As a result of the trade war between the U.S and China we have unearthed some rare earth stocks that could benefit from this political uncertainty
SmallCapPower | May 23, 2019: Rare earth metals are a category of 17 chemical elements in the periodic table that include scandium, yttrium and 15 lanthanides. These metals and alloys are used in the production of rechargeable batteries, magnets, cell phones, computer hard drives, guided missiles, flat screen monitors and, radiology equipment. Since the late 1990s, China has provided 80% of the rare earth metals imported by the United States (Bloomberg, 2019). Recently, companies that offer rare earth metals in China have soared after Chinese President Xi Jinping visited one of the country’s rare earth companies. This has led to speculation that the government plans to use this sector in the Sino-U.S. trade war to retaliate against President Trump’s threat to stop supplying chips and processors to Huawei Technologies Co. Today we have identified four Canada-listed rare earth stocks poised to power higher on U.S. China tariff dispute uncertainty.
*Share prices as at close May 21, 2019, data obtained from S&P Capital IQ
Neo Performance Materials Inc (TSX:NEO) – $11.70
Specialty Chemicals
Neo Performance Materials is a Canada-based company that processes rare earth metals. The Company manufactures and distributes a broad range of light and heavy rare earth engineered products. The Company’s activity is divided into three main business segments: the Magnequench Segment; a Chemicals & Oxides Segment; and a Rare Metals Segment. On May 13, 2019, Neo Performance announced its first-quarter 2019 financial results. These results featured revenue of $108.5 M, and net income of $12.2 M, or $0.31 per share.
- Market Cap: $459.0 Million
- YTD Return: -24.0%
- 30 Day Average Trading Volume: 55,000
- 90 Day Average Trading Volume: 102,000
Commerce Resources Corp. (TSXV:CCE) – $0.07
Diversified Metals and Mining
Commerce Resources is a Canada-based mining company that focuses on acquiring, exploring, developing and evaluating mineral resource properties. The Company mines carbonatite-hosted deposits of rare-earth elements, tantalum and niobium deposits. Commerce Resources has a 100% interest in the Eldor property, including 244 claims that extend over about 11,475 hectares located in Quebec, and has a property called Blue River situated in British Columbia. On May 15, 2019, the Company announced it has signed a Letter of Intent (LOI) with Nayumivik Landholding Corporation of Kuujjuaq and the Makivik Corporation for the current development of the Ashram Rare Earth Element Deposit in Nunavik, northern Quebec. The LOI will allow the Inuit to be directly involved in discussions and planning of the project.
- Market Cap: $21.7 Million
- YTD Return: +27.3%
- 30 Day Average Trading Volume: 128,000
- 90 Day Average Trading Volume: 87,000
Ucore Rare Metals Inc. (TSXV:UCU) – $0.16
Diversified Metals and Mining
Ucore Rare Metals is headquartered in Halifax, Canada and explores for rare earth elements in Canada and the U.S. The Company holds 100% of the land in the Bokan Mountain/ Dotson Ridge property located on Prince of Wales Island, Alaska. Ucore announced that it had issued a Notice of Commencement on February 14, 2019, to purchase IBC Advanced Technologies. Additionally, on April 2, 2019, the Company announced it had entered into a secured loan agreement with Orca Holdings, LLC for $3.6M. The loan will be used for working capital purposes and to resolve any short-term amounts owing to Orca over the next six months.
- Market Cap: $45.3 Million
- YTD Return: +39.1%
- 30 Day Average Trading Volume: 166,000
- 90 Day Average Trading Volume: 133,000
Canada Rare Earth Corporation (TSXV:LL) – $0.08
Diversified Metals and Mining
Canada Rare Earth is engaged in developing rare earth properties in Canada. The Company is currently developing four properties. First, is the Company’s Red Wine project, which is located approximately 160 kilometers northwest of Happy Valley-Goose Bay, Newfoundland. Second, is the Clay-Howells property located 45 kilometers north-northeast of Kapuskasing, Ontario. Third, the Coldwell Complex project is located in the Coldwell Alkaline Complex in northern Ontario. The last development is the Hinton Coal property located over 305 kilometers west of Edmonton, Alberta. Canada Rare Earth mined products include High-Purity Rare Earth Oxides, Rare Earth Fluorides and Larger Particle/Nano RE Oxides.
- Market Cap: $16.0 Million
- YTD Return: 125%
- 30 Day Average Trading Volume: 144,000
- 90 Day Average Trading Volume: 85,000
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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