU albeit two years further down the track - so maybe a ten bagger over the next 2-3 years? At least that's what I'm in for - hopefully recent low of 43c will be the floor - I'm in at 45

 

[Logique]

I'd like to believe the cancelled capital raising had more to do with the uncertain macro investment environment. The silver lining is that we didn't get sp diluted. I'm below my entry price on this one, but I bought low, so no biggie.

Company management know they are sitting on quantity, high value reserves, and processing at Whyalla takes out the sovereign risk factor that Lynas has in Malaysia.

 

[jonojpsg]

I'd like to believe the cancelled capital raising had more to do with the uncertain macro investment environment. The silver lining is that we didn't get sp diluted. I'm below my entry price on this one, but I bought low, so no biggie.

Company management know they are sitting on quantity, high value reserves, and processing at Whyalla takes out the sovereign risk factor that Lynas has in Malaysia.

Yep Logique, that was a big factor in my anticipation of a better run for ARU than LYC - can't understand quite why SP hasn't been stronger though given the progress ARU have made with processing technology, integrating operations, etc? Haven't kept up with LYC issues - what's the latest from Malaysia? I guess any ongoing holdups are only a good thing for ARU?

 

[Clansman]

I would hardly call Malaysia sovereign risk. Ever been to Kuantan, it is not exactly the Congo.

 

[laurie]

Things will not go right for ARU if they keep delaying the project going from memory it's 18 months behind, I stand to be corrected

 

[Kremmen]

Big rise off the bottom today. 37c to 45c on quite large volume. I've not seen any obvious catalyst for the move.

(But happy to see it, as I became a holder recently.)

 

[Logique]

The speeding ticket from the ASX was warranted. The stock had risen 15% by the time the (run of the mill) announcement came out at 2:30pm yesterday. It was a typical Arafura announcement, full of promise and flowery language.

Fact is ARU need $70mill soon to proceed with Nolans, and on the heels of the failed capital raising before Christmas, they are no closer to raising it. Management wouldn't have minded the rise in the sp though.

Same old same old with this lot.

 

[Logique]

I would hardly call Malaysia sovereign risk. Ever been to Kuantan, it is not exactly the Congo.

Yes a little overstated perhaps, I had in mind more the political game playing over the still awaited Lynas LAMP license.

 

[RobVan]

Macquarie Capital is almost done collecting funds. Big players are buying in big to ARU. This company will take the lead from Lynas in a few months.

 

[RobVan]

Just picked up some ARU for cheap. It's a solid company with huge future, can't go wrong.

 

[calais]

The announced today tells us the BFS will not be completed prior to Q3 2013 provided they get funds in the next couple of months.

Is that another delay of 9-12 months?

Originally the completion of the BFS was supposed to finish mid year 2011, then announced they need to expand the BFS for nine months and now another delay.

So, provided they raise the funds needed to complete the BFS and construction taking 18-24 months Arafura will not start processing till late 2015.

That's my timetable for Arafura, would like members feedback on this topic.

 

[Dang]

The announced today tells us the BFS will not be completed prior to Q3 2013 provided they get funds in the next couple of months.

Is that another delay of 9-12 months?

Originally the completion of the BFS was supposed to finish mid year 2011, then announced they need to expand the BFS for nine months and now another delay.

So, provided they raise the funds needed to complete the BFS and construction taking 18-24 months Arafura will not start processing till late 2015.

That's my timetable for Arafura, would like members feedback on this topic.

That's pretty much the way I read it. Fortunately for me holders didn't freak and push it into my trailing stop territory. But looks like we're in for a long term hold before we see the returns we're expecting. IMO the correction is fairly well measured. Thought about being a bear and selling my meager 4500 shares so I could buy them back cheaper after the fright, but I figured I'm in this one for the bull run, so I gritted my teeth and rode it out. I would love to know how many of the 5M+ shares that changed hands over the day are back in the same hands at the end of the day. The intraday chart shows a quick and nicely damped correction to a sensible price, no massive overshoot to the bottom before recovery.

Still massively undervalued if you ask me, if I could I would buy more at this price.

 

[laurie]

lol guys they have blown $250M to get where they are now god only knows where that money went

 

[Logique]

Slash and burn of the Board, see the latest ASX announcement.
http://www.asx.com.au/asxpdf/20120216/pdf/424d53cvtpst6l.pdf

CEO stepped down, two directors retired, and another two elected to step down.