Avalon Advanced Materials Inc T.AVL

from Cannacord tonight

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AVALON RARE METALS (T-AVL) $3.17 -0.03

QUEST URANIUM (V-QUC) $2.45 +0.01

MATAMEC EXPLORATIONS (V-MAT) $0.21 +0.01

PEREGRINE DIAMONDS (T-PGD) $2.90 +0.06

Yikes! While it still tends to be a good market out there

in general, there is one sector that was the highest flying

previously that had some rewards that were like winning

the lottery that has been hit by a funk over the last couple

of weeks. So we go back to about the only two people that

were even aware of them when the excitement started. We

are talking about rare earths and Jim Letourneau of the Big

Picture Speculator and John Kaiser of the Bottom Fishing

Report.

As we say, we go back to them because they were suggesting

these kinds of stocks while most analysts didn’t

even know what the heck a rare earth was?

In a newsletter out today, Letourneau keys in on the rare

earth plays and writes, “The rare earth playbook is in the

public domain. In 2002, The US Geological Survey published

and Open File Report by Greta Orris and Richard

Grauch. Rare Earth Element Mines, Deposits, and Occurrence

provides a nice summary of the known rare earth

deposits. If you look through the deposits you’ll quickly

find out that most of them have been picked up by a small

list of rare earth juniors.”

Letourneau continues, “Commerce Resources (CCE)

was especially diligent in picking up properties off the

USGS spreadsheet. Rare Element Resources (REE) just

acquired the Eden Lake rare earth elements project from

VMS Ventures Inc.”

He continues, “One of the superstar rare earth stocks

this month has been Quest Uranium on the back of successful

exploration at Strange Lake.” He suggests, “If you like

Quest then you might also like Midland Exploration (MD).

Letourneau continues, “The other rare earth activity

centre in Quebec lies along the Kipawa syenite belt where

Unocal explored for rare earth’s in the late 1980’s. Their

most advanced project was picked up by Matamec Exploration.”

Meanwhile, we caught up with John Kaiser just about to

catch a plane, where he is off to Washington where he will

be one of the featured speakers at the Critical Materials

Conference. As to whether this big correction in some of

the leading stocks in the sector is something to worry

about, he is not worried at all, suggesting “it’s just a correction

and maybe some have taken profits from rare

earths and gone to gold’s” but he points out that this sector

is not a bubble, but a pullback that he suspects is going

to let new audience participate in what he believes is going

to be a very important sector of the mining business.

He is also pretty adamant that some rather significant

players haven’t even caught onto it yet and he points out

that very few institutions own any of these stories yet, but

he wouldn’t be surprised if in the next 6-12 months, they

become significant players.

In case he hasn’t beaten it into us enough or thinks we

are a slow learner, he reiterate “Big money doesn’t even

know about rare earth yet.” Course John is still one to joke

about rare earths, having been the first one to start covering

it, calling it Weird Metals, Exotic Metals or you-name-it.

But with China controlling almost 95% of the supply and

suddenly turning off the tap on that supply, we hope they

are right that momentum is just starting to build.

Meanwhile, Kaiser is telling us that he is getting lots of

inquiries around the world from different mining players of

different sizes. If you are a big miner and your business is

mining, does it really matter whether it’s gold, copper or

rare metals that you are in the process of mining.

Which gets us to our favorite question of course….Okay

John, if you could only buy two stocks today, what would

they be? His answer is immediate. Number one is Quest

Uranium (notice the chart) it definitely has had a correction

and his second is Peregrine Diamonds, one that he had mentioned

here before and has become a five-bagger since and

suggests that Peregrine has a pile of news coming out over

the next six weeks.

We own some of both and after today’s visits with these

two guys, we buy some MAT.