Visualizing Rare Earth Projects

Today we are releasing our beta version of Data Visuals for Rare Earth projects. For the first time, investors and industry professionals can instantly find what projects and companies have the best Dysprosium distribution, the highest Neodymium contribution to “basket value”, the most meaningful “heavy rare earths” credentials and countless other potentially important considerations. These Data Visuals can be found here. We’ll be building more charts for Rare Earths in the weeks ahead as we incorporate cost and development factors so please keep checking back.

If you like what you see and would like to encourage us to keep improving and adding to these visualizations, please consider subscribing. We would also ask the you use the social icons below the title of this post to spread the word about these Rare Earth Data Visuals. There is nothing like them out there … but this is just the beginning!

We’ve also developed Data Visuals for royalty companies and royalty projects and there will be many more charts for royalties in the future as well. But the next major project we are starting is the conversion of our gold and silver mining database into this same Data Visual format. We’ll be sharing updates on gold and silver producers with Metal Augmentor subscribers as we progress.

One of the most compelling things about these interactive visualizations is that they can be used to model what-if scenarios (for now mainly by varying the individual rare earth oxide prices) and create custom peer groupings. This visual manipulation and juxtaposition of information can instantly communicate a fundamental understanding or insight that might not be apparent from the raw data itself. For example, you might not recognize that Lynas Corp’s Mt. Weld “light rare earth” deposit actually has very high raw Dysprosium and Terbium grades (these are arguably the two most critical and truly valuable of the rare earth elements). But after you sort the top chart on Dysprosium or Terbium in this Data Visual it becomes instantly apparent as shown below:

When we shared the above Data Visual with several “heavy rare earth” companies, they were universally surprised to see Mt. Weld so high for Dysprosium, Terbium and several other “heavy” rare earths (on the basis of published grade distribution, does not reflect January 18, 2012 resource update). It should be noted that Great Western Minerals’ Steenkampskraal project has a presumptively higher raw Dysprosium and Terbium grade but this deposit is not included in our model because it lacks a 43-101 or otherwise compliant resource estimate at this time.

With these Data Visuals, it is very easy to see the relative importance and meaningful differences in rare earth grades and distribution of all the advanced rare earth deposits. It should be noted that in this initial version of the visual model, all results are driven simply off the individual and total rare earth oxide grades along with several preset price assumptions. You can select either the global resource (all categories combined) or a default resource representing the most-likely portion of the compliant resource to be mined (typically Measured & Indicated resources, if defined, but sometimes a specific zone that is near surface or higher grade as specified in a technical report on the project). Most of the charts allow filtering and grouping of projects or individual rare earth elements to create a custom analysis or peer comparison. Future visuals will allow the user to select specific resource categories and even cutoff grades for each project and also to input his or her own preferred price for each rare earth oxide (or metal as the case may be).

Despite the data simplicity, a significant amount of research, information collection and programming has gone into creating these Data Visuals. We are making these basic visuals available for free mainly because we believe that visualizing complex relationships using charts and graphs will help to educate and provide additional perspective for investors and industry players in the rare earths space. Rational markets are predicated on the availability of information upon which rational decisions are to be made. And we like rational markets.

Being first-and-foremost investors ourselves, we are particularly interested in using these Data Visuals to identify companies that could find a place either as dominant or niche players in the sector. A Data Visual such as the following can quickly pinpoint the companies with projects that have the highest concentration of the 5 “critical” rare earth elements as identified by the U.S. Department of Energy:

Of the 6 companies with projects where the 5 “critical” rare earth elements account for more than 80% of the total distribution value (using current prices and the global resource for each deposit), two projects are quite small and two others have a rare earth (“Critical 5″) price per tonne that will necessitate a low mining and processing cost (thus increasing risk). One other project is very remote and will require significant infrastructure to be built, leaving just one project out of this “Critical 5″ group (all considered “heavy rare earth” projects) that may just have the best combination of “Critical 5″ rare earth distribution, size and development potential.

We’ll probably be adding this “mystery” company (and perhaps one other that we uncovered using these initial Data Visuals) to our Metal Augmentor Diversified Rare Earths Basket on Collective2 as well as to our own investment portfolios and accounts. Please note that Metal Augmentor subscribers have free access to our independently verified portfolios maintained on the Collective2 platform and they will be hearing from us about the rare earth companies with the most potential — as indicated by the Data Visuals or otherwise.

We should mention as well that although the current Data Visuals require a bit of tinkering with assumptions plus a smidgen of analyzing in order to come up with the potential gems, upcoming charts will include much more information including project and development factors, production cost assumptions, company market caps and other information that will make the top prospects as obvious as the charts are beautiful (at least to info junkies like us).

Future visuals are also likely to include the impact of by-product credits, the ability to use custom pricing and an option to categorize projects by various type (e.g., carbonate vs. silicate), scope (e.g., production size), production considerations (e.g., thorium levels) and other factors. Some basic charts will be available for free but the complete version of these and other Data Visuals will be accessible only by Metal Augmentor subscribers. Custom visuals and the ability to place branded charts or graphs on company websites will be made available to Institutional clients (please contact us for details).

We hope you enjoy playing around with these interactive visualizations. They are meant for experimentation so don’t be afraid of breaking anything! If you ever get stuck and need to start over, just click on that little refresh icon at the bottom of each chart or reload the page in your browser. The more time you spend with these visuals and the ones to come, the better flow and feel you’ll develop for the sector … even if you’re not initially aware of the deeper understanding that you’ve gained. Yes, it’s basically yoga for business and investments.

Disclaimer:  We own shares in several of the companies mentioned in this analysis, but no compensation has been received from any of the companies mentioned. If you’d like to get access to our portfolios and track exactly what we’re buying and selling, when and how much of each, you’ll need to subscribe. This is not investment advice; should you seek investment advice we recommend you discuss the company with a licensed investment advisor or broker.