The turn in auto sales, and acceleration in EV sales has us thinking it is time to add to our REE positions. REE have been crushed after the flush by the speculators running for the hills. But that move was over done and inventories are dropping once again.
Technically today $MCP triggered a "buy if" for us. And so depending on price action, we may add for a trade over the next two days.
And yet we are concerned.
We see the future with REE is all about the heavies. And both MCP and Lynas are ...well...light on all but the lights. So our fav REE play remains the junior UCore ($UURAF), which just got a great PEA on its Bokan Mt, which has the full support of the DOD and Alaska, and is the best US located HREE play. Now with the PEA, they will need to do a major raise, so that is keeping a lid on the price. But our read is it is just a matter of time before $MCP, with it's bags of money and access to lower cost of capital swoops in an buys out UCore just to get at it's Bokan Mt site.
The UCore PEA was attractive even though it was based on a 10% cost of capital. $MCP as an operator with cash on the book to burn, has a near zero cost of capital, making this deal a steal. Of course as the $FCX deal shows today, their are many big time miners that might be willing to take a shot with UCore.