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KRO Weekly Summary: June 9 to June 15, 2019


KRO Weekly Summary: June 9 to June 15, 2019
The KRO Summary lists all Trackers and Blogs published during the designated weekly or monthly period so that so readers can easily catch up on what they may have missed. We no longer notify KRO members by email about new material except in special circumstances. When a Tracker is posted at KRO we notify members through the KaiserResearchOnline Slack Workspace. If you are an active KRO member and not registered on Slack, please let us know and we will send the invite. We will email the link to the KRO Summary to all KRO members when it is published. We will also Tweet the link so that Twitter followers can catch up at their leisure. The title links to the Tracker or Blog, the charts in the Discovery Watch Blog link to the YuoTube audio segment for that company, and the Tracker charts link to the free Corporate Profile. On occasion we may include commentary on the state of the market.
The KRO Rare Earth Resource Center is now ready for Rare Earth Mania 2.0 to happen. It has a map with icons of active REO projects of KRO companies, long term price chart snapshots of the key rare earth oxides - we are so not anywhere near the price breakout situation of 2010-2011, a list of rare earth deposits, each of which links to a dedicated page for that deposit, and, if the project has a KRO company as an owner, a link to the free corporate profile of that company. The dedicated deposit pages currently have only an embedded google map, a REO distribution chart, and a long term and short term REO basket price chart. Over time I will flesh out these deposit pages with additional information. That part is all pretty much a public service. Beneath that is a "daily market activity" list of companies involved with rare earths, beneath which are short and long term charts as well as recent news release links like in the other Resource Centers. I will do some deeper research on these companies and let KRO members know what their chances are of participating in Rare Earth Mania 2.0. A lot of money was spent during 2010-2014 on these projects, but when you look at where the basket prices and rock values are today compared to 2010-2011, you know immediately that none of the deposits are worth developing today except Mt Weld which is the richest, large light rare earth deposit in the world and already in production. But if REM 2.0 starts happening, KRO will be ready. Rare Earth Mania 1.0 took place in 2010-2011 when China allowed rare earth prices to soar 10-20 times as part of a strategy to shift into China the manufacturing of components that required rare earths. The supply squeeze created demand destruction as end-users invested in substitution technologies and thrifting which is making more efficient use of a scarce input. On top of that the WTO ruled that China's supply restriction policies such as export quotas were illegal, and rare earth prices collapsed below where they started in 2009. The dozens of rare earth projects held by juniors that underwent extensive exploration and feasibility demonstration work during REM 1.0 ended up worthless. Rare earth users enjoyed a dual bounty in the form of cheaper than ever prices and more efficient usage of rare earths. This holiday, however, may be coming to an end. Globalized free trade is under attack by the United States through protectionist trade policies intended to "Make America Great Again". China's ambition to rival the United States as an economic, technology and military super-power is now seen as the biggest threat by both American political parties. Nothing less than China's utter subjugation to America's will and the shelving of its ambition is being demanded. Such a humiliating capitulation by China is unlikely. A likelier outcome is a fragmentation of the global economy into smaller trading zones, which is quite doable, though will be very painful to businesses and consumers along the way and highly disruptive to today's global supply chains where manufacturers, regardless where final assembly is based, source components from many countries. Most raw materials have a geographically diversified supply with varying degrees of profitability. Rare earths are one group which comes mainly from China due to cost advantages rooted in natural abundance and China's willingness to serve as the rest of the world's emission cost dumping toilet. Rare earth deposits outside China need much higher prices to be worth mining. Except for those in Russia most known deposits are owned by resource juniors. Rare Earth Mania 2.0 would erupt if it became clear that Chinese rare earths are no longer going to be available to the global economy through official or illegal channels. China is completely within its rights to clamp down on polluting or illegal production, and to start conserving domestic resources for national security reasons. It is reasonable to expect a decline in global supply from its estimated 150,000 tonnes without China turning rare earth supply into a geopolitical weapon in a context where the rules based world trade order has been demolished by Trump's MAGA policies. This is a longer term story than that of Rare Earth Mania 1.0 because it will take 4-6 years to bring non-Chinese production on stream. End-users and potential rare earth producers are in a standoff because at the current rare earth prices non of the undeveloped deposits outside China make economic sese to develop. It is simpler for the end-users to wait for Trump to vacate the presidency and the globalized free trade status quo to be restored. In recent weeks Trump's focus has turned to Iran during the 40th anniversary of the Shah fleeing the country and the theocrats taking the US embassy in Tehran hostage. There is a lot more behind the USA walking out of the 2015 nuclear deal and bringing Iran to its knees with economic sanction. A favorable outcome would be the Iranian people ditching the Shiite theocrats and turning Iran back into a secular nation. A likelier outcome is that the Revolutionary Guard is prepared to destroy Iran rather than capitulate to American demands. Russia and China are lined up behind Iran from whom China gets oil. China has a plan to make its transport system completely electric by 2025 to rid itself of its import dependency on oil and vulnerability to America shutting down its oil supply. The United States is no dependent on oil imports thanks to the shale oil fracking revolution; substantially higher oil prices may annoy Trump's rural base, but it makes shale oil production more profitable. Pretending to help the Saudi allies by forcing Iran out of the struggle for control of the Middle East will leave America blameless for the hell that breaks loose in the Persian Gulf if the Iranian theocrats embark on a suicidal scorched earth response. It is unclear how Russia and China will react in that event but it is very likely that gold launches into a major uptrend as it did in 1979, the peak equivalent of which would be $3,500 per oz using my gold stock value as a percentage of global GDP as a metric. Should this happen, FOB rare earth prices would also break out. We need a gain of 3-5 times current levels to make the deposits outside China worth developing. KRO Rare Earth Resource Center and its collection of rare earth related juniors is designed to help track the Rare Earth Mania 2.0 story. For now it is a non-event, but I've made it easy to see early warning signs that it is becoming a reality. (Also, ask you can see from the Lynas chart above, we now have 25 year charts for companies with more than 12 years of trade data.)
Jun 10, 2019 - Blog - KRO Weekly Summary: June 2 to June 8, 2019
Jun 12, 2019 - Blog - KMW Blog June 12, 2019: Discovery Watch June 12, 2019 with Jim Goddard and John Kaiser
Uravan Minerals Inc (UVN-V) Eastfield Resources Ltd (ETF-V) Tri Origin Exploration Ltd (TOE-V)
Jun 12, 2019 - Tracker - Tracker: Spec Value Rating for Cariboo Rose Resources Ltd (CRB-V)
Cariboo Rose Resources Ltd has a Bottom-Fish Spec Value rating based on its 100% ownership of the Canadian Creek project strategically located to the west of the Casino copper-gold porphyry deposit in the Yukon owned by Western Copper and Gold Corp for which a feasibility study was completed in 2013. Casino is at the permitting stage but infill drilling is being done during 2019 in a effort to reduce the strip ratio. The 6,180 ha Cdn Creek property also adjoins to the southeast of the Coffee gol...
Jun 12, 2019 - Tracker - Tracker: Spec Value Rating for Eastfield Resources Ltd (ETF-V)
Eastfield Resources Ltd has a Bottom-Fish Spec Value rating based on its status as the mothership of Bill Morton and Glen Garratt who launched the junior on the VSE by IPO on August 12, 1987 to fund the Indata project. Eastfield has never done a rollback and still has less than 50 million shares fully diluted. Normally focused on BC and Yukon where by 1992 Eastfield had acquired the Spanish Mtn and Cdn Creek projects, by the mid-nineties Eastfield had branched out into Nevada and the Voisey's ba...
 
 

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