Here are some responses from GWG staff at the recent Cambridge Conference.

http://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=28315805&l=0&r=0&s=GWG&t=LIST

Alex,

I think that your comment indicates that you understand how I look at the situation quite well. In fact the extension or renewal of the mining permit is the essential first step in the development or re-development of the Steenkampskraal property. However, as you see, there are many more steps to the process not the least of which is adequate financing. I am optimistic that GWMG will move forward, but I am holding off praise a little while longer so that some key questions about the necessary steps for Steenkampskraal to be of value can be answered. GWMG’s “mine to market’ strategy is perhaps today the only rare earth strategy involving a junior miner that makes any financial sense on its own. Selling that strategy to long term investors requires detailed answers to questions about metallurgy, costs, processing locations, and end-use customers. I await those answers eagerly.

Thanks for being a careful reader.

Jack

Hopefully it will pick up in the future.

As to Lynas’ review of REE prices, may I suggest that they have no idea what they’re talking about.

Mr. Jim Dines (and yes, he is a newsletter/stock promoter) recently released for the first time price charts for four REEs in RMB, and one can see that Cerium, the fairly abundant LREE, has risen in price since the fall of ‘09 by over 140%. Mr. Kaiser has confirmed that the current REE prices are much higher than the 4 year average used by Wardrop.

So, anyone who states that REE prices have dropped or are not rising dramatically, has no idea what they are talking about.

Mr. Lifton, I believe an analysis of all recent news and Dr. Chen’s white paper that you published on the rare earth blog are the clearest indicators of the price direction of REEs. And I believe all of those combined sources indicate that the price movements are going to be significantly northward, above and beyond the rapid price increases that have occured since late ‘09.

Best.

Look at the econoomics of the situation: If “prices” have only gone up 20% since 1979, then when those prices are normalized for inflation they have fallen dramatically. You see that the dollar today is worth only about 1/3 of its 1970 value in terms of purchasing power as calculated by the US Dept of Commerce.

Note that the all time high for gold in 1980 was $850(1980) per troy ounce, which today is more than $2300(1980) per troy ounce, so gold has fallen dramatically in purchase price.

In fact I said that Chinese production volumes and business practices in the rare earth sector from the beginning have led to internal competition within China that has kept prices artifically low. The consolidation will now eventually cause prices to rise by eliminating that competition against regulated enterprises by rogue enterprises that do not pay the costs of labor, taxes, safety and health.

I doubt very much whether Lynas fails to understand that as Loqucite seems to. I note that Lynas shares have fallen sharply since it was financed indicating a long road ahead to production even for a company with a good deposit, a metallurgy said to be done, and a separation plant under construction. The rare earth mining business is a complex entity not subject to simplistic analysis by day traders. There is a reason that China Nonferrous Mining Company made a substantial offer for Lynas. That reason was that Chinese companies and bankers place a positive value on security of supply, which is something that western bankers, so far, do not do. Lynas is certainly one of the best chances for western independence of China for light rare earths. Time and economics will determine whether or not Lynas is successful.

I will no longer comment on anything Loquacite says, and I will no longer allow ad hominem attacks, even by me, on this web site. Those of you who wish to engage in rational debate please continue.

Despite Mr. Lifton’s lyricism, I would much sooner believe Lynas, who is the world leader in this business, no doubt bringing to bear a team of analysts and other professionals who have studied this space for years or decades.

For those of you who think Jack Lifton is confused, may I suggest that he is even more confused than you.

If I understand it somewhat, it is that China has no secret plan to screw the world out of rare earths. Any supply constraints will simply be the result of the fact that China is cleaning its act up.

And regardless, these polluters have been driving REE prices artificially low for years, so obviously for margins to be proper in a “consolidated” industry, these prices are going to have to rise.

Am I on target here?