If North American consolidation in the REE/Li market is in the cards, AVL looks to be a consolidation lottery ticket!

 

 

Avalon Advanced Materials (TSX: AVL)

Consolidation Driver in the North American REE & Lithium Markets

(Some penny stocks shouldn't be overlooked. I believe AVL is one of those)

---

1. Strategic Position in REEs

• Nechalacho Project (NWT, Canada):

  • One of the most advanced REE deposits in North America.

  • 2013 DFS gave an after-tax NPV of ~USD $900M (~C$1.2B).

  • Contains both light and heavy REEs critical for defense, communications, and EV motors.

  • Currently split with Vital Metals (North T Zone) → clear consolidation target for a single operator.

• AVL’s Basal Zone holds the majority of resources, positioning the company as a natural consolidator or takeover target.

---

2. Strategic Position in Lithium

• Thunder Bay Lithium Hydroxide Facility (Ontario):

  • 2024 PEA showed C$4.1B after-tax NPV and 48% IRR.

  • Only planned midstream processing hub linking Ontario/Northern lithium deposits with Southern Ontario EV/battery manufacturing.

  • A rare “ready-made” piece of infrastructure for OEMs or lithium miners seeking to capture IRA credits.

• Lithium Deposits: Separation Rapids (Kenora), Snowbank, and Lilypad → resource pipeline for Thunder Bay facility.

---

3. Why Avalon is a Consolidation Prize

• Few companies combine REE + lithium assets in one portfolio.

• AVL offers both upstream resources (REEs, lithium deposits) and midstream processing (Thunder Bay).

• Consolidating AVL allows a buyer to secure:

  • Long-life REE supply (Nechalacho).

  • A North American lithium hydroxide plant.

  • Eligibility for U.S./Canadian government incentives under the IRA and Canadian Critical Minerals Strategy.

---

4. Potential Suitors & Rationale

• Critical Metals (CRML): Synergy with Tanbreez (Greenland); cross-Atlantic REE strategy.

• Vital Metals (VML): Logical consolidator of Nechalacho (eliminate split ownership).

• MP Materials (MP): U.S. REE giant; Avalon secures Canadian REE + lithium foothold.

• Lynas Rare Earths (LYC): Expansion into North America to diversify from Australia.

• Lithium Americas / Piedmont Lithium: Thunder Bay plant is the missing midstream link.

• Tesla, GM, Ford: Direct EV/battery makers securing feedstock & processing capacity.

---

5. Buyout Valuation & Escalation Potential

• Current Market Cap: ~C$22–25M (@ ~C$0.04/share).

• Risk-adjusted strategic value: ~C$300–600M (C$0.50–0.85/share).

• Likely opening bid: ~C$1/share (~C$637M).

• If multiple suitors compete: Escalation toward C$1.75–2.10/share (~C$1.1–1.3B).

• Extreme scenario (Tesla/MP with gov’t backing): Possible bid north of C$2/share if Thunder Bay DFS confirms economics + IRA/Defense contracts lock in demand.

---

6. Investment Thesis

• Underappreciated value: Market assigns only ~C$25M to assets with multi-billion NPVs.

• Strategic location: Canada = politically secure jurisdiction, aligned with U.S. supply-chain policies.

• Consolidation catalyst: Split ownership at Nechalacho and fragmented lithium supply chain make AVL a natural acquisition target.

• Bidding war potential: With REE + lithium both on the strategic critical list, more than one suitor is almost inevitable.

---

Conclusion

Avalon (AVL) is grossly undervalued relative to its assets. From a consolidation standpoint, it represents one of the few opportunities for REE and lithium players to secure a vertically integrated North American platform.

• Entry today (~C$0.04/share) offers exposure to a potential 25×–50× re-rating if a takeover unfolds.

• A realistic acquisition could settle around C$1–1.25/share, with upside to C$2/share in a competitive bidding war.

---

👉 In short: AVL is a textbook “strategic consolidation play” in the REE market, with built-in lithium upside. The mismatch between current valuation and strategic value makes it highly attractive for patient investors — and a natural spark for a bidding war.

---

The three most likely suitors (MP Materials, Lynas, and CRML) would gain by acquiring Avalon Advanced Materials (AVL), and that could push bidding toward the C$2/share mark.

---

Takeover Case Comparison: Who Benefits Most from Buying Avalon (AVL)?

---

1. MP Materials (NYSE: MP)

Profile: Largest U.S. REE producer (Mountain Pass, California), backed by U.S. defense and IRA policies.

What They Gain From AVL:

• Nechalacho REE deposit: Adds a second North American REE source, diversifying away from Mountain Pass.

• Thunder Bay lithium hydroxide facility: Midstream processing capacity in Canada → critical for EV battery OEM contracts.

• Canadian footprint: Strengthens IRA eligibility and helps qualify U.S. automakers for mineral sourcing credits.

• Geopolitical leverage: Control over both U.S. and Canadian REEs makes MP the undisputed North American champion.

Why They Might Pay Up:

• MP has the balance sheet (US$5B+ market cap) and political support to pay C$1.50–2.00/share for AVL if it locks out Lynas or CRML and secures Canada as a “REE & lithium fortress.”

---

2. Lynas Rare Earths (ASX: LYC)

Profile: World’s largest REE producer outside China (Mount Weld mine, Australia), with Japanese government support.

What They Gain From AVL:

• Nechalacho REE deposit: A second production center outside Australia → diversification + North America expansion.

• Thunder Bay facility: Processing hub ties them into the EV battery value chain — an area where Lynas currently lacks direct presence.

• Strategic partnerships: Japanese offtakers (Toyota, Sojitz, JOGMEC) could be extended into Canada.

• Geopolitical insurance: A hedge against China disruptions and over-reliance on Australia/Malaysia operations.

Why They Might Pay Up:

• Lynas is under pressure to expand capacity in Western-friendly jurisdictions.

• Could justify C$1.25–1.75/share, possibly more if MP enters the bidding.

---

3. Critical Metals Corp. (NASDAQ: CRML)

Profile: Developer of the Tanbreez REE project in Greenland, currently advancing a Definitive Feasibility Study (DFS).

What They Gain From AVL:

• Nechalacho REE deposit: Complements Tanbreez, giving CRML two of the world’s largest non-China REE resources.

• Thunder Bay facility: Instant midstream processing — CRML’s missing piece for vertical integration.

• Lithium exposure: Expands portfolio beyond REEs, adding lithium hydroxide production → higher relevance to EV/battery markets.

• U.S./Canadian critical minerals politics: Strengthens case for DOE/DoD funding, partnerships, and offtake deals.

Why They Might Pay Up:

• CRML is smaller than MP or Lynas, so financing a C$1–2/share bid would require partnerships or equity raises.

• But the strategic synergy is enormous — owning both Tanbreez and Nechalacho could make CRML a takeover target itself later.

• Likely to bid in the C$1.00–1.25/share range, but might stretch higher if MP/Lynas enter the fight.

---

Who Would Push the Bidding War Toward $2?

• MP Materials: Most likely, because of financial capacity and U.S. strategic interest.

• Tesla or GM/Ford (dark horses): If they step in for vertical integration and secure lithium hydroxide, they could shock the market with a C$2+ bid.

• Lynas: Would bid aggressively if threatened by MP’s Canadian expansion.

• CRML: May trigger the bidding, but less likely to win against giants without financial partners.

---

Investment Takeaway

• AVL’s unique REE + lithium + midstream combo makes it the only Canadian consolidator play with immediate strategic relevance.

• Base case: Takeover at C$1–1.25/share (C$637M–800M).

• Bidding war case: Escalation to C$1.75–2.00/share (~C$1.1–1.3B).

• Extreme upside: If OEMs or governments step in, C$2.50–3.00/share is possible, though less likely until DFS updates are complete.

---

👉 This is why AVL at ~C$0.04 today looks like a consolidation lottery ticket

the downside is limited, but the upside is multiples higher if a bidding war ignites

Ed Note: Disclosure: We've been acquiring shares in AVL UCU CRML

Related Articles:

REEs are critical to all cutting edge technologies now and early investors should be rewarded! We just took a small position in our 4th REE stock-CRML

• MP Materials has had a tremendous run in July as the REE fever rose. Going forward, there are others to consider as M&A candidates for MP

Rare Earth Elements - Ucore Rare Metals Inc. - update!

MP Materials has had a tremendous run in July as the REE fever rose. Going forward, there are others to consider as M&A candidates for MP

 

Based on current data (as of mid-2025), rare earth industry trends, government backing, stage of development, and market positioning, here are the top four REE-related companies most likely to increase significantly in value over the next year, ranked by risk-adjusted upside potential:

---

🥇 1. Ucore Rare Metals Inc. (TSXV: UCU / OTCQX: UURAF)

Why it could surge:

• Constructing REE separation facility in Louisiana (RapidSX™ tech)—set to begin commissioning late 2025.

• Strong U.S. government support via Department of Defense funding (DPA Title III).

• Positioned to become first U.S.-based independent REE separator in decades.

• Strategic role in breaking China’s REE monopoly.

Catalysts:

• Facility commissioning, commercial offtake agreements, potential downstream partnerships.

Risk: Execution and funding dilution risk.

---

🥈 2. Ramaco Resources Inc. (NASDAQ: METC)

Why it could surge:

• Already profitable from coal, providing internal capital for REE development.

• Owns a major REE deposit (~1.7M tons TREO), pilot REE plant set for late 2025.

• Strong cost discipline; low debt.

• First U.S. company potentially transitioning from coal to REE production + metallurgy.

Catalysts:

• Pilot plant progress, REE spin-out or joint ventures, metallurgical news.

Risk: REE development is early-stage; valuation still coal-centric.

---

🥉 3. American Rare Earths Ltd. (OTCQX: ARRNF / ASX: ARR)

Why it could surge:

• Controls two of the largest undeveloped U.S. REE deposits (La Paz, AZ and Halleck Creek, WY).

• Exploration results show world-scale tonnage and scalability.

• Gaining visibility as a U.S. critical minerals supplier—potential acquisition target.

Catalysts:

• Updated resource estimates, PEA release, government grants, U.S. defense interest.

Risk: No revenue, pre-PEA stage; high dilution potential.

---

🏅 4. Energy Fuels Inc. (NYSE American: UUUU)

Why it could surge:

• Currently producing REEs (NdPr) from monazite at White Mesa Mill.

• Also active in uranium and vanadium—diversified cash flow.

• Working toward rare earth separation and metals production.

• One of few North American producers already shipping REE concentrates.

Catalysts:

• Rare earth oxide production ramp, long-term supply deals, uranium price spike.

Risk: Multi-commodity exposure adds complexity; commodity volatility.

Honorary mention:  Avalon (AVL.t) see...

nasdaq.com/press-release/avalon-advanced-materials-announces-28-increase-measured-and-indicated-mineral

---

News-Aug 1st... 

msn.com/en-us/money/markets/trump-administration-weighs-expanding-price-support-for-u-s-rare-earth-projects-reuters/ar-AA1JFWnQ?ocid=socialshare

🧭 Summary Table

Rank	Company	Ticker	Key Strength	Near-Term Catalysts	Risk Level
1️⃣	Ucore Rare Metals	UCU / UURAF	REE separation, U.S. gov't backing	Facility launch, contracts	Moderate
2️⃣	Ramaco Resources	METC	Profitable, REE pivot	Pilot plant, REE news	Moderate
3️⃣	American Rare Earths	ARRNF	Massive U.S. deposits	PEA, gov't interest	High
4️⃣	Energy Fuels	UUUU	Already processing REEs	REO output growth	Moderate

Rare Earth Elements - Ucore Rare Metals Inc. - update!

 

Louisiana Rare Earth Separation plant being built

Ucore Rare Metals Inc.

Ticker: UURAF (OTCQX, USA) / UCU.V (TSXV)
Industry: Critical Materials / Rare Earth Elements
Headquarters: HQ, Nova Scotia, Canada
Website: www.ucore.com

---

🧩 Executive Summary

Ucore Rare Metals Inc. is a development-stage critical materials company positioned to become a key player in the North American rare earth supply chain. With the construction of its Louisiana Strategic Metals Complex (LA-SMC) and ownership of the Bokan-Dotson Ridge heavy rare earth deposit in Alaska, Ucore offers vertically integrated potential in a market currently dominated by Chinese supply chains.

Strategically backed by the U.S. Department of Defense (DoD) and the State of Louisiana, Ucore is building a rare earth separation facility using its proprietary RapidSX™ technology, a cleaner and more scalable alternative to traditional solvent extraction.

---

🧱 Business Model

📌 Core Operations:

1. Rare Earth Separation

   • LA-SMC facility in Alexandria, Louisiana

   • Based on RapidSX™ technology (modernized solvent-free REE separation)

   • Designed to process both light and heavy rare earth elements (REEs)

   • Target: 2,000–5,000 tonnes/year TREO separation by late 2026

2. Upstream Resource Ownership

   • Bokan Mountain (Alaska): Contains a large concentration of heavy REEs like dysprosium and terbium

   • Potential to supply LA-SMC, enabling vertical integration

3. Technology Licensing

   • Long-term potential to license RapidSX™ to other processors

---

🧪 Technology Advantage: RapidSX™

Feature	Traditional Solvent Extraction	RapidSX™
Process Type	Solvent-heavy, slow	Solvent-free, modular
Capital Efficiency	High	Lower (smaller footprint)
Scalability	Limited	Flexible/modular
Environmental Impact	Significant	Reduced

RapidSX™ could make Ucore the lowest-cost producer of separated REEs in North America, pending commercial validation.

---

🛠️ Project Pipeline & Government Support

🇺🇸 LA Strategic Metals Complex (LA-SMC)

• Location: England Airpark, Alexandria, Louisiana

• Status: Under construction (groundbreaking in May 2025)

• Commissioning target: H2 2026

• Size: 80,800 sq ft

• FTZ (Foreign Trade Zone) designation for tariff-free exports

• DoD Grant Funding:

  • Phase 1: US $4 million

  • Phase 2: US $18.4 million (executed July 2025)

🏔️ Bokan-Dotson Ridge (Alaska)

• One of North America's richest heavy REE deposits

• 2023 updated mine plan includes low-impact underground extraction

• Capable of supplying internal needs and external markets

🤝 Supply Agreements

• Feedstock MOUs with:

  • ABx Group (Australia)

  • Meteoric Resources

  • Cyclic Materials (REE recycling)

---

📈 Financial Overview (as of mid-2025)

Metric	Value/Estimate
Market Cap	~$120 million USD
Share Price (UURAF)	~$1.37 (July 27, 2025)
Revenue	$0 (pre-revenue)
Cash Position	Est. ~$10–12 million
Burn Rate	~$1.5–2 million/month
Earnings (TTM)	–$4.7 million
P/E Ratio	N/A (loss-making)
Institutional Ownership	~2.7%

⚠️ Financial Risk: Ucore will likely require additional equity raises or grants to stay solvent until commercial operations begin in 2026.

---

🏭 Strategic Positioning & Takeover Potential

Key Differentiators:

• Only North American REE project combining:

  • Midstream separation (RapidSX™)

  • Government funding

  • Heavy REE deposit ownership (Alaska)

Likely Suitors:

• MP Materials, Lynas Rare Earths, or Energy Fuels (expansion)

• Defense primes (Raytheon, Lockheed) securing critical REE supply

• EV/automotive OEMs (GM, Tesla) to de-risk magnet supply chains

• U.S. private equity or industrial funds with national security focus

🧠 Assessment: Takeover becomes far more likely after LA-SMC is operational and revenue-generating in 2026+.

---

📊 Investment Outlook

🔼 Bull Case

• Successfully commissions LA-SMC and validates RapidSX at scale

• Secures long-term offtake agreements (e.g., with U.S. defense or EV supply chains)

• Vertical integration with Bokan Mountain drives long-term margin expansion

• U.S. gov't and DoD increase funding amid geopolitical pressure

🔽 Bear Case

• Operational delays or technical failures in RapidSX

• Inability to raise sufficient capital to reach production

• Larger competitors (e.g., MP Materials) outpace and undercut Ucore

• Prolonged pre-revenue status deters investors

---

⚖️ SWOT Analysis

Strengths	Weaknesses
DoD & state support	Pre-revenue, high burn rate
Exclusive separation technology (RapidSX)	Illiquid OTC listing
Alaska REE deposit	Execution risk (construction, startup)
Strategic U.S. location	Requires ongoing funding

Opportunities	Threats
Rare earth independence from China	Market entry of bigger players
Defense, EV, and tech verticals	REE price volatility
First-mover U.S. separation facility	Regulatory/environmental delays

---

📌 Final Recommendation: Speculative Buy (High Risk, High Reward)

Ucore is one of the only publicly traded rare-earth companies in North America with both upstream and downstream capabilities, government backing, and proprietary technology. Its 2026 commissioning window makes this a forward-looking investment that requires strong risk tolerance.

Investors looking for exposure to the critical minerals reshoring narrative — and willing to accept volatility and near-term dilution — may consider a small, speculative position. Upside potential strengthens significantly post-2026 upon successful commissioning and revenue generation.

The importance of Rare Earth Elements (REEs) used in technologies from Smart phones and AVs to National Defense and Space Tech, cannot be overstated!

Ucore Rare Earths welcomes Alaska State Initiative to Support Bokan Metallurgical Research

HALIFAX, NOVA SCOTIA--(Marketwire - Sept. 25, 2012) - Ucore Rare Metals Inc. (TSX VENTURE:UCU)(OTCQX:UURAF) ("Ucore" or "the Company") is pleased to report that the Mineral Industry Research Laboratory of the University of Alaska Fairbanks ("UAF" or "the University") has been awarded $297,000 by the Alaska Department of Commerce, Community and Economic Development.
UAF will be conducting research with respect to the processing and extracting of rare earth element-bearing minerals from ore material sourced from Ucore's Bokan Mountain deposit. The University will also conduct research on the procedure for the handling of waste rock. These specific process refinements will further enhance metallurgical testing carried out by Ucore. The announcement of this funding highlights the active role of the State of Alaska in the development of its enormous rare earth mineral potential.

"We're extremely pleased to have the University of Alaska Fairbanks team involved with the Bokan Mountain project," said Jim McKenzie, President and CEO of Ucore. "We welcome the opportunity to work with a very skilled and mining-experienced research staff at UAF, accessing the advanced human and technical resources available at that facility.

"UAF is the home of the College of Engineering and Mines," continued McKenzie. "That institution has provided immeasurable support to mine design projects throughout the state, expediting and improving both ore extraction and processing methodologies. UAF research involvement should also be indispensable as we advance into pilot scale testing in 2013. We'd additionally like to take this opportunity to thank Governor Parnell's office for its involvement in this initiative and for the ongoing support of the Bokan Mountain Heavy Rare Earth Project by the State of Alaska."

About Ucore Rare Metals Inc.

Ucore Rare Metals Inc. is a well-funded development-phase mining company focused on establishing rare metal resources with near term production potential. With multiple projects across North America, Ucore's primary focus is the 100% owned Bokan - Dotson Ridge REE property in Alaska. The Bokan - Dotson ridge REE project is located 60 km southwest of Ketchikan, Alaska and 140 km northwest of Prince Rupert, British Columbia and has direct ocean access to the western seaboard and the Pacific Rim, a significant advantage in developing near term production facilities and limiting the capital costs associated with mine construction.

The Bokan property is particularly enriched with heavy rare earth elements, including the critical elements Dysprosium, Terbium and Yttrium. Approximately 40% (by weight) of the rare earth elements contained on the Dotson Ridge property are heavy rare earths elements, as disclosed in the Company's NI 43-101 compliant resource estimate, released in March of 2011.

Jim McKenzie, President and CEO

FOR FURTHER INFORMATION PLEASE CONTACT:

Mr. Jim McKenzie
Ucore Rare Metals Inc.
President and Chief Executive Officer
(902) 482-5214
www.ucore.com

Related articles

• Scientist and inventor joins Ucore Rare Metals
• State taps UAF to research rare minerals
• Brandon Tirpak: China's Stockpile Effort Could Stabilize Rare Earth Metals (MCP, LYC, QRM, AVL, REMX)
• The astounding rise of western rare earth extraction: Jack Lifton

TNR Gold increases Rare Earth holdings in Canada.

TNR Gold Corp.
TSX VENTURE: TNR

Mar 01, 2011 08:30 ET

TNR Gold Corp.: Seabrook Ree Carbonatite Acquired; Sault Ste. Marie, Ontario

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 1, 2011) - TNR Gold Corp. ("TNR" or the "Company") (TSX VENTURE:TNR) is pleased to announce the acquisition of 100% ownership interest in the Seabrook Rare Earth Element Carbonatite Complex in northern Ontario (the "Property") through a combination of staking and option.
Key Highlights:

• 100% ownership and coverage of the Seabrook Carbonatite Complex;
• Significant REE potential indicated from previous operators' limited exploration;
• 4 grab samples grading 0.6, 1.5, 4.7 and 10.3% Nb₂O₅; and
• One sample grading 0.47% Ce₂O₅ and 0.22% La₂O₃ where only the Ce and La were analyzed for.

"The Seabrook Carbonatite Complex represents a significant addition to TNR's Rare Earth Elements property portfolio that also includes

Junior and Mid Tier Rare and Minor Metals Companies December Quarter 2010

Dec 01, 2010 06:00 ET

Resource Capital Research Report:

DENVER, CO--(Marketwire - December 1, 2010) -
Key Points

• Rare and minor metals (RMM) company share prices have climbed in the past three months (+56%), outperforming the ASX S&P 300 Metals and Mining Index (+12%), due to potential future metal shortages and price rises. Some recent gains were fueled by market speculation rather than fundamentals.
   
  
• The current market driver is China's policy of squeezing export quotas and raising tariffs, especially for the rare earth elements (REE).
   
  
• As we stated in 3Q10, demand for the RMM should increase in the next 4-5 years, which could benefit current and near-term producers, or exploration and development companies with projects that can be fast-tracked.
  

Resource Capital Research ("RCR"), an equity research company which focuses on small and mid size resource companies, today published its quarterly research report covering Rare and Minor Metals exploration, development and production companies.

The report covers TSX/V listed companies: Avalon Rare Metals Inc, Rodinia Lithium Inc.  Tnr Gold Corp. and ASX listed companies: Alkane Exploration Limited, Arafura Resources Limited, Globe Metals & Mining Limited, Greenland Minerals & Energy Limited, Gippsland Limited, Gunson Resources Limited, Galaxy Resources Limited, Icon Resources Limited, King Island Scheelite Limited.

RCR also publishes quarterly reviews of the Iron Ore, Uranium, Gold and Copper sectors. To access the free summary of the Rare and Minor Metals Report or to purchase the 56 page Subscribers report, go to www.rcresearch.com.au/reports.

The outlook for rare and minor metals


The past three months have seen considerable share price gains for some rare and minor metals (RMM) equities, as investors become aware of the potential for future supply shortages and consequent high metal prices. Speculation has cooled in the past month, but companies that have quality projects should retain some of their recent gains while prices remain above their pre-2H10 levels.

The main market driver is China, which is reforming its RMM sectors, by raising tariffs, reducing export quotas, and encouraging consolidation and vertical integration of production. China's stated aims are to increase domestic value-adding and use of the RMM, conserve resources, and improve industry monitoring and efficiency. China's actions could boost global RMM production.

Some examples of commodities with a stable to strong outlook for the next several years:

• Lithium: Increasing intensity of use is expected to require additional supply beyond 2014.
  
  
• Niobium: Industry forecasts are for FeNb consumption growth of ~15% per annum to 2014.
  
  
• Rare earth elements (REE): Forecasts are for 20-30% CAGR in prices to 2015. Export prices (China) up 510% year-on-year.
  
  
• Tantalum: A supply shortfall is expected to hand a competitive advantage to companies that provide a long-term supply of ethically produced tantalum.
  
  
• Tungsten: Supply shortages are indicated from 2013.
  
  
• Zircon/zirconium: A lack of greenfields projects could create supply shortages and boost prices in the near to medium term (1-3 yrs).
  

RMM deposits can take 5+ years to develop as mines, sometimes due to their geochemical complexity, and the challenge of financing projects that are considered to be outside the resources mainstream. This provides an opportunity for companies with projects that are advanced or can be fast-tracked, e.g. due to location, favorable chemistry, size and/or high grades.

Equity performances
Globally, RMM stocks have outperformed most exchange-based indices in the past 12 months. Share price performances have been studied, for 336 exchange-listed companies with one or more RMM projects (in six commodity groups: lithium, REE, tungsten, zirconium, niobium, tantalum). The unweighted average performance over 1 month (to November 17) was +11%, compared to 1% for Australia's ASX S&P300 Metals and Mining Index, and 0.1% for the ASX All Ords. Twelve-month performance was +56% (S&P300 MM, 12%). The average RMM company share price is 33% below its 12-month high and 155% above a 12-month low.

Analyst's Comment
"The past twelve months have overall been very strong for rare and minor metals markets," says RCR analyst Trent Allen. "The basket of stocks we looked at had an average share price increase of 56% over that period, beating most share market indices. This frenetic activity has raised the profile of rare and minor metals, which could help with future investment and project finance."

"As is so often the case with commodities, the force driving the market is Chinese policy. It's always difficult to be certain of China's intentions, so cuts in metal export quotas and talk of limiting production created a lot of uncertainty in 2010. This was compounded by China's willingness to use its dominant market position to gain political leverage, as shown by mention of the rare earth elements in recent trade and territorial disputes with Japan and the US.

"RCR recently attended the Sixth International Rare Earths Conference, organized by Roskill and Metal Events in Hong Kong, to try to gain a clearer picture of China's position on the RMM. It is apparently seeking to conserve mineral resources and add value to them in China, while simultaneously regulating its mining and metals industries to combat problems such as overcapacity, environmental damage and smuggling of high-value metals.

"This realization among investors, together with assurances from China about continue supply (again, focused on the REE), has taken some of the speculative heat out of RMM equities in the past month or so. RMM prices are unlikely to fall across the board for the foreseeable future, so long as fundamental market drivers remain in place, and companies with solid projects should on average retain the majority of their recent share price gains in the near to medium term.

"There should be opportunities for investors to profit from high-quality new RMM discoveries or from significant advances at existing projects, especially in terms of mineral processing and project funding."

About Resource Capital Research
Resource Capital Research ("RCR") (www.rcresearch.com.au) was founded in 2004 and is based in Sydney. RCR provides investors with in-depth reports on current investment opportunities in the mining sector both in Australia and globally. The focus is on small and mid cap resource companies, within the iron ore, uranium, gold, copper and rare/minor metals sectors, ranging from exploration stage, through development and production. John Wilson, the principal of the firm and analyst, has over ten years' experience analysing mining companies in Sydney and on Wall Street including for major investment banks. Dr. Trent Allen, Rare and Minor Metals Analyst, joined RCR in 2006. Trent has extensive experience as a mine geologist, academic and journalist.
The report is available at www.rcresearch.com.au. The next Rare and Minor Metals Company Review will be of the March Quarter, 2011.
For further information please contact:

Trent Allen
Rare and Minor Metals Analyst
(+61 (0) 438 873 682)

John Wilson
Managing Director

Resource Capital Research,
Phone: (+61- 2) 9252 9405

Related articles

• UPDATE 1-Avalon Rare Metals looks to list on NYSE Amex (reuters.com)
• US reserves of rare earth elements assessed for first time (newscientist.com)