Rare Earth Weekly

The global rare earth industry is experiencing rare earth prices deterioration which has exacerbated declines in revenues, earnings and share prices of junior minors. Molycorp (MCP), with its heavy concentration of light rare earths ("LREE"), experienced price declines of 30% quarter-over-quarter. The price deterioration does not seem to be abating anytime soon. According to the Motley Fool, it's a wonder that some junior minors are even still in business:

The price of common rare-earth minerals has been dropping since 2011, the year rare earth prices peaked, which is why revenue is slipping. It's a wonder at this point that miners without production, like Rare Element Resources (REE) and Avalon Rare Metals (AVL), are still in business at all. If Molycorp can't make money now that it's in full production, then how could there be enough demand to support all of these companies?

And with new developments such as the vast rare earth oxides found in the Pacific seaboard by Japan last week and in Jamaican mud in January, the supply/demand dynamics may drive prices lower in the future.

Here is an update of junior minors' trading multiples since our last comparable rare earth industry analysis, which includes Molycorp, Lynas Corporation (LYSDY.PK), Avalon, Rare Element, Arafura Resources (ARAFF.PK), Quest Rare Metals (QRM), Great Western Minerals (GWMGF.PK), Montero Mining & Exploration (MXTRF.OB), Frontier Rare Earths (FREFF.PK), Tasman (TAS), Ucore ( ) Hudson Resources (HUDRF.PK), and Matamec Explorations (MHREF.OB).
 

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