June 20, 2019 Alex Sekella
Rare earth elements like scandium, neodymium, and dysprosium are used in numerous products like smartphones, electric car motors, wind turbines, satellites and jet engines. These 17 prized metals are looking to be China’s biggest bargaining chip in winning the trade war and offer a great investment opportunity.
Our team has uncovered a company that is poised to benefit from the current situation and believe this is stock is set to surge. Chinese rare earth prices are set to climb further beyond multi-year highs. Demand is forecast to increase all while an embargo can cut off much of the needed supply creating an ideal situation for those this company.
Big Threats and Big Consequences
China Supplies at least 95% of the world’s rare earths and the escalating trade war between the two superpowers presents an opportunity for investors. The key role these minerals play in many products means China could strike a heavy blow against the US. On May 29th the official newspaper of the Chinese Communist Party made their third threat“The U.S. must not underestimate the ability of the Chinese side to hit back”
The US is extremely dependant on critical mineral imports and many experts believe they will move forward with an embargo. If China was to stop exports to the US for a long period of time it could cause a huge shock to the entire US economy.
The national security concerns are enormous and the government is searching for solutions. With this move China can effectively shoot-down the entire F-35 stealth fighter production program, missile systems and satellite development.
The US is looking elsewhere for supply
Increasing trade with allies and partners will help reduce the likelihood of disruption to critical mineral supply chains. The US has a historical trade relationship and geographic proximity with Canada and experts believe that supply chains will be shifted over the next 12 months.
Just this month the US laid out a federal strategy to ensure secure and reliable supplies of Critical Minerals that mentioned Canada as a key supply option.
Defense Metals is a mineral exploration company focused on the acquisition of mineral deposits containing metals and elements commonly used in the electric power market, military, national security and the production of green energy technologies, such as high-strength alloys and rare earth magnets.
The company is able to capitalize on the current marco changes in the Rare Earth market through their Wicheeda Property in British Columbia. The Wicheeda Property consists of 6 mineral claims covering an area of 1,780 hectares, located approximately 80 km northwest of the city of Prince George, British Columbia.
The company recently received a 5yr exploration permit (in May 2019) for the Wicheeda property which includes approval for up to 51 drill site locations. The company had $800k at the end of 2018 and is now very well cashed up upon completion of a $1million dollar Private Placement.
Drilling will commence this summer which means many potential catalysts that can drive the stock price up.
2 specific rare earth minerals Monazite and Bastnasite-Parisite with 60% of the REE contained in Monazite and 40% in Bastnasite-ParisiteResults from a recent 30 tonne bulk sample include 1.77% lanthanum-oxide, 2.34% cerium-oxide, 0.52% neodymium-oxide, and 0.18% praseodymium-oxide which the Company considers potentially economically significant, for a total of 4.81% LREO (light rare-earth oxide)Extensive local infrastructure – Roads, Railway, Water, Power, Natural Gas and Labour
There are 23.75M shares outstanding and currently insiders and friendlies hold roughly 75% or 18mm shares. The float of this stock is very small coming in at only 6 million meaning that this stock is susceptible to large gains.
The growth potential in Rare Earths in North America can lead to profits for investors looking to take advantage of the Macro effects of the Trade War. DEFN has a proven asset base, large resource and major exploration program already underway. This stock’s small $3.8 million dollar market capitalization has the potential to skyrocket.