Gold and Rare Earth Juniors – A Perspective

TORONTO – 

The Critical Metals Report: The Gold&Discovery Fund had impressive gains of about 70% in 2009 and 2010, but was down 35% in 2011. Do you believe you fully understand what happened to the junior miner explorers in 2011? Did you learn enough to protect investors from another year of negative returns?

Terence van der Hout: We were overweight in rare earths, which made us a lot richer in 2009 and 2010, but hurt us a lot more in 2011. Despite crashes, however, we still have a compound annual growth rate of 17% over the four years that we’ve been in existence.

We are an investment fund and we don’t take short positions by principle. We take long equity positions in companies that we believe will excel. But that also means that we have to accept crashes as they occur. We still believe in rare earths. The downturn in 2011 provided us with a buying opportunity.

Mkango Intersects Further Extensive REE Zones at Songwe and Provides Exploration Update

Mkango Resources Ltd. (TSX-V: MKA) announced today results for the remaining three holes (PX027, PX030 and PX031) of the Stage 1 drilling programme at the Songwe project in Malawi. Highlight include: 81.5m grading 1.3% TREO (20.3 – 1o1.8), including 18.7m grading 2.1% TREO (80.0 – 98.7 from hole PX027 and 13.0m grading 1.4% TREO (68.0 – 81.0m).

 The main highlights from the first phase of exploration are as follows:

• Eleven of the thirteen holes drilled in Stage 1 intersected significant zones of rare earth mineralisation, including higher grade zones and areas of heavy rare earth enrichment. Drilling and surface mapping to date have confirmed that the extent of the mineralised carbonatite is much greater than indicated by historical exploration
• Drilling, surface mapping and sampling has outlined TREO enriched carbonatite, fenite and breccia lithologies, largely exposed at surface, within an area measuring approximately 350m by 20-150m, with mineralisation open to depth. This area will be the focus of the next phase of drilling.
• Rare earth mineralisation, in addition to niobium mineralisation, is pervasive throughout the carbonatite, breccia and fenite lithologies and there appears to be a separate phase of heavy rare earth and yttrium enriched mineralisation which extends well beyond the carbonatite zones
• Mineralogical analysis of the rare earth bearing lithologies is well advanced and representative sections of core are now being selected for scoping metallurgical test work to commence in 2012
• Exploration has recently identified two breccia zones within 3km of Songwe with highly anomalous yttrium values as analysed by a hand held niton XRF
• Regional exploration has commenced, targeting other known vent systems, breccia zones and other new exploration targets identified through satellite imagery and analysis of radiometric data

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Mkango Resources Intersects Significant Zones of Rare Earth Mineralization at Songwe Including 57.5M GRADING 3.8% TREO

Calgary, Alberta: September 14, 2011 Mkango Resources Ltd. (TSX-V: MKA) announced today that it has intersected significant near surface zones of rare earth mineralisation at its Songwe project in Malawi, with zones of higher grade mineralisation and elevated heavy rare earth enrichment also identified.

Mkango has received assay results from ten of its 13 hole Stage 1 drilling programme. Apart from PX023 and PX024, which were vertical holes, drill holes were inclined (60-70 degrees), and were all collared on the north – eastern slopes of Songwe hill, which rises approximately 230m above the surrounding plain.

Highlights of drill results include:

• 117.4m grading 1.6% TREO (184.8 – 302.2m)
• 57.5m grading 3.8%TREO
• 113.8m grading 1.7% TREO
• 178.5m grading 1.3% TREO
• 113.9m grading 1.8% TREO
• 84.9m grading 1.0% TREO
• 89.7m grading 1.6% TREO
• 89.0m grading 1.5% TREO

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George Maniere: Beryllium, Even Sexier than it Sounds

InvestingAdvicebyGeorge – The young Marine sniper lays motionless in a shallow bed of sand and broken rock on the mountainside in Afghanistan. The sun blazes down, and he’s sweating. He’s spent the morning scanning a valley for Taliban fighters who keep a low profile in their maze of spider holes.

After a while, another Marine – the spotter – says, “I’ve got him. He’s just next to the tree, to the left of that stone house.”

The sniper stares down through the optics of his rifle. Yes, indeed. The image is perfect from over 1,000 meters away. There’s a very shallow footprint in the dirt, and next to it is a telltale cigarette butt. This Taliban has just smoked his last one.

The sniper turns a small knob on the gun sight. The image holds steady. There’s no vibration at all. THE Marine has a clear view, his eyeballs on target, and a confirmed bad guy. He is given his order – fire at will. He squeezes the trigger, and… Wham! One terrorist has been eliminated. 

Morgan Stanley: Commodity Prices to Snap Higher in H2, Dollar Unlikely to Recover Until 2012

LONDON – Ron Leven of Morgan Stanley has recently delivered a presentation under the auspice of ETF Securities Ltd. in which he outlined his expectations for the major currencies.

He argues that it was perhaps inevitable that we would be running into a rough patch in the economy in mid-year, when the Fed’s QE programme is due to stop.   There is a fair amount of uncertainty about the implications for the US and the global economy of the ending of the liquidity injections.   What is the source of the current softness?

Morgan Stanley believes that the current weakness in both the US and global economy is temporary and is currently stemming from the production disruptions in Japan along with unusually severe weather in the US in H1 2011.  There is also some legitimate slowing in China as the inflation problem becomes significant.  The slowdown is real but temporary; over the rest of the year Japan’s reconstruction efforts will be a source of strength, while the US economy is expected to regain traction in the second half of the year.  Leven argues that the easy gains in productivity in the early part of the recovery cycle in the US are now over; Morgan Stanley is looking for a significant pick-up in capital investment over H2 and this is expected to generate US growth of approximately 4% on average over the second half-year.  China, although struggling with inflation, is thought to be intent to maintain growth at 8-9%.  Expect China to be able to underpin the economy through increased infrastructure investment, even as the government makes material efforts to reduce inflation.

Ted Butler: The Rarest Earth

SilverSeek.com – Those who keep up with business news will have no doubt read about the recent developments in the category of minerals known as rare earth elements (REE’s). These are minerals that are vital to modern industrial applications, ranging from lasers, batteries, alternative energy, and superconductors to all sorts of important high-tech applications. There are 17 minerals classified as REE’s with exotic names like scandium, yttrium, lanthanum, cerium, and praseodymium. Don’t worry, this is not a technical discussion and this will probably be the only time I write about rare earth elements.

Actually, these minerals are not all that rare, in the strictest sense of the word.  Many are quite abundant in the earth’s crust. What makes them rare is that they are generally not concentrated in ore bodies offering economically feasible extraction. The first rare earth mineral was discovered around 1800, in a village in Sweden named Ytterby, and several REE’s are named after that village. Up until about 1950, most rare earth production came from India and Brazil. In the 50’s, South Africa was a big producer, then California took the lead from 1960 through the 1980’s. Then, China came to be the dominant producer by far, and currently produces 97% of world production.

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Coxe Bullish on Copper, Iron Ore; Wary About Rare Earths Equities

RENO, NV – In spite of a more complicated outlook this year, global commodity strategist Don Coxe still believes both the metals and mining sectors will do well on a year-over-year basis.

Coxe’s bullish case for copper over the longer term remains what he has been saying for the past decade, “The growth in demand as Asia industrializes will continue to support the industrial metals.”

“These economies are compressing-into forty years-the economic growth we achieved over two centuries,” he said in a Basic Points–The Metals Take Center Stage analysis published this week. Plus, Coxe observed, “China is a far better credit risk than the US, and the metal miners shouldn’t be losing sleep that their biggest customer is going to disappear into a debt hole.”

India to Gain from China’s Rare Earth Standoff

MUMBAI – India suddenly finds itself in direct competition with China in the least expected of arenas – the supply of rare earth (RE) metals. India, which contributes 2% of the global output of rare earths, has been in the headlines for some months now vis-a-vis the precious commodity.

The catalyst has been the tension between China, the world’s largest producer of RE, and Japan, which sparked off in October this year. The situation has made Japan turn to an unlikely ally in its hour of crisis, India, among other friends.

On December 8, Toyota Tsusho Corp, a Toyota Motor Corp group company,  announced that it would build a rare earth processing plant in India and start shipping 3,000 to 4,000 tonnes a year of the mineral to Japan as early as 2012.

USGS Finds Rare Earths May Not Be So Rare

RENO – The first-ever nationwide estimate of rare earth elements by the U.S. Geological Survey determined 13 million metric tons of REE exist within known deposits in the United States.

USGS Director Marcia McNutt said, “Although many of these deposits have yet to be proven, at recent domestic consumption rates of about 10,000 metric tons annually, the U.S. deposits have the potential to meet our needs for years to come.”

The first detailed assessment of rare earths for the entire nation, the new USGS report is part of a larger study funded by the U.S. Department of Defense of how the U.S. and the DOD, in particular, use REE, as well as the status and security of domestic and global supply chains.

Gold, Rare Earths, and Iron Ore – Commodities for a Changing World

KENWOOD, CA –  At the first annual Forbes & Manhattan Resource Summit, Dundee Wealth Inc. Chief Economist Martin Murenbeeld was quick to answer the title question of his session, How long will the bull market continue?

“I don’t have a clue,” Murenbeeld said wryly.

Instead, Murenbeeld presented his “Nine Bullish Arguments for Gold,” which clearly make a strong case for further commodity cycle momentum.

“The shortest (gold) cycle, it turns out, is 10 years. We have just finished the ninth year,” Murenbeeld explained. “With the kind of things that are happening in the global economy, could I stand up here and say to you this will be the shortest commodity cycle in the history of these data? In fact, I’m likely to say this will be one of the longest, if not the longest cycle, in the history of these data.” But before summit, delegates could buy gold futures with their iPhones, Murenbeeld added a caveat.