Another Update On Stans Energy

After the huge run up in Stans Energy, I would like to take time to review the investment and its future prospects. Back in June I took a position in Stans and so far it has done well thanks to investor excitement surrounding the rare earths sector. This is certainly a welcome development, but the only thing that matters is what happens next.

I think the next major catalyst for Stans Energy is the release of their JORC resource estimate. The number is expected soon (within the month) and will finally confirm the Soviet's historical estimate of the size of the deposit. There is a good chance the number will be considerably higher than the historical resource due to the drilling of the Aktyuz ore field, situated  near Stans' flagship property Kutessay II. The Aktyuz ore field has similar geology to Kutessay II and more importantly is double the size, which leaves open the possibility of Stans Energy dramatically increasing their resource. This would be an important development for shareholders as a larger resource substantially improves the economics of the mining operation.

Once the company completes a JORC estimate, the next catalyst will likely be the announcement of an off-take/financing agreement with a major user of rare earths. The company noted that it has already been approached by interested parties. This step will help de-risk the project and show the investment community that the company can finance the development of the mine without massive dilution to shareholders, which is always the fear for development stage companies.

Overall, I still think Stans Energy is attractive compared to other rare earth companies based on valuation. I am going to continue to hold shares despite the large run up in price over the last few weeks.

Black Swan Insights

Related Articles:
My investment in Stans Energy
Update On Stans Energy
China's Plan To Use Rare Earths As A Weapon

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This is not a reccomendation to buy or sell the stock. I am not an investment advisor and nothing on this site should be interpreted as investment advice. Please consult with your own financial advisor before investing in the stock market or any financial asset. This blog and its author is not responsible or liable for any misstatements and/or losses you might sustain from the content provided.


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