Regarding the pre-feasibility study, a drilling contractor has been mobilised to conduct infill reserve drilling, which is scheduled to start in the current quarter and is due to be completed in the third quarter of the current year. In addition, the Sonora mineral resource estimate has been amended to reflect the parameters within the pre-feasibility study.

Furthermore, today’s update from Rare Earth Minerals includes details of various discussions with strategic investors, banks, debt providers and offtake partners regarding the development of a project financing strategy. This is clearly a necessary step for the company to take and positive news flow in this regard could have a significant impact on its share price.

What’s the alternative?

Clearly, Rare Earth Minerals has a considerable amount of long term potential, with demand for lithium likely to rise in the coming years. As such, many investors may determine that it has brighter prospects than oil plays such as Genel (LSE: GENL) and Shell (LSE: RDSB). That may especially be the case since the price of oil has come under renewed pressure following the lack of agreement among OPEC members to freeze production.

However, with Shell being vastly larger, more financially stable and more profitable than Rare Earth Minerals, it remains a much more appealing buy based on its risk/reward ratio. Certainly, Shell may not have the same level of potential rewards as Rare Earth Minerals because it’s well-established and may not benefit from the same degree of positive news flow in future. However, its risks are also much lower due to its excellent balance sheet and diversified operations, while Shell’s price-to-earnings (P/E) ratio of just 13.4 indicates that upward rerating prospects are upbeat.

Meanwhile, Genel Energy may be a better established company than Rare Earth Minerals and is several times larger than its resources peer, but it too comes with great risks. For example, the geopolitical outlook for the Northern Iraq/Kurdistan region remains very uncertain and although Genel has done a good job of operating in spite of these conditions, they’re likely to continue to pose a risk to the business and could hold back its share price.

Genel is set to record major impairments this year due to a reduction in the size of reserves at its Taq Taq field. This is hugely disappointing for the company and could lead to reduced profitability in the long run. And with Genel’s financial position being uncertain as a result of slow payment from the Kurdistan Regional Government (KRG), there seem to be better options available elsewhere. In fact, with a number of larger resources plays offering favourable risk/reward ratios, the same could be said for Rare Earth Minerals, too.

The post Is Rare Earth Minerals PLC A Superior Stock To Royal Dutch Shell Plc And Genel Energy PLC After Today’s Update? appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Royal Dutch Shell. The Motley Fool UK has recommended Royal Dutch Shell B. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

For example, the falling oil price has had a negative impact on Rockhopper Exploration’s (LSE: RKH) valuation over the last year, with it falling by 47%. However, the company’s shares have become increasingly popular in recent weeks as the price of oil has risen and Rockhopper is now up by a whopping 17% in the last month.

Clearly, the price of oil will make a huge difference to Rockhopper’s performance, but putting that to one side, the company appears to be relatively appealing for a small-cap exploration business. That’s at least partly because it has a reasonably strong balance sheet. This includes a substantial amount of cash that should be able to fund its near-term drilling requirements. In addition, Rockhopper has a fairly well-diversified asset base, with it having considerable potential in the Falklands as well as assets in Europe.

Despite Rockhopper’s failure to be awarded a production concession in Italy recently, its tie-up with Falkland Oil & Gas should produce a stronger combined entity that’s better equipped to face a low oil price environment. As such, and while Rockhopper is a risky buy, it could continue to make gains over the medium term.

Share price soaring

Also rising in recent weeks has been Sirius Minerals (LSE: SXX), with the company’s shares recording capital gains of 38% in the last month. That’s despite there being no significant news flow released during the period. As such, it could be a response to a more positive outlook for the wider commodities sector, with Sirius’s share price having come under a degree of pressure prior to the last month, due in part to question marks surrounding the cost of the fertiliser it plans to produce.

Although Sirius Minerals recently announced a delay to the definitive feasibility report for the planned mine in York, such challenges are to be expected when such a major project is being delivered. But with finance still being rather uncertain due in part to the risk-off attitude of investors towards the commodity sector at the moment, Sirius could be a stock to watch rather than buy at the present time.

Think long term

Meanwhile, Rare Earth Minerals (LSE: REM) continues to offer excellent long-term potential due to the expected global increase in the use of lithium. Although its shares have fallen by 29% since the turn of the year and it has no revenue at the present time, it has an upbeat long-term outlook. That view is enforced by the potential for deals with major customers such as Tesla, as well as the upbeat update released by European Metals Holding earlier this year, in which Rare Earth Minerals has a 12% stake.

Despite this, it may be prudent to invest elsewhere right now since sentiment in commodities could easily worsen if commodity prices fall. Rare Earth Minerals may have a relatively well-diversified asset base that could deliver huge profitability in future years, but with other resources stocks being profitable and offering good value right now, the risk/reward ratio of Rare Earth Minerals may be trumped by a number of its peers.

The post Are These 3 Small-Cap Resources Stocks ‘Screaming Buys’? Rockhopper Exploration Plc, Sirius Minerals PLC And Rare Earth Minerals PLC appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla Motors. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Shares in iron ore producer Ferrexpo (LSE: FXPO) have surged by around 24% today on the back of rising metals prices. As such, investor sentiment in the wider resources sector has been given a boost and, suddenly, the outlook for investors seems to be a little brighter.

However, the reality is that companies such as Ferrexpo face highly challenging outlooks. For example, in the 2015 financial year Ferrexpo is expected to have recorded a pre-tax loss of £19m, even though it delivered record production during the year. As a result of this, Ferrexpo’s shares have fallen from a high of 80p to a low of just 15p in the last year.

However, with Ferrexpo due to return to profitability in the 2016 financial year, its shares could begin to move upwards. And with there being the scope for a further increase in metals prices, now could be a good time to buy them. Certainly, they remain relatively high risk, but with Ferrexpo trading on a forward price to earnings (P/E) ratio of only 7.1, it could prove to be a surprisingly strong performer in the coming years.

Downbeat

As well as metals price rising in recent days, the price of oil has also been creeping up. This could be good news for investors in Rockhopper (LSE: RKH), especially since its shares have fallen by a whopping 59% in the last year. However, with the recent disappointment of the failure to award Rockhopper a production concession for the Ombrina Mare field in Italy still likely to be weighing heavily on investor sentiment, the company’s short term outlook may appear to be rather downbeat.

Looking further ahead, though, Rockhopper continues to be relatively well-funded and has an asset base which offers considerable long term profit potential. Certainly, a decline in oil prices would hurt it, but for less risk averse investors seeking a small oil explorer, Rockhopper could be of interest. That’s especially the case since Rockhopper has a relatively well-diversified asset base when compared to a number of its similarly-sized exploration peers.

Potential

Meanwhile, shares in Rare Earth Minerals (LSE: REM) have continued their slide, with them being down by 24% in the last three months. However, today’s news that Rare Earth Minerals has increased its stake in European Metals Holdings by 7.9% to 19.8% at a cost of £670k could improve its long term outlook. That’s because it adds to the company’s equity positions in major lithium deposits, with there being the potential for large-scale, low cost production over the long run.

Clearly, Rare Earth Minerals has a significant amount of long term growth potential since demand for lithium is likely to rise in future years as the importance of cleaner energy rises and products utilising lithium battery power increase in prevalence. As a result, and despite their recent share price performance, shares in Rare Earth Minerals may be of interest to less risk averse investors.

The post 3 Resources Stocks Set To Shine? Rockhopper Exploration Plc, Ferrexpo Plc And Rare Earth Minerals PLC appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Ferrexpo. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

This is particularly true for stocks such as Rare Earth Minerals (LSE: REM) and Sirius Minerals (LSE: SXX), neither of which are actually earning any revenues at the moment. Instead, they have a large planning and investment programme ahead of them, and investors can only cross their fingers, keep the faith and hope it all works out in the end.

Silent storms

The lack of major news or announcements, aside from the odd semi-conclusive drilling update, ought to leave the share price becalmed but often the opposite happens. The merest scrap of information sends investors into a whirl and blows the share price violently in all sorts of directions. Also, stocks like these risk getting damaged by commodity sector storms, even if they have little bearing on their own performance.

REM’s share price is down 20% year-to-date, from around 80p to 67p, despite the lack of serious news. Stocks like this can really stretch your patience. While it got a major boost last year following its deal to supply Tesla Motors with lithium hydroxide, this has led nowhere as we wait to hear whether it meets Tesla’s stiff two-year performance milestones. 

This year’s slide downwards was reversed when European Metals Holdings, in which it has an 11.9% stake, released an optimistic update on drilling results from its Cinovec project in the Czech Republic. If you believe in the long-term case for lithium, rare earth elements and clean battery power, then you might want to take advantage of the disconcerting effect of the lack of news flow from Rare Earth Minerals. Just make sure that you have the patience to stick around while very little happens, and the courage to keep your nerve when a lot happens all at once. 

Fertile ground

AIM-listed potash miner Sirius Minerals has also been sunk by the wider storms afflicting the commodities sector, as well as one or two squalls of its own. Sentiment took a knock in January after management announced a two-month delay of the definitive feasibility study on its York Potash Project, which it claims is the world’s largest and highest grade deposit of polyhalite. One concern is that it will struggle to raise the £2bn it needs to fund a deep mine beneath the North York Moors national park and develop export facilities at Teesside, given the troubled commodities climate.

Another worry is that fertiliser costs have fallen along with economic sentiment, hitting the potential future value of potash and further deterring investors. Yet nobody can say what will happen to the price of potash (or anything else in the notoriously cyclical agricultural sector) by the time Sirius finally starts shipping, assuming it ever does. It’s merely idle talk that serves to plug the gap while investors wait for something more substantial.

Investors have rallied to the cause, forcing up the share price by 8% over the last week, although at today’s 13p it’s still less than half its 52-week high of 29p. Like REM, I would rather invest in SXX on no news than following a share price spike after a burst of good news. But you will still need courage and patience to see it through to the end.

The post No News Is Bad News For Rare Earth Minerals PLC & Sirius Minerals PLC appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

No guarantees

Encouragingly, Genel recently reported the receipt of further payments from the Kurdistan Regional Government (KRG). This is excellent for the company and with it also including a contribution towards previous outstanding amounts, it shows that over time the $millions which are owed to Genel for past oil exports could gradually be repaid.

With Genel trading on a price to earnings growth (PEG) ratio of just 0.4, it has clear upside potential. However, it remains a high risk play and therefore it may be prudent to await further payments of outstanding amounts before buying a slice of the business, since there are no guarantees of future payments given the instability within the region.

Positive potential

Also rising sharply today are shares in Solo Oil (LSE: SOLO). It is up 8% today and has soared by over 20% in the last week, due mainly to the positive news flow from the Horse Hill project in the UK. Solo Oil has a 6.5% interest in PEDL137, from which dry oil has continued to flow naturally at a stabilised rate of over 450 barrels of oil per day during a second day of testing. And with two further intervals yet to be tested, there is the potential for further positive news flow in the coming days and weeks.

As a result of this, there is the real prospect of more share price gains for investors in Solo Oil. However, the stock is very much dependent upon news flow and it is therefore very difficult to accurately ascertain its risk/reward ratio. Because of this, for most investors it seems prudent to stick to profitable oil and gas plays which trade on low valuations at the present time.

Bright future

Meanwhile, Rare Earth Minerals (LSE: REM) is up by 4% today after European Metals Holdings (in which it has a 11.9% stake) released an update to say it was very pleased with the drill results from the Cinovec project in the Czech Republic. Drillhole PSn01 returned an intercept of 156 metres averaging 0.46% lithium oxide, with the mineralised intercept including a high grade interval of 64 meters averaging 0.63% lithium oxide.

In addition, the lithium intercept from Drillhole PSn01 also contains zones which are significantly enriched in tin and tungsten, which is clearly good news for Rare Earth Minerals. And with demand for lithium in particular likely to rise in the long run as the world shifts towards cleaner energy, it seems to have a bright long term future. As such, it may be of interest to less risk averse investors.

The post Do Double-Digit Gains For Genel Energy PLC, Rare Earth Minerals PLC And Solo Oil PLC Make Them Buys? appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

One company which has seen investor sentiment and profitability slide in recent years is Anglo American (LSE: AAL). Its bottom line is expected to fall by as much as 36% in 2016 and while it is a relatively well-diversified business, commodity price falls across the board mean that further declines in profitability are on the medium-term horizon.

However, with a new strategy that seeks to streamline Anglo American’s operations and, most importantly, cut costs by a significant amount, the company’s long term future could be sound. Furthermore, the market has adapted to the company’s declining profitability and it now trades on a price to earnings (P/E) ratio of just 10.7 using 2016’s drastically lower earnings figure.

And while its assets are worth less than they once were and could be written down in future, a price to book (P/B) ratio of 0.3 indicates that for long term investors it could be a successful investment rather than a failure.

Similarly, support services company Petrofac (LSE: PFC) is also changing its strategy to cope with reduced demand, now that investment across the energy industry is in decline. Like Anglo American, Petrofac is seeking to become more efficient and with the company having an impressive pipeline of business, its financial performance could be better than the market currently anticipates.

Certainly, Petrofac’s share price has been volatile in recent months, but even before the current oil price crisis Petrofac was never the most stable of companies. Looking ahead, its beta of 1.4 indicates further volatility is on the horizon, while a forward P/E ratio of 8.5 indicates upward re-rating potential.

Meanwhile, Rare Earth Minerals (LSE: REM) has recorded a share price fall of 28% in the last six months, despite having made encouraging progress on its plans. For example, it has signed a deal with Tesla to supply the car manufacturer with lithium for its batteries, while positive news about drilling activities at its assets has also been released. And with the potential for rapid increases in demand for lithium, as the world shifts to cleaner energy, Rare Earth Minerals could be a strong performer.

Of course, with a number of other mining stocks already being profitable and offering low valuations, for most investors there may still be better opportunities elsewhere – especially if investor sentiment in the sector does continue to worsen.

The post Why Anglo American plc, Petrofac Limited And Rare Earth Minerals PLC Are Not Doomed To Fail appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Anglo American and Petrofac. The Motley Fool UK owns shares of and has recommended Petrofac. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Good As Gold?

AIM-listed Xtract Resources (LSE: XTR) has seen its share price soar by 175% in the last year but don’t get too excited, that is from 0.08p to today’s 0.22p. Still, investors have made money from this penny stock and it could be a tempting prospect.

Xtract is a gold and copper exploration and development company that boasts two main prospects, the Chepica gold and copper mine in Chile and the O’Kiep and Carolusberg copper sulphide dump projects in South Africa. It has suffered setbacks at its Chipeca Gold Mine in Chile where the authorities suspended operations following two fatal accidents, although it hopes to be granted permission to restart next week. Last year it suffered mixed results in South Africa, where feasibility studies continue.

Xtract is pursuing a range of other prospects, including a joint-venture in Mozambique, which should give it some much-needed diversification. Forecasts suggest it will make profits of £2.5m this year, on revenues of £9.8m, which I certainly find tempting. Today you can buy it at nine times earnings. This stock could merit a bit more digging…

Petra Diamonds Forever

Diamond miner Petra Diamonds (LSE: PDL) has had a tougher year, its share price falling 54%, which is the kind of number you expect from miners these days. Its latest trading update showed the company beating production targets in the last six months of 2015, but unfortunately revenue fell 28% to US$154m and diamond sales fell 7% to 1,303,051 carats.

Chief executive Johan Dippenaar flagged up its expansion programmes, which remain on track to deliver the first significant input of undiluted ore in second half of this year, which should boost grades and product mix, while, its new plant at Cullinan is on track. City forecasts suggest a drop in profits from £85m to £57m in the year to 30 June and a forecast 14% drop in earnings per share, which takes some of the shine. Petra is reasonably prices at 10.8 times earnings and yielding 2.7% but it is hardly a diamond prospect right now.

Back Down To Earth

It has been a disappointing year for investors in Rare Earth Minerals (LSE: REM), whose share price is down 20% over the last year to 0.71p. The stock did get a boost last year following its deal to supply Tesla Motors with lithium hydroxide, albeit with stiff two-year performance milestones. Results from the Cinovec Lithium-Tin-Tungsten project, in which REM has a 12% equity interest, and the Sonora Lithium Project by Bacanora Minerals, 17.19% owned by REM, have been encouraging.

It is always an act of faith investing in fledgling miners, until the revenues start rolling in, even ones mining highly-valued metals as lithium. Demand from battery producers is expected to surge as renewable energy storage becomes a global issue, but investors will need strong nerves and bags of patience.

The post 3 Precious Investments: Xtract Resources PLC, Petra Diamonds Limited & Rare Earth Minerals PLC appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

However, on the other hand US interest rate rises in December should have caused downward pressure on the price of gold. That’s because gold tends to perform poorly during periods of interest rate rises as other interest-bearing assets become more appealing by comparison. Clearly, the seeking of a store of wealth has been a stronger force than that of interest rate rises in recent weeks.

As a result of this, the share price of gold miner Randgold Resources (LSE: RRS) has risen by 8% year-to-date. Looking ahead, further gains in the Africa-focused company are very much on the cards, with the price of gold likely to be underpinned by continued investor fear. And with Randgold being forecast to increase its bottom line by 21% in the current year and its shares trading on a price-to-earnings growth (PEG) ratio of 1.3, a fall of 50% seems highly unlikely. Rather, a potential gain in the long run indicates that now is the time to buy a slice of the business.

Long-term potential

Also outperforming the wider market in 2016 has been lithium exploration company Rare Earth Minerals (LSE: REM). Its shares are up around 1% since the turn of the year, benefiting from positive news flow regarding the company’s long-term prospects. For example, European Metals Holding Ltd (in which Rare Earth Minerals has a 12% stake) released an encouraging update in the first week of January, while an upgrade to indicated resources at the company’s Sonora project in Mexico in November continues to support investor sentiment in the stock.

Looking ahead, Rare Earth Minerals has significant long-term potential due to forecast growth in demand for lithium as battery power becomes more prevalent in a more environmentally-conscious world. As such, and while Rare Earth Minerals remains a relatively risky buy, the chances of a 50% fall due to the wider market crash seem unlikely.

Risks and rewards

One stock that has fallen heavily in 2016 is BHP Billiton (LSE: BLT). Its shares have been hurt by details of a $7.2bn impairment charge and this, alongside further falls in the prices of oil, iron ore and copper, has led to a slump in BHP’s share price of 15% since the turn of the year.

Further falls could be on the cards since the prices of those three commodities are showing little sign of mounting a major comeback. And while BHP is a diversified resources company with a sound balance sheet, if commodity prices collapse further, there’s only so much it can do to cut costs.

While BHP’s short-term outlook is risky, its long-term prospects remain bright. That’s because it looks set to cut its dividend and potentially embark on acquisitions while assets are trading at discounts. With global energy demand likely to soar in the long run, buying such assets now could give BHP a more dominant position, as well as higher profitability. So while short-term paper losses may be incurred by buying BHP, in the long run it’s a highly appealing buy at the present time.

The post Could BHP Billiton plc, Randgold Resources Limited & Rare Earth Minerals PLC Fall By 50% In This Market Crash? appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Peter Stephens owns shares of BHP Billiton. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Clearly, there is a significant amount of uncertainty surrounding the wider oil sector and, with the outlook for the oil price being relatively downbeat, small explorers such as Falkland Oil & Gas may find that investor sentiment remains cautious. Of course, the company has upbeat prospects and, although its drilling progress has been rather mixed in 2015 and has included costly delays, it remains well-positioned to execute its overall strategy. As such, it could prove to be a sound long term buy, although a relatively high degree of volatility seems likely in the short run.

Also reporting good news today is Rare Earth Minerals (LSE: REM), with its mineral resource estimate having increased significantly. In fact, the company’s indicated mineral resources at its Sonora lithium project have increased by over 300% from 1.1m tonnes to over 5m tonnes of lithium carbonate equivalent. This has a very positive impact on mine planning and also on the project’s life of mine, with it allowing Rare Earth Minerals to focus on the long term as well as on higher grade mineral resources.

Although positive, the news has been met with dampened enthusiasm from the market, with Rare Earth Minerals’ shares being up just 1% thus far today. And, with them having fallen by 14% this year, it has been a disappointing period despite the positive news flow from the deal to supply car manufacturer Tesla. Of course, the long term potential for lithium is strong, with it being a commodity which is increasing in popularity as battery power becomes more prevalent. And, while Rare Earth Minerals is still a relatively high risk means of accessing that growth potential, it could prove to be a sound long term buy – especially after today’s positive update.

Meanwhile, the world’s largest silver producer Fresnillo (LSE: FRES) appears to be a very sound purchase at the present time. Certainly, the price of silver has endured a major downward spiral in recent years and this has hurt the profitability of the entire sector. However, Fresnillo’s bottom line has remained firmly in the black in recent years and, looking ahead, the company is forecast to increase its earnings by 155% this year and by a further 85% next year.

This puts Fresnillo on a price to earnings growth (PEG) ratio of just 0.4, which indicates that there is a wide margin of safety on offer. In other words, even if the price of silver falls or the company’s profitability growth rate is downgraded, its shares could still make strong gains. As such, and while smaller resources companies do hold considerable interest for less risk averse investors, their larger peers such as Fresnillo appear to be even more appealing buys.

The post Are Falkland Oil And Gas Limited, Rare Earth Minerals PLC & Fresnillo Plc Set To Soar? appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Iron Men

One month ago, I declared FTSE 100 giant BHP Billiton (LSE: BLT) a full-blown mining disaster. It is down another 20% since then, as its props continue to collapse. Over five years is share price is down 60%, and investors who have hung on hoping to recoup their losses have been buried. Right now there seems no end to the misery. Especially with International FC Stone analyst Ed Meir telling Bloomberg that the outlook for King Copper is “grim-t0-bleak” and miners need to start slashing supply as Chinese demand continues to plummet.

Iron ore faces the same dynamic, as supply rises while demand plummets. The price has fallen from $180 a tonne four years ago to around $50 today. Next year consensus suggests that will fall to $45. A stronger dollar won’t help details, if the US does hike rates next month.

Management has been responding in the same way as every other troubled oil and commodity producer: slashing costs and shelving investment, while maintaining supply to keep the cash flowing. There is only one thing left to slash now: the dividend, which currently yields a crazily fragile 9.22%. How long until that comes crashing down?

Something More Earthy 

AIM-listed Rare Earth Minerals (LSE: REM) is also down sharply over the last month, falling 15% from 0.94p to 0.80p. This is more down to a lack of news, rather than bad news. There has been little to inspire investors since its eye-catching deal to supply Tesla Motors with lithium hydroxide from its Sonora field in Mexico, alongside partner Bacanora Minerals.

REM is now focusing on hitting Tesla’s tough two-year performance milestones. If it makes it, investors could hit pay dirt. The recent share price drop could make a decent entry point. Effectively, you are buying blind.

Pretty Poly

Sirius Minerals (LSE: SXX) is another stock in limbo at the moment. The AIM-listed potash miner has clattered over most of the hurdles that lay in the way of winning full approval for its North York Moors potash project, where it hopes to dig the planet’s largest polyhalite mine. But it has a long way to go before it can hit its target of producing 13m tonnes of the fertiliser per year.

Sirius needs to raise as much as £2bn to drive the project forward, a tall order as investors shy away from the commodity sector. But again, this isn’t a metals miner, demand for food is rising and Sirius has already secured polyhalite supply agreements with major agri-business customers. Today it trades at around 18p. Liberum Capital has just set a target price of 38p, suggesting potential upside of around 110p, which is certainly food for thought.

All three commodity stocks come laden with uncertainty but I think future prospects at REM and SXX hold out more hope than BHP Billiton’s troubled recent past.

The post BHP Billiton plc, Rare Earth Minerals PLC Or Sirius Minerals PLC: Which Should You Buy Today? appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.