3 Reasons To Buy Ucore Rare Metals Now, Not Later

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Ucore Rare Metals Inc(UCU.V) / (UURAF) has released a plethora of good news since early March, yet the stock price is virtually unchanged, at $0.35. But up from 30% from early May. Intuitively and fundamentally this makes little sense. In an article I wrote on April 22nd, I listed 10 reasons to buy Ucore's stock. As a reminder for those who read it, the 10 reasons were listed in the final paragraph. This time, spoiler alert be damned, I'm listing the top 3 reasons right here. Rest assured, I still believe in my, "10 compelling reasons to buy" thesis.

Have investors forgotten about the US$145 million AIDEA loan?

The top 3 reasons to buy Ucore stock sooner rather than later are 1) the AIDEA loan of up to US$ 145 million, old news? 2) very significant progress on Ucore's and technology partner IBC Advanced Technologies' "IBC" Molecular Recognition Technology, "MRT," and 3) an unwarranted cheap valuation. Diving right in, lost in the shuffle of the MRT excitement and debate is last year's news that Ucore obtained what appears to be a pre-approved loan of up to $145 million from an Agency in the AAA-rated State of Alaska. For those skeptical of the State of Alaska's "AIDEA" willingness to move forward, consider that,

"Ucore is pleased to comment on the passage of Senate Bill 99 by a unanimous vote, with all 38 representatives in attendance voting in favor of the bill. SB 99... would authorize the Alaska Industrial Development and Export Authority 'AIDEA" to issue bonds to finance the the infrastructure and construction costs of the Bokan-Dotson Ridge rare earth element project up to a principal amount of US$ 145 million..." 

The key progress made since early March de-risks the Bokan-Dotson Ridge project and the company as a whole. The faster Ucore advances towards pre-construction, the more rapidly the AIDEA loan will be disbursed. The progress of Ucore's MRT segment could help self-fund the development of Bokan-Dotson. Assuming the AIDEA loan comes through, shareholders' equity committment is likely to be a lot smaller than that of peers. To reiterate, the potential $145 million AIDEA loan is quite valuable to shareholders. Other lenders might be interested in co-investing with the State of Alaska. That would suggest the possibility of less equity dilution down the road.

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Bob Kennedy 4 years ago Member's comment

I have come across those Ucore folks before, right Hackenzac/Derm! Ucore relies on Alaskan subsidies to survive. And like all those Cos that depend on taxpayers' funding, it only distorts the market. Ucore will soon follow Great Western on the way to Hades.