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> GeoMegA will Benefit from China’s Military Spending & New War on Pollution <
If you saw my report here last weekend you may remember I stated:
As China continues to be over-run with incredible pollution problems, I have to think that in the years ahead they will be forced to accelerate the deployment of electric vehicles, trains, and wind-farms. This would strain an already tight market for Neodymium, Dysprosium and Praseodymium.
Only four days later China launched their “War on Pollution”
GeoMegA Resources Inc. (TSX: V.GMA, Stock Forum) (V 75 cents)
Last weekend I noted that I would provide further insight into GeoMegA as I first featured the technology aspect of their business in this weekend report on February 15th.
My analysis this weekend is long (15 pages) so I had to put it in a PDF format. If you click on this link it will take you to the full report
Below is a snapshot.
With respect to GeoMegA, the big question is... what is their Montviel rare earth deposit really worth
and what will the company be worth if their new rare earth processing technology is a commercial success over the next couple years? Taking into consideration:
1) With approx. 50M shares outstanding the market cap is less than $40 million
2) In addition to many other rare earths, the Montviel deposit is rich in the critical magnetic elements of Neodymium, Dysprosium, and Praseodymium
3) The ore that the rare earths are contained in is called a Carbonatite. This is an easier ore to leach and the huge majority of rare earth mines in production around the world originate from a Carbonatite deposit.
4) Montviel is located within Canada and mining friendly Quebec
5) Montviel is close to critical infrastructure keeping capital costs of mine development down.
6) The orebody is contained within a small footprint, has low overburden, and could be mined underground to keep the environmental impact very low.
7) A world class engineering firm has been working on their preliminary economic assessment (PEA) which should be available in two to three months - along with an updated 43-101 resource estimate within a month. GMA is one of the most advantage stage rare earth exploration companies in North America.
8) GeoMegA is one of the ONLY known companies with an advanced technology in development for processing (purifying) rare earths using NO organic solvents.
The global demand for technology continues to grow and without rare earths none of it is possible. MolyCorp in California is helping to reduce U.S. dependency and mitigate the risk to the U.S. military but still the world is dependent upon China for at least 90% of our rare earths (and I believe 100% of the Dysprosium). Lynas has a new and very controversial rare earth processing plant in Malaysia but it is sourcing radioactive material from Australia.
As China now escalates their military spending and attacks this massive pollution problem head on, I can only wonder what impact this will have on rare earth supply and pricing in the years ahead
. Their first priority will be China and if the supply of magnetic elements hits a choke point or bottleneck, then every country is going to suffer.
Until new rare earth processing facilities or technologies emerge "outside" of China, G8 Countries better hope they don't upset China to the point they begin to use rare earths for political leverage.
Disclosure: Danny Deadlock owns 75,000 shares of GeoMegA purchased in January and February 2014.