Yesterday, when the announcement was made, RUU slipped 7.8% on the TSX Venture Exchange (CVE). Obviously traders were not excited by the news and the disclosed figures. Instead, their reaction was negative.
It is interesting to note that the stock had jumped 12% up one day before the release was made known to the public. As a whole, RUU has been progressing lately, gaining 24% over the last week. Nevertheless, the shares still remain far enough from the year-high of $3.4 that was noted in early February.
The company’s directors, however, can only be pleased by the recent developments around Stans Energy. Stans has made another important step towards its ultimate goal – to commence production at the Kutessay II open pit mine in Kyrgyzstan.
Yesterday, the company announced the successful completion of Kutessay technical report, compliant with Australian Joint Ore Reserves Committee (JORC). The mineral resource estimate was prepared with the help of Kazakhstan Mineral Company.
The report indicates a combined Measured and Indicated mineral resource of almost 43 000 metric tonnes (mt) rare earth oxides (RE2O3), at an average grade of 0.264%, plus an additional Inferred Mineral Resource of 3 560 mt RE2O3.
There are other factors that speak in favor of Stans and, respectfully, in favor of the share performance. The company operates in the hot rare-earth sector. Rare metals (REE) became even more attractive after China, the country producing over 95% of REE worldwide, decided to reduce its REE export quotas in 2011.
In addition, the commence of production on Kutessay is already seen on the horizon. As Reuters News informed today, the president of Stans expects a small-scale production to begin in 18 months, and larger-scale production – in about 24 to 30 months.
We can only wait to see whether this will really happen, or the company’s President has been a little too optimistic. The future will show.
