• Access To Financings
  • Transparent
  • Innovative
  • Well-Connected

Tips om Rare Earth, Dacha Minerals, V.DSM

Innan vi startade OBR så bloggade jag regelbundet på svensk blogg om våra bolag och ditt och datt. Glädjande nog så har vi nu fått på plats en motsvarande lösning även via vår hemsida. Tanken är att skriva om allt möjligt. Idag tänkte jag börja med en intressant möjlighet som vi ser i marknaden. De som följer vårt skrivande vet att vi inte är så förtjusta i för små bolag som inte har produktion, s.k förhoppningsbolag. Detta huvudskälet till att vi haft svårt att ta till oss den s.k rare earth sektorn av metaller. De flesta bolagen där med undantag av Lynas och Molycorp är åratal från produktion. Till det kommer att produktion inte heller är nog… man måste också på trovärdigt sätt (utanför Kina) kunna processa koncentratet vilket i princip handlar om att renodla och dela upp de olika rare earth sorterna man utvunnit i klump. Mycket komplicerat, mycket dyrt.

Sedan så är det så att vi ser inte en glimrande framtid i alla rare earth metaller. S.k lätta rare earth metaller finns enormt mycket av i Kina medans det tunga kan Kina t.om vara nettoimportör av 2015. Så vi är inte så sugna på produktion av “fel rare earth” eller ens bolag med klump av mängd olika REE.

Vad vi kan se så kommer Lynas och Molycorp på pappret innebära att en katastrofal utbudssituation 2011 kommer förändras till mer balans under 2012 och 2013. MEN, detta gäller främst lätta REE vilket vi inte är intresserade av.

Fokus ska ligga på de tunga REE såsom Dysprosium, Terbium och Europium.

Idealiskt vore alltså ett bolag som till 100% ska producera dessa och som kommer i produktion snart. Något sådant finns inte och kommer inte finnas.

MEN, det finns ett bolag som har i princip 100% exponering mot just dessa intressanta delarna av tunga REE, uppdelat och klart… som en ETF med Dysprosium, Terbium och Europium… och den handlas med kraftig kraftig rabatt på substansvärdet idag!

Bolaget är ett systerbolag till Avion som heter DACHA MINERALS (Senaste presentation) och som helt enkelt köpt på sig stora mängder av de REE där dom ser att utbuds vs efterfrågesituationen kommer vara gynnsam kommande år. Dvs de där kineserna inte har enorma mängder och de där Molycorp och Lynas är svaga samtidigt som efterfrågan är stark.

Varför har vi en kraftig rabatt? Vårt svar är en rejäl marknadsimperfektion av den typen vi älskar. Kina producerar 99% av dessa metaller och mullrar intensivt om att skära ner exporten pga egna behov. Detta skickade priserna på metallerna brant upp, men sen kom jordbävningen i Japan som är en stor REE konsument. Reuters artikel den 15e mars började spekulera i prisras. På Lynas hemsida kan man dock se att priserna på de metaller som Dacha har, snarast har ökat ytterligare 2-4% under jordbävningsveckan. Kineserna verkar m a o inte alls ha planer på sänkta priser på de metaller man själva har mest ont om.

Dachas substansvärde var precis före jordbävningen 58 cent/aktie. Kursen stängde igår på 36 cent. 38% substansrabatt för något som i vårt tycke borde ha en premiumvärdering m a o…

Nedan följer lite för den som vill följa de beräkningar och källor vi använt:

Här är Dacha´s uppdatering av substansvärdet 14e mars:

Vad vi gjort är att vi tittat på värdet man satt på Dysprosium samt Terbium och dividerat med antal KG för att få kg-priset man använt:

Här är Lynas hemsida med mer aktuella priser (vi tittade per 21 mars)

Här är den felaktiga (?) bild vi tror marknaden har, Reuters 15 mars:

Här är en Reuters artikel per 22 mars som med begränsat djup (kom ihåg vad vi skrev om att skilja på olika REE) hänt 2011 på denna marknad.

Resource investor har här en lite äldre men intressant artikel på “vårt” ämne.

Ytterligare en intressant artikel: “China may eventually need to import the materials . . . There’s a strong possibility of importing heavy rare earths in the next three to four years,” stated Liu Junhua,deputy secretary for Baotou Rare Earth High-Tech Industrial Development Zone Committee. He added that China has increased its consumption ofrare earths by 200 percent over the last 12 months. If another substantial cut is made to export quotas, look for the WTO to weigh inon the subject.”

Avslutningsvis skulle vi vilja ge Kinas syn på läget:

BEIJING, March 7 (Xinhua) — China is willing to cooperate with Japan in developing alternatives of rare earth, Commerce Minister Chen Deming said here Monday.

“At the current pace of rare earth use, it will not take long before the world’s reserves go depleted. We hope to work with Japan and other countries to find alternative materials or recycled way of use,” Chen told a press conference.

China has tightened the exploration of rare earth, which is a key raw material in producing electrical products but will cause heavy pollution during its development process.

As the world’s largest rare earth producer and exporter, China provides more than 90 percent of global rare earth demand, though its reserves account for only one-third of the world’s total.

“China faces huge environmental pressure. We hope other countries could understand our measures to reduce the quota for both domestic and overseas consumers,” he said.

China announced its first batch of 2011 rare earth export quotas at 14,446 tonnes at the end of 2010. The full-year quotas are under discussion.

China exported 35,000 tonnes of rare earth from January to November last year, up 14.5 percent from a year earlier. Exports to Japan, the European Union and the United States accounted for 86 percent of the total, according to the Ministry of Commerce.

Federal Reserve Official: ‘We Have Done a Bit too Much’ QE

The Telegraph, March 22

The Federal Reserve has “done a bit too much” quantitative easing amid signs “of speculative excess” in the the US, according to a senior official at the central bank.


The Fed will continue with its $600bn programme of quantitative easing

Richard Fisher, who heads the Dallas branch of the Fed, said that the world’s biggest economy is no longer in need of further stimulus and the real question is when to begin tightening monetary policy. To embark on a third round of quantitative easing (QE) would “only prolong the injustice inflicted” on savers through inflation, Mr Fisher said.

The Fed started a second, $600bn (367bn pounds) round of QE in November in an effort to ward off the threat of deflation and ignite a recovery that has made little dent in unemployment. The move sparked criticism outside the US that it would fuel inflation, while domestic opponents argued it threatened to debase the dollar.

Mr Fisher, who become a voting member of the Fed’s rate-setting committee this year, said in a speech in Frankfurt that “there’s lots of liquidity sloshing around the US financial system. We are seeing signs of all the intoxication that typically takes place when we have the ambrosia of cheap and readily available capital.”

The current round of QE will see the Fed purchase about $600bn of US government debt from financial institutions in the hope that the proceeds are then lent and invested in the wider economy. Ben Bernanke, the Fed chairman, has staunchly defended the plan, arguing that when it began the recovery was in danger of losing significant momentum.

The blitz of fresh stimulus for the economy, which Congress added to with an extension of a tax cut in December, has prompted Wall Street economists to pencil in higher gross domestic product this year.

Mr Fisher said he would have voted against further QE if he had been making a decision in November.

Source

GoldMoney. The best way to buy gold & silver

Miners Soak up Gold Rally and Rising Costs

Reuters, March 22

For gold miners, it could be a case of more money, more problems.

Producers of the precious metal are the most obvious beneficiaries of the 30 percent rally in the precious metal’s price over the past 12 months, but those miners are taking pains to prove to governments that their profits are not that glittering.

Gold prices have raced to their highest ever, touching $1,444.40 an ounce this month as investors snap up the currency safe haven as global inflation fears rise and instability spreads across the Middle East.

Governments from Australia, Chile, the U.S. state of Nevada and the Canadian province of Quebec have passed or considered increases in their royalties on gold produced by companies such as Barrick Gold and Newmont Mining.

Executives told the Reuters Global Mining and Steel Summit they have made a case to governments that the costs to tap into gold deposits have skyrocketed in recent years, so their profit margins are not rising with the metal’s price.

“When I sit down with governments, I say the headline is gold prices are up, but behind the headlines you need to understand costs are up and capital numbers are up as well,” Newmont CEO Richard O’Brien said.

Costs to find, finance and produce gold are probably between $900 and $950 per ounce, he said.

“That’s even before we pay taxes,” O’Brien said. “We’re making a profit and we’re not going to complain about it, nor are going to shirk our commitments to the communities. But don’t think that gold prices are at $1,400 and costs are at $350. That’s not where we are anymore.”

Still, gross profit margins at most gold companies did increase in 2010 from 2009, according to data provided by RBC Capital Markets, and are likely to continue to widen over the next year or two.

SEEK TAX DISCIPLINE

The move to increase governments’ share of the gold revenues has occurred worldwide but still forces companies to carefully consider where they will put new mines, according to Greg Hawkins, CEO of African Barrick Gold.

“It’s a tough one. Once you’ve started a mine, you can’t move it … so you are a little bit hostage to changes in the rules,” he said.

Mining companies want to make sure that tax policy-makers are disciplined in how they make royalty changes, he said, and are aware of the large amounts of capital that companies pour into new projects.

He praised the East African nation of Tanzania, whose recent moved to raise royalty rates to 4 percent from 3 percent was applied only to new projects.

Still, part of the issue around rising costs is caused by the high price itself, according to Toronto-based Agnico Eagle Mines, as miners have the incentive to chase lower-quality ores that produce less gold.

“In a high gold price environment, when companies do their annual reserve calculation, they lower the cut-off on what becomes economic and what becomes waste. And that lowers (ore) grade, which raises unit costs,” Chief Executive Sean Boyd said.

Still, even with the sky-high price, the industry faces ever more daunting prospects in tapping more difficult deposits that are straining its ability to produce gold.

“Unless we have a technical breakthrough … we’re going to see a business that is in long-term decline,” Newmont’s O’Brien said.

Source

GoldMoney. The best way to buy gold & silver

UK Inflation in Shock Jump to 4.4% and Borrowing Rises

The Telegraph, March 22

British inflation jumped to a shock 28-month high of 4.4% and public borrowing recorded its worst February since records began last month, official data showed on Tuesday.


The surprise rise will worry the Bank of England which has been battling to bring inflation back to its 2% target.

The news will be a blow for George Osborne as he puts the final touches to his 2011 Budget on Wednesday.

February’s surprise rise will worry the Bank of England which has been battling to bring inflation back to its 2% target. Sterling rose sharply against the dollar to $1.6380 on expectations that interest rates will rise sooner rather than later.

The Office for National Statistics said the worse than expected rise in consumer price inflation was driven by higher housing costs, domestic heating bills and clothing prices.

On Monday an Institute for Fiscal Studies (IFS) report revealed that the average British household’s “real” income – what is coming in after inflation is taken into account – will have fallen by 1.6% over the three years to the end of 2011.

CPI rose to 4.4% in February, up from 4% in January. Economist had forecast a rise to 4.2%. Retail price inflation (RPI), which is based on a longer-running index and is used as a starting point for many wage negotiations, rose to 5.5% from 5.1%, its highest since July 1991.

Mervyn King, the Governor of the Bank of England, has said that the January VAT rise and other inflationary pressures meant that prices would likely outstrip pay again this year, leaving real wages no higher than they were six years ago. Not since the Depression-hit 1920s has a fall of such scale taken place, said the central banker.

The ONS said that public sector net borrowing totalled £10.3bn in February, up from £8.12bn for the same month in 2010 and well above economists’ median forecasts of £8bn.

The government’s preferred measure, PSNB excluding financial sector interventions, rose to £11.8bn. Both measures were the highest for a month of February since records began in 1993.

The figures mark a sharp turnaround from January, due to an unwinding of the exceptional receipts for self-assessed income tax received in that month.

For the financial year to date, PSNB-ex totals £123.5bn compared to £136.6bn at the same point in the 2009/10 fiscal year.

Only one month now remains of the 2010/11 fiscal year, in which the government expects to borrow £148.5bn – equivalent to 10% of GDP – down from £156.5bn in the 2009/10 fiscal year.

The government plans to virtually elininate the budget deficit over the next four years.

Source

GoldMoney. The best way to buy gold & silver

Copper and Silver Look for Long Term Gains on Japan and China

Commodity Online, March 21

Copper and silver markets are all set to enter into a highly volatile arena as fresh Japanese demand will conflict with that of already heightened Chinese demand apart from steady improvements in North America and Europe.

Analysts said strong copper and silver demand from China and other emerging countries and improved demand from North America and Europe have all resulted in a very tight global market for these commodities.

Japan, which is trying to recover from the devastated quake, will require huge quantities of copper for residential and commercial purposes apart from its already high demand for manufacturing sector.

Japan is expected to start recovery works soon and reconstruction and refurbishing of damaged plants, buildings and infrastructure should lead to greater commodity consumption, particularly building materials, analysts added.

Japan needs to replace damaged power lines in quake hit regions and also needs transformer replacements for which copper and silver are to be used along aluminum, zinc and nickel.

Copper prices began moving upwards after initial demand drops pushed prices down. In London copper prices edged up 0.4 percent Monday, with investors wary of placing big bets after a weekend of airstrikes by Western powers on Libya.

Japan may stop refined copper exports to China following the quake and resultant high demand back home though March shipments have nearly been completed.

Japan might forced to stop shipments for April though copper due to leave to China in April has been stored in warehouses in ports in western Japan which was not affected by the quake and tsunami.

Japan last year supplied 253,157 tons of refined copper to China, the largest consumer, or 8.7 percent of Chinese imports.

China’s tightening of monetary policies also helped copper to move up though prices in Shanghai fell 0.5 percent to 71,480 yuan a ton on Monday.

Silver on the other hand moved up along gold by safe-haven buying after U.N.-backed attacks on Libyan military targets over the weekend.

Spot silver was tracking gold, at $35.70 an ounce, up 42 cents although an early attempt to breach $36 failed.

Analysts said the extent of the military action appears to have taken some market participants by surprise but helped metals not only as a safe haven asset but also as an inflation hedge.

Source

GoldMoney. The best way to buy gold & silver