Post by
javaman12 on Jul 14, 2024 1:18am
Have Made A Good Contact With Rush Rare Metal's CEO!
Peter Smith, CEO of Rush Rare Metals is one well informed guy and a good spokesman for the company!
He is also keen to get any valuable feedback from his shareholders to which he will gladly respond.
His commentary is most insightful!
He believes that the market is not giving the company a proper valuation!
And in my opinion, yesterday's significant low volume sell-off, emphasizes this point that he made to me! We shareholders need to focus on this matter more!
And the cost structure for the company's exploration effort, really does matter too!
Thus, the avoidance of any excessive share dilution does appear to be a matter of some relevance involving the company's future strategy for growth!
The Boxi property located in Quebec is simply a secondary company play that costs the company virtually nothing to explore.
Its main property holding lies with its share of the joint venture investment in the Copper Mountain Uranium property in the US state of Wyoming.
It is already a well advanced prospect that will continue to grow in size when Myriad Uranium finally begins its major exploration effort with all of the necessary infill and step out drilling that needs to be done!
They are presently studying all of the historical data before making the best decision about where to drill their confirmation holes and where to drill much deeper, where they expect to find, the higher and more substantial, better grades of uranium ore!
And they may also be trying, first to raise a little more cash!
That joint venture partnership with Myriad, at this time, costs Rush Rare Metals, absolutely nothing!
Myriad Uranium is paying that cost! Read the option agreement when making your investment decisions!
Later on in the joint venture after a preliminary economic assessment has been made, new negotations may transform the agreement to gain better advantage for either party as future circumstances dictate at that time!
Those kind of discussions and legal agreements play a normal part of any satisfactory joint venture deal so both parties may benefit longer term!
The first J/V agreement was a preliminary deal made prior to any later major discovery that may be made by Myriad.
Future discussions folowing a PEA may change this deal as long as both parties remain satisfied with the terms of any new agreement.
Rush's CEO has been trying to get the company's best message out to the market!
But he may have to make use of a more convincing argument or use a better platform of communication to compete with other companies in the junior exploration space!
Perhaps he could help explain the companies future plans is a simpler way?
He has told me that it his intention to do a better job in his future stock promotion efforts!
In my opinion, much of the market's available investment cash has been playing an apparently safer game by buying into a higher tech investment strategy.
But that pyramid building strategy may burn some of those unsuspecting participants, sooner than they might expect!
Other available less glamorous options may offer investors, equally good investment value, especially when a fickle market has for the longest time, just ignored them!
Sometimes a better investment opportunity appears at most unexpected times!
And closer to the top of any economic cycle, commodity stocks, historically do well!
But before that top is reached, sometimes market bubbles do, savagely appear!
And a house built with cards that appear to be all made with aces, can fall pretty fast!
When one of the main supporting structures, starts to slip away, what is more likely to happen then?
When that highest priced company, no longer offers that continuing promise for more rapid growth, down it can fall!
And a whole deck of cards used to construct such a house, offering that same 'never ending promise', can fall almost, equally fast, when one such major company, most dramatically, fatefully disappoints, an unsuspecting market!
We may be several months or years from such a possible economic calamity, so why not consider a good investment in the commodity sector when this timing is best!
Unlike bubbles in market economic cycles, the demand for energy, never will end, when it is clean!
And nuclear power offers that low carbon foot-print that reactors can offer to sell.
To run them properly, a more appropriate fuel is needed to burn!
So more uranium will soon be needed as more technically advanced reactors come on stream.
Their designs are changing by getting better in safety and sometimes smaller in size.
And many potential employees may transition their jobs easily from an older and dirtier energy source to a cleaner one, by making a contribution to a better and more stable environment, in one bold sweep with this major step forward!
That does offer some appeal to investors who want to stand proud by doing the right thing!
Rush Rare Metals doesn't build nuclear reactors, high tech chips or build complicated AI software platforms.
Little of that AI drama, runs this game!
As the competition for dollars in this lower tech, rare earths/uranium exploration space has lately become, so very fierce, one company's investment opportunity does need to stand out in front of a crowd!
It may not actually be significantly better than many other offerings that the market could buy. But it does need to be marketed as one of the best!
Myriad will also, most likely, bear the major cost of that kind of marketing plan!
Shareholders will be waiting to see how each company's managers do perform. Which company's exploration efforts and spending plans will yield their shareholders, the better return?
I received some commentary from the CEO to an e-mail inquiry that I sent him immediately after seeing a very disappointing collapse in our company's share price on Friday.
Was the recent press release, none too auspicious for our company's future? Was the apparent recent exploration failure at Boxi accompanied by the dramatic share price drop, representative of some inevitable fateful outcome for all of Rush's, present day shareholders?
Is the share price seeking a much lower bottom?
This sounds a little too histrionic and I didn't state that kind of ridiculous drama to him in any way!
But in any event, I did send a e-mail seeking some guidance about what may be happening here.
A wiser Peter Smith told me to relax and reflect upon what the company has been doing to increase its shareholder value without spending hardly any significant amount of exploration dollars at all!
The company is acting as a smart money manager of its shareholder's investment dollars by spending only a little of their cash on hand.
He is aware that the recent exploration efforts at the company's Boxi property did appear to be somewhat disappointing!
So he mentioned that the company's efforts there cost very little!
And there may be a silver lining associated with many of the lower grades found at Boxi! This box may not be nearly as empty as many believe!
That lining may also offer up value even if most of the contents at first glance may have appeared to be worthless.
The contents appear to be uneconomic lower grades. But the silver lining may be the higher grade ore if it is mixed in proper proportions with the contents that appear to be low.
And a drop in each bucket becomes a lot when the bucket is full after first becoming, more golden!
It may be possible to mine these lower grade resources economically, wherever the higher grade 'pocket' mineralization structures, happen to be found!
And many of these higher grade structures have been located at multiple locations on the boxi dyke!
A good average grade might make for an acceptable mining prospect, especially when it is located, outcropped on the surface!
Wouldn't that be a cheaper option to mine?
An open pit is always a preferable mining operation to run! Imagine many such pits with a similar metallurgy located all along a dyke that runs for some many km in length!
And what might be the prospect of still finding some greater find in the future when so much of the dyke still remains to be stripped and sampled for grade?
Is this just some fantastic notion or a real company prospect? That is a matter that management must also address.
At least some preliminary bulk samples, should settle this matter! But it may take more than one to better decern this truth!
However, does the success of this one, much smaller, Quebec based endeavour, really matter so much to make Rush Rare Metals, a most successful company?
Why should the Boxi exploration endeavour decide this company's future financial success, when it is the Copper Mountain prospect, where the company remains, so primarily focused?
Myriad pays for all of the exploration costs at Copper Mountain while Rush Rare Metals, only has to sit and wait until that project becomes more commercial in scope!
In my opinion, the rest of their exploration activity is a sideline duty that just keeps management busy and possibly more active and productive. One needs to always hone their skills!
We all need something useful to do with the rest of our available and valuable time!
I made a few suggestions to management. Though they could probably promote their story, at least a little better, maybe they could also make some other property acquistions too?
They may have some idle time on their hands. Why not now?
But operating their company on behalf of their shareholders, remains a future course of action, best left up to them!
They know their business and how to protect all of their shareholder's investment dollars, better than me!
Here is what I wrote to Peter Smith, the company CEO, in response to an earlier e-mail that he sent me:
"Peter:
Since a market cap of 10 million dollars would put us at around the present market value of Myriad Uranium, your opinion about what the present value of Rush Rare Metals, really should be, seems to reflect your idea that both companies are heavily undervalued by the market!
I do note that Rush's present joint venture agreement permits Myriad to purchase 100% of the Copper Mountain project from Rush at fair market value, once having acquired at least 50% of the project.
Of course additional private placements made by Rush would make the future value of such any such transaction less valuable to present day Rush shareholders.
But in any case, like you said, the potential upside for Rush shareholders, should be substantially higher than this minimum figure that you mentioned.
Would the company consider distributing this purchase amount as a one-time dividend to shareholders (in the form of cash or Myriad shares) if this happens at that time?
Or would the company choose to invest its new capital by making another exploratory investment in an additional rare earths property? Would this kind of move reward its shareholders better?
If Myriad chooses not to purchase Rush's 50% or 25% ownership of the Copper Mountain project, after it achieves commercial production, might Rush consider spinning out its position in the Copper Mountain project as a secondary holding for their shareholders at that time?
Rush Rare Metals could continue exploring other rare earth possibilities at other locations, as an independent and distinct company from the one holding a position in the Copper Mountain mine.
By offering a lower amount of shares available to the market via a reverse split (say 5 or 10 million shares), many fewer shares than the company offers the market today, a newer Rush Rare Metals, could make many more, future private placements. Then share price dilution might be considered, less important for present day shareholders, as the most important consideration, in helping to decide, when to sell.
And with rare earths, there will remain much exploratory excitement in this arena for many more years to come!
The present joint venture agreement gives Rush Rare Metals, 50% of the first 50 million dollars of profit, from Copper Mountain's commercial operations, even if Rush retains only a 25% ownership.
This seems like a pretty sweet deal to me!
25 million bucks would help provide a good financial base with which to help any company grow its share of Copper Mountain's future exploration and mining operations!
Any such decision made now and publically announced about how Rush Rare Metals might proceed in this manner, could certainly provide some present day, financial inducement for investors to buy a few more, additional shares.
When a few sellers exited the company yesterday (quickly dropping the share price by over 20%), they were narrowly focused on the 'Boxi' property and were not properly evaluating the entire company's assets. They may regret their short-sighted action, in the future!
This has given an immediate opportunity for any new potential shareholders to buy into Rush Rare Metals at an extremely, cheap valuation!
But the possibility of any special and substantial distribution paid out to shareholders in the future might provide some extra, tantalizing reason to stay invested here, longer term.
Share price volatility should be expected in the exploration sector. But when there are no guarantees about future discoveries, then it might be prove to be better to provide some extra inducement, for today's shareholders, to keep their shares!
With respect to your Quebec property, like you say, the discovery of many extremely, high grade 'pockets' of mineralization found throughout the dyke, could make the find of larger amounts of anomalous lower grade samples, in multiple potential ore bodies, a more meaningful depositional environment, for any future rare earth or uranium mining at this site!
Starting more immediately with some bulk sampling (only two or three tonnes at a time) around these higher grade 'pockets', sounds like a good exploration approach to me! And do determine the best processing method with the unique kind of metallurgy, that's involved here.
That kind of expense will remain a smaller one for the company to make.
Keep investigating your 'Boxi' property for any commercial value, since this doesn't seem to cost the company any significant amount of cash!
This lengthy dyke, has many more, near term surface possibilities, remaining to explore!
And for now, like you say, it might be best to remain committed to your lower, dollar cost approach, about any future mining of that property! Keep Exploring that open pit potential!
It's not anywhere as nearly advanced as the Copper Mountain project!
But for now, as an exploration opportunity, it remains a good idea, worthy of excellent merit!
While Myriad pays for all of the present day exploration expenses at Copper Mountain, continue to explore at your Boxi property in Quebec, for virtually nothing!
Good for you! And good luck in getting all of your message out to the market!
I am sure that you will find the means. Many don't seem to get it yet!"
I just offered up a couple of ideas that any random shareholder, might also choose to support!
But that doesn't make them anything special or particularly relevant to our company's future financial success!
The company's management makes all final investment decisions, about where to best place, their longer term bets!
Keep that in mind too!
All the best! Java