ETM - Energy Transition Minerals

[jbocker]

GGG make announcement today of further improvements in the feasibility studies of mining. That's good news.
https://www.asx.com.au/asxpdf/20190515/pdf/4453f67t8s65r1.pdf
Well I waiting on that big announcement at the end of month at the AGM, so that I can win the tipping comp.

 

[jbocker]

I am going to start believing my own press (including the BS). Something might have jumped out of the bag and its run off down the street. UP 34% today. Is there something afoot?

 

[jbocker]

The presentation at the AGM today.
It is a BIG Rare Earth Resource promising to be a low cost operation. MotleyFool says the share price uplift over the last 2 months is due to US/China trade conflict impacts on RE pricing, and the reported improved mining efficiencies in the feasibility studies.
https://www.asx.com.au/asxpdf/20190531/pdf/445hxzkghpgcd0.pdf

 

[jbocker]

I am picking this in the 2020 competition (and win the $1000 prizemoney)

Rare Earths, a massive resource, been known for a loooong time but uranium has been holding it back, due to conservative approach in Greenland and Norway. Has undergone extensive studies and reviews the governments have become favourable and I think its getting close to a mining grant. With that hopefully triggers a growth in share price. It is my PUNT pick.

 

[jbocker]

Sorry previous post should have read Denmark not Norway.
The Danish government historically oversaw Greenland.

 

[fergee]

GGG looking like it might be good play for the next couple of years as rare earth sector pivots away from chinese supply.

 

[jbocker]

GGG looking like it might be good play for the next couple of years as rare earth sector pivots away from chinese supply.

Largest shareholder is a Chinese company (Shenghe Resources) with extensive Rare Earth experience. Far from a controlling interest but (in my tiny brain) I do wonder if they may strategically lock up the huge resource along with all of Chinas RE resources.
I also wonder if down the track a big bun fight for a controlling number of GGG shares plays out by NON Chinese interests once a mining grant is issued or after any other significant milestone.

 

[frugal.rock]

GGG looking like it might be good play for the next couple of years as rare earth sector pivots away from chinese supply.

Is the sector pivoting away from China... OR the reverse?
One needs to understand the rationale, why plunder your own country first?
Not to mention, there is no rush for the end game...
Might be far from a controlling interest, but who, what, when and where will the product be processed etc?
The truest "controlling interest" is the buyer, yeah?
F.Rock

 

[fergee]

Largest shareholder is a Chinese company (Shenghe Resources) with extensive Rare Earth experience. Far from a controlling interest but (in my tiny brain) I do wonder if they may strategically lock up the huge resource along with all of Chinas RE resources.
I also wonder if down the track a big bun fight for a controlling number of GGG shares plays out by NON Chinese interests once a mining grant is issued or after any other significant milestone.

I didn't realise that its major shareholder was a Chinese firm, I haven't been following this company very closely, to be honest. Your bun fight rational over control of this resource between China and the West makes logical sense. Interesting how Trump tweeted out he was keen to buy Greenland not long back could be a signal there about Greenlands true economic/strategic value.

 

[fergee]

Is the sector pivoting away from China... OR the reverse?
One needs to understand the rationale, why plunder your own country first?
Not to mention, there is no rush for the end game...
Might be far from a controlling interest, but who, what, when and where will the product be processed etc?
The truest "controlling interest" is the buyer, yeah?
F.Rock

Smart play would be to hold reserves for future use in safe jurisdictions, for China that's inside China itself. For the US that could be in any NATO, ANZUS or trusted ally country. The truest controlling interest is not always the buyer because it would depend on the elasticity of the product and how supply is managed. In this case the sellers (80% Chinese controlled companies essentially controlled by the CCP) probably hold a stronger hand than the buyers due to rare earths being so strategically important hence why China can potentially wield this as a stick in future trade disputes.

 

[jbocker]

The truest "controlling interest" is the buyer, yeah?

In the majority of cases yes. But if you hold all the goodies, you get to shop around the buyers. Not saying this is the case here with Rare Earths (yet).

who, what, when and where will the product be processed etc

Good billions of dollars questions! Interesting recent questions being played out with Lynas Corporation (LYC)

 

[jbocker]

Interesting how Trump tweeted out he was keen to buy Greenland not long back could be a signal there about Greenlands true economic/strategic value

Do you know when that was? There was a uplift in GGG pricing April May/June this year and has maintained an elevated level since.

 

[fergee]

Do you know when that was? There was a uplift in GGG pricing April May/June this year and has maintained an elevated level since.

It was in August. I wonder if the elevation is due to market sentiment stemming from the trade dispute between US and China?

 

[fergee]

Sorry, the elevation obviously is from the trade dispute. A better question would be why is it still elevated now that trade talks are making progress and China has dropped a whole bunch of tariffs? Does the market not believe it? Or is it because the Pentagon is now interested, possibly investing in, the rare earth sector in Canada, AUS and other friendly nations?

 

[VERUS8]

The REE sector is rife with mum and dad speculators who jump on any “positive” news that is portrayed bt the “media”. It’s an opaque sector with dozens of speculative companies vying for more cash to keep the doors open for longer hoping, dreaming that the “Rare Earth boom” form 2011 will see similar prices revisited again.
The REE sector and the remaining listed companies should be viewed as a short term investment when the news flow is positive IMO. Hardest part is picking the right time to invest.
As for GGG, I don’t believe the companies glossies about cost savings and lowest cost producer. It’s all smoke and mirrors to make the project sound good to potential investors. Just look at the prices used for “credits” that have been applied to reduce COP numbers to a level they can then claim to be lowest cost producer out of any non developed REE companies. It’s a disgrace IMO.

 

[jbocker]

Just look at the prices used for “credits” that have been applied to reduce COP numbers to a level they can then claim to be lowest cost producer out of any non developed REE companies. It’s a disgrace IMO.

As a miserable mum and dad 'speculator' I would be happy for the enlightenment, of what is specifically wrong with the numbers. It is difficult to know what to believe from those glossies.

 

[VERUS8]

As a miserable mum and dad 'speculator' I would be happy for the enlightenment, of what is specifically wrong with the numbers. It is difficult to know what to believe from those glossies.

"As a miserable mum and dad 'speculator'" Most of us are

If you have a read of the companies optimised feasibility update dated 15.05.19 you will notice it mentions in the highlits "Unit costs reduced to <$US4/Kg of rare earth oxide, net of by-product credits".

Scroll down to p.3 and under the table "Average annual by-product output includes:" you will find the prices assumed for by-product credits are: U3O8 US$40/lb, zinc concentrate US$1000/t, fluorspar US$400/t.

https://wcsecure.weblink.com.au/pdf/GGG/02105750.pdf

Current spot price,
U3O8 US$24.55 https://markets.businessinsider.com/commodities/uranium-price

Without knowing the grades of zinc concentrate or fluorspar it is difficult to find an accurate price for the zinc concentrate and fluorspar but based on the U3O8 price im sure they would be extremely inflated. GGG should just come clean with the REO cost of production rather than applying "credits".

The improvements made on the companies feasibility study results are unbelievable. The company engaged experts to conduct pilot plant trails, study the results and then produce the data for the feasibility study. Either the experts they engaged were extremely incompetent or the optimised feasibility results are too good to be true. I would pick the latter.

 

[jbocker]

Without knowing the grades of zinc concentrate or fluorspar it is difficult to find an accurate price for the zinc concentrate and fluorspar but based on the U3O8 price im sure they would be extremely inflated. GGG should just come clean with the REO cost of production rather than applying "credits".

Thinking about this gives me headaches, but I wonder if since it is an update have they kept the original values of the 'credits' and is that justifiable? I agree the simple REO production cost would be simpler, but I wonder if the credits are valid to quote as other mines would likely place their specific credits also. (Excuse me while I take a Panadol).
In reality it is the U3O8 that has kept the REO from being mined in the first place, and why there has been extensive studies required along with political rethinking.

 

[VERUS8]

Thinking about this gives me headaches, but I wonder if since it is an update have they kept the original values of the 'credits' and is that justifiable? I agree the simple REO production cost would be simpler, but I wonder if the credits are valid to quote as other mines would likely place their specific credits also. (Excuse me while I take a Panadol).
In reality it is the U3O8 that has kept the REO from being mined in the first place, and why there has been extensive studies required along with political rethinking.

The feasibility study was released in 2015 and the credits were as follows:
U3O8 - US$70/LB
Zinc - US$1000/t
CaF2 (Calcium Fluoride) - US$350/t
They also included Cerium Ce and Lanthanum La as by-products/credits
Ce - US$5/Kg
La - US$6.5/Kg

I have a feeling the by product prices are based on higher purity products then what GGG will actually be producing. Take the Cerium and Lanthanum as an example. They have used a separated oxide price for each as a by product credit, when the reality is they will only be producing a mixed concentrate which sells for substantially less. They would be lucky to get $1/Kg for a mixed Ce/La concentrate. Not only that the prices for the separated oxides they have used are inflated by 200% of what they actually were at the time. Can understand they have forecast the prices at the time in 2015 to what they believe prices would be in 2019 using Adams Intelligence reports, but as we all know those prices where no where near accurate.

If you look at table 26 of the feasibility study on p.29, all prices for rare earths they have used to calculate project revenue are 100-200% more than what they actually sell for not only back then but today as well.

Its a complete and utter scam, every junior REE exploration company is the same. Never believe any of the details released by the company when it comes to project feasibility and of course DYOR.

Link to Feasibility Study:
https://wcsecure.weblink.com.au/pdf/GGG/01627899.pdf

 

[jbocker]

Been some activity and rise in SP in recent times, maybe the interest in the company is increasing with anticipation of approvals and potential grant of a lease for mining ??