Dear Reader, It’s taken some time… But given the recent correction in resource stocks…the sell-off in rare earths…and a recent announcement from Tesla… …our marquee mining play for the next few years hit the buy zone. If you’ve been waiting to get into what I’ve labelled the ‘Son of Fortescue’…now’s your chance! This is one of my highest conviction trades in 2023 so far. It’s an Aussie mining firm with the same vision and grand plan that Fortescue Mining Group had 20 years ago…gunning for dominance in a critical metal that’s set to triple in demand by 2035. It’s recently been bogged down by wider selling in the sector. This has given you a rare opening. A 10% discount on where it was just a short while back. You may not get this opportunity again… Why should you buy any stock if the sector has had a big set-back? No matter how brilliant its potential might be? Some quick background… At its much anticipated ‘investor day’ presentation in Texas recently, Tesla revealed that it was looking to remove rare earth metals from its next-generation vehicles. The market viewed this as a big deal in terms of the outlook for REEs… You see, neodymium and praseodymium (NdPr) are two REEs used in permanent magnets for electric vehicles (EVs). At first glance, Tesla’s announcement puts a major dent in the demand outlook. But dig a little deeper, and things are nowhere near as bad for rare earths as casual investors are assuming… If you’ve read my research in the last few weeks, you’ll know that…from this exploration geologist’s perspective… …pretty much zero has changed in the long-term demand/supply story for critical metals. Investors are acting like frightened sheep…as they often do…and that’s your ‘in’. Opportunities like the ‘Son of Fortescue’ will become exceedingly rare as momentum for critical metals builds. Tesla’s shock announcement for the REE industry is one of those scarce openings to pick up a producer holding a key commodity for the future…but trading at a significant discount. Keeping your eyes firmly fixed on the long-term demand and supply fundamentals will be your key to capitalising on rare breaks like this. See, Son of Fortescue’s key metal is instrumental to both the green energy transition and military technology — making it a priority for national security. In fact, Reuters reported ‘an urgent push by Washington to secure domestic supply of the minerals used to make military weapons and electronics’. The bigger concern is that China holds 90% of the global supply…thus putting Australian producers like the ‘Son of Fortescue’ in a strategic position to supply the rest of the world. And while there may be some further price volatility in the current environment, I believe the recent sell-off is a rare opening to pick up this stock at a significant discount. But I think you should get in ASAP. You can learn more about this stock in my briefing. Access it here. Regards, James Cooper, Editor, Diggers and Drillers |