RE:Derisked rare earth junior ?Sorry for the post presentation. It was not like this on my screen...
Moulouk
Moulouk wrote: In the recent weeks, all rare earth juniors went up and down, mostly based on the trade war threat involving China and the USA. It seems that all juniors went up, even though, in my opinion, not all of them are equals.
Among them, one little unknown rare earth junior is very different than the others. Different because investing in GMA means investing in a derisked rare earth junior on the verge of production. Here are the reasons why GMA is different and why I feel GMA is derisked:
1) separation technology: no one in Canada can separate the REE elements. All REE company think that they can send their REE concentrate to China and then resell the rare earth oxide to the end users. All except GMA. GMA developed the technology in the last 5 years and will be the first REE producer in ...2020.
2) Green technology: separation of REE elements is done by solvent extraction in China because it is very, very very damaging to the environment. Most governments have banned SX on their territories. Radioactive waste can also be created. GMA developed a green technology. No issues with pollution or radio active waste such as thorium.
3) CAPEX and OPEX: most REE juniors expect to be able to raise between $500M to $1b with 20 millions market cap in order to build a mine. No wonder most of them did not advance their 43-101 reports in the last five years in order to come closer to production...GMA needs $2 millions to build it's demonstration plant that will be paid in ... 1 year.
4) Cash flow: most REE juniors will have to wait very long to build a mine. GMA will be a REE producer in 2020 and will start generate cash flow.
5) Urban mining: GMA will get its feeds from the ... waste and will recycle REE materials that it wished. Instead of building a mine and wait for so many years, GMA will be the first outside of China to recycle REE materials which will be available close to...now. Urban mining means no need for costly 43-101 reports (PEA, PFS and FS) in order to be ready to think about starting a mine. How much money cost these 3 reports altogether? 50 millions? more? GMA does not need any reports to recycle what is considered as waste by many.
6) REE selection. Not all REE elements are equals. Cerium is not worth as much as Neodymium. Rare earth magnets are now very popular. The beauty of urban mining is that GMA can choose its feeds. Why wasting its money and efforts on low value feeds? GMA has met potential partners and can decide which feeds to work with;
7) Mining or not mining? GMA has decided to get cash flow before mining. Did I mention that GMA has one of the biggest property with the biggest value in Canada (or in the world)? And yet, it will urban mine before mining in a traditional way? And why: because it can generate cash flow and avoid dilution!
8) Share float: generating cash flow means less dilution right. But what is the share floats of the REE juniors ? GMA has close to 90 millions shares outstanding. Please check the other juniors...
9) 22% shareholder of KTR: GMA holds 22% of the shares of KTR, a public issuers, traditional mining company with a huge cobalt property. What is the value of this investment alone? I am sure that I missed a lot of points and I invite posters to mention other derisked factors for GMA.
One thing remain though: how many time can you invest in an (almost) unknown juniors, with a revolutionary technology, that will get cash flow within a year, a green company and that is derisked as GMA is? I have never used these words for a company, but I feel that we may well soon use the word GEM when describing Geomega.
Moulouk