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Your 3rd Chance to Grab Rare Earth Profits:
Profit from a “Heavyweight” Rare Earth Exploration Company — Right Here in the U.S.!

Now that I’ve explained the basics of rare earths, it’s time to throwmore opportunities into the investment ball-and-rod mill. Because thereare really two kinds of rare earths. In fact, there are two entirelydifferent markets for rare earths.

There are the “light” and “heavy” rare earths. The distinction isbased on the atomic numbers of the elements (see numbers below thechemical symbols in the image below).

The light rare earths range from lanthanum (La) to gadolinium (Gd).Then, with some overlap, the heavy rare earths range from samarium (Sm)to lutetium (Lu). As I mentioned, samarium, europium and gadolinium areviewed as falling in both camps.

Light rare earths are fairly abundant in terms of volumes. The marketdrivers for the light elements are mostly in the field of magnets.Think in terms of neodymium, going into those big windmill magnets tothe tune of 500 pounds each.

Heavy rare earths are far less abundant in terms of volumes. Themarket drivers for heavy rare earths are more in electronics. Think interms of a fraction of an ounce of material going into the chips andother electronic circuitry in your cell phone or in a small medicaldevice.

The chemical distinctions, let alone the market forces, are prettyhairy within the industry. What it means to us as investors, however, isthat we need to look for companies with ore bodies that are rich inheavy rare earths. For all of their respective virtues, Lynas and U.S.based Molycorp have lots of light rare earths and not so much in the wayof heavy rare earths.

So is there is a company out there with control over heavy rare earth bodies?

I’m glad you asked, because yes, there is — the company is Ucore Rare Metals (UCU: TSX-V).

Profit from this “Heavyweight” Rare Earth Explorer

Ucore Rare Metals is an exploration company. Its flagship property is at Bokan Mountain, Alaska.

Ucore shares trade on the Toronto Venture Exchange. The company usedto be called “Ucore Uranium,” but management recently changed the name.Why? The Bokan Mountain, Alaska, claim is the site of a prolific formeruranium mine from the Cold War. Thing is, the uranium mine also holdslarge amounts of rare earths, including heavy rare earths.

Indeed, the old uranium mine is what makes this new rare earths playso intriguing. If Ucore controlled a hunk of undeveloped rock out in themiddle of the Alaska forest, I might not be interested. But Ucorecontrols a set of claims with serious mining development andinfrastructure already in place.

So why change the name? Management wanted to move attention away fromthe uranium side of things and focus more on the rare earths in theportfolio. Fair enough.

An Amazing Find, Hidden Right in Our Own Back Yard…

Just as the Molycorp Mountain Pass site was discovered by uraniumprospectors looking for ore, so goes the history of Bokan Mountain. Backin 1955, a couple of prospectors were flying over Prince of WalesIsland in a Piper Cub airplane. They were towing a “Nucliometer” behindthem, a souped-up Geiger counter device that measures radioactivity.

When the prospectors crossed over Bokan Mountain, in the midst of theTongass National Forest, the nuclear readings began to go through theroof. These prospectors knew that they had found something, and in thosedays it meant that the Atomic Energy Commission (AEC) moved in fast toexploit the resource.

By 1957, there was a permitted uranium mine up and running. Since itwas all happening in the Tongass National Forest, there were few humanbeings to get in the way, protest or otherwise interfere with things.Between 1957–71, the Mt. Bokan site became home to the Ross-Adams Mine,which produced over 1.3 million pounds of uranium yellowcake.

To produce that amount of product, the mining firm built out anextensive system of heavy-duty mining roads, along with a pier facility.It’s all still there, southwest across the water from today’s fishingand cruise ship port of Ketchikan, Alaska.

The uranium mine closed in 1971, and nothing much else happened forquite a while. There was a modest amount of regional geological work inthe 1970s and 1980s by the U.S. Bureau of Mines.

Geological Studies

On a broad scale, in the 1980s, the geological community figured outthat Prince of Wales Island is part of what’s called the “Alexanderterrane” of Alaska. “Terrane” is a plate tectonics concept. It meansthat the rock bodies we’re looking at formed far to the south, and inCretaceous time were transported north, to collide with the NorthAmerican continent.

Alaskan geology is very complex, and the terrane concept adds to thedifficulty of deciphering the past. What we’re left with, in this MountBokan area, is a wide variety of exotic mineral deposits — really, it’syears beyond the stuff you learn in Geology 101. It’s much more like agraduate-level course in mineralogy and geochemistry. The bottom line isthat, when people looked closely, they determined that Mount Bokan isunusually rich in the heavy rare earths.

The rare earths are mostly hosted in volcanic rocks called andesite,via coarse-grained pegmatites that form intrusive dikes around MountBokan. Thus, there are strong structural controls that make explorationmore systematic. The original magmas probably came from deep within thevolatile and rich upper mantle and cooled from molten rocks thatoriginated in the deep crust. So when I say “rare” earths, I mean reallyrare minerals.

At Mount Bokan, rare earths mineralization is associated withelevated uranium, as well as thorium levels. This makes radiometricsurveys very successful in identifying new sites of rare earthsmineralization.

In the late 1980s, the U.S. Geological Survey published aneye-catching estimate of rare earths resources: nearly 374 millionpounds of combined yttrium and rare earths oxide (note that it’s NOTcompliant with current rules for Canadian National Instrument 43–101).Still, the rough U.S. government work indicated that in addition to itsproven uranium resource, Mount Bokan may be among the largest heavy rareearths deposits in the U.S.

Where to Go From Here?

In 2006, Ucore Uranium acquired the claim. Now Ucore is in the driver’s seat, with no title issues.

Just with uranium alone, Ucore may be sitting on top of over 11million pounds of potential yellowcake. As for the rare earths, there’sno solid estimate yet, because the company is in the midst of a drillingand assaying program.

There’s a fair degree of certainty, however, that there’s somethingsignificant out there at Mount Bokan. But as with many old sites, thearea hasn’t ever been systematically or comprehensively explored withmodern chemical and geophysical techniques and technologies. Really,there’s been no significant mining or capital investment there foralmost 40 years.

Still, we know that there’s a proven ore body at Mount Bokan, withuranium and rare earths that have been identified and investigated tosome extent. Plus, there’s an extensive historical database containingprevious exploration and mining data.

Just from the first pass of new exploration and assaying, there aremultiple prospects and multiple ore commodities at Mount Bokan, of bothuranium and rare earths. The place has existing infrastructure andimprovements, which leads to near-term production potential. And it’slocated in a part of Alaska that’s mining friendly. That is, this formermine site is specifically set aside for resource development and thereare no residential or indigenous populations in proximity.

The Ucore Story

Ucore has some very good people on its management and technical team,so right away it’s got a leg up. Take this great ore body in a knownmining district with historical production. Add a group of people whoknow what they’re doing. And where can this company go? In a world whererare earths are about to become hot commodities, Ucore could be a greatupstream play.

What are the risks? You mean, aside from being a rare earths play,and all the other issues I’ve discussed before with other companies? I’dlike to see Ucore more cashed up, but that probably means diluting thecurrent shareholders. I’d also like to see any new cash go for fasterprogress with drilling results and assays. Right now, I’m not entirelysure that the company has the financial depth to do everything it’lltake to make the Mount Bokan program work.

So why look at Ucore? Because of the ore body. Because of the mininghistory. Because of location, location and location. Because in thecoming rare earths crunch, I can see Ucore teaming up with a larger,better-capitalized firm. Meanwhile, I believe that Ucore has a good rareearths story to tell and it can keep delivering good results until theright partner comes along.

Don’t chase this stock. But accumulate a position. Get on board.Something good ought to come down the road, and sooner, rather thanlater.

Action to take: Buy Ucore Rare Metals (UCU: TSX-V).

Stay Tuned for Future Updates On these Rare Earth Companies and Fresh New Profit Opportunities…

I’ll be consistently monitoring the companies listed in this reportand staying on top of any new information. As news surfaces I’ll keepyou posted through email alerts.

Stay tuned for more information PLUS exciting new opportunities to profit from energy and natural resources.

That’s all for now. Thanks for reading.

Byron King
Editor, Energy & Scarcity Investor

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