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Exploring the World of Rare Earth Metals
By Glenn Wilkins
August 8, 2007 (AllPennyStocks.com Media Inc.) – More
common metals such as gold, silver, iron, zinc, lead and
copper are well-documented in financial pages such as this,
and for good reason. But let’s focus for a moment or so on the
lesser-known rare earth metals, those materials with many
applications in our daily lives, investing in whose makers can
boost the portfolios of those with an eye for value.
Molybdenum is a transition metal that does not react with
oxygen or water at room temperature. The ability of molybdenum
to withstand extreme temperatures without significantly
expanding or softening make it useful in applications that
involve intense heat, such as aircraft parts, electrical
contacts, industrial motors, and filaments.
One company hard
at finding and developing molybdenum is British Columbia-based
United Bolero Development Corp.
(TSX Venture: UNB),
which trades on the TSX Venture under the symbol UNB. Besides
its mining enterprises, United had also been busy in the oil
patch, but scaled back those activities by the end of 2005, to
focus almost exclusively on being a junior mineral exploration
company.
UNB currently has options to purchase 100% interests in two
properties in southwestern Montana. One of them, the Bald
Butte property, has 22 patented claims comprising about 350
acres. Mining there began in June of this year. The deposit at
Bald Butte shows an inferred resource of 105 million tons at a
high grade of molybdenum.
Another property,
elsewhere in the state, has been subject to previous
explorations by other companies that have proven rich in
molybdenite property.
The burgeoning market for molybdenum should be good news for
those looking to snap up potentially strong stocks at low
prices. UNB fortunes tailed off a bit from its 52-week peak
over the 90-cent Canadian mark during May. At the beginning of
August, the stock sat around 60 cents. While out of its
20-cent gully from this time last year, UNB is still very
affordable.
Rare earth metals such as lithium are in higher demand, due to
the exploding market for hybrid cars. Neodynium is also
enjoying a surge for its place in the hybrid car market.
Lithium ion is a key component in rechargeable batteries while
neodymium is used to make the super magnets integral to hybrid
and electric car technology.
All this is good news for such rare earth metal producers as
Toronto-based Avalon Ventures Ltd.
(TSX Venture: AVL).
Avalon, whose shares trade on the TSX Venture under the symbol
AVL, focuses on metals in increasing demand in high technology
and environment-friendly applications, including lithium and
neodynium, as well as calcium feldspar and beryllium, the
latter of which can be used in copper alloys found in
electronic products.
Avalon owns five rare metals and mineral projects in Canada,
three of them in advanced development. Its Separation Rapids
project in northwestern Ontario is hard at work producing
lithium, while the Warren Township property, in northeastern
Ontario, specializes in calcium feldspar. Its Thor Lake
beryllium project, in the Northwest Territories, is home to a
high-grade beryllium silicate mineral.
AVL enjoyed a leap in net revenues in fiscal year 2006 to
$87,588 Canadian from $414 the year before. Total assets
experienced a 50%-plus hike to $6.9 million. AVL stock prices
have achieved a five-year peak of $2.21 Canadian in July,
after plumbing to a 52-week low of 70 cents Canadian last
fall.
Tungsten, though not widely known, is prized for a hardness
ranking behind only diamonds, world-leading heat resistance
density (greater than lead or uranium) and
environmentally-friendly qualities; it neither breaks down nor
decomposes.
Tungsten is found in sporting goods (most notably golf clubs
and sports fishing weights), jet turbine engines, light bulb
filaments and high-speed cutting tools.
Vancouver-based North American Tungsten Corporation Ltd.
(TSX Venture: NTC),
trading on the TSX Venture under the symbol NTC , is a Tier
One junior resource company engaging in mining, developing and
acquiring tungsten and other mineral-related properties in
Canada. Its 100%-owned Cantung mine and Mactung development
project in the Northwest and Yukon Territories make it one of
the few tungsten producers with a strategic asset in the
western world.
Production in recent months has taken off for NTC, jumping 20%
from March to April of this year to a record 30,000 metric
tonnes of tungsten concentrate. Unaudited sales figures came
in for the first three quarters of fiscal 2007 at nearly $40
million U.S., compared to $45.1 million for all of fiscal
2006.
North American Tungsten reported $51.4 million in revenues at
the end of fiscal 2006, a quantum leap from the $158,000 the
previous year. NTC stock traded in early August in the $1.35
Canadian range, creating a new 52-week peak, and a far cry
from 50-cent Canadian ditch in which it found itself last
November.
Simply put, the bargains are out there. Companies like the
ones just mentioned are avidly seeking to bring these metals
to the surface and make them part of our lives.
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