Rare Earth Minerals (LSE: REM) and Sirius Minerals (LSE: SXX) have beentwo of Motley Foolsmost actively followed stocks lately, both boasting anavid if nervy fan base.
The fans have had reason to cheer, however, as both have enjoyed somegood news in recent months. In August, Rare Earth Minerals announceda tie-upwith electric sports car and energy storage companyTesla Motorsthat did wonders for its prospects and profile.
Deep Resources
Sirius Minerals has been edgingcloser to full approval forits potash projectbeneath the North York Moors, where it hopes to digthe planetslargest polyhalite mine to fertilise the worlds farms. Neither company has dug upany money, but they have massive potential.The will they, wont they nature of bothstocks has captured investors attentions but ensured volatile share price performance.
Sirius is up 73% over the last six months to 18.25p, as it awaits the planning green light for its polyhalite plans.Over the same period, RareEarth Minerals is down around 20% to 0.98p, albeitwith plenty of highs and lows in between. Both companies have a long journey before they actually generate any revenues, but markets clearly seem tothat Sirius now has the smoother road.
Battle Of York
We should know for sure quite soon, as news emerges thatthe North York Moors National Park Authority willcirculate its final decision notice and other relevant documentation for signatures this week. The verdictshouldbe issued shortly afterwards: investors will be crossing their fingers and toes.
If it gets the answer it wants,chief executive Chris Fraser still has toraiseup to2bn to develop the potashmine and Teeside export links. Management has strucka series of morale-boosting polyhalite supply agreements with major agri-business customers, butnone will bear any fruit until the mining starts, and thatis some way off.
The Bacanora Story
Investors inREM also face an anxious wait. Tesla has high standards and has set tough performance milestones for thelithium hydroxide it needsto manufacture batteries at its $5bn Gigafactory in Nevada. It couldbe two years before we know for sure whether it has met those milestones. That said, Tesla has a strong interest in the success of REM and its partner Bacanora Minerals, and wont want to see the projectfail. If it succeeds, REM has the tasty carrot of a five-year contract, with a potential five-year extension to follow.
Both stocks have been relatively quiet in recent weeks as investors await the next development. Many traders have quit the scene,as the prospect of a short-term gain recedes. Even ifSirius gets the final decision it wants, as markets appear toassume, it still wont make any money for several years. Rare Earth Minerals faces a similar challenge.
Both of these stocks could prove big winners for your portfolio, but investors will have to dig deep into their reserves of patience to find out, without a single dividend as a reward.
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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.
