The Commodity Run to Watch in 2019 - Seite 2

The pain for the company has subsided, and the timing is now ripe as we see a confluence of rising commodity prices and asset sales. In terms of recovery stories in the mining sector, this is the biggest one.

#2 United Battery Metals (UBM, UBMCF)

If you want a direct hit on vanadium-this is it. This little-known company just put America on the map for vanadium with a discovery in Colorado. UBM is now aiming to be the single U.S. source of this most precious of rare element metals.

Welcome to the Wray Mesa Project in Montrose County, Colorado, where UBM is sitting on an estimated massive 2.7 million pounds of vanadium (along with over 356,000 pounds of uranium as a bonus).

That should mean an American source for the rare element metal powering the "liquid electricity" breakthrough. It makes the electric vehicle push look like child's play. The worldwide battle for vanadium is about to ramp up. The world's largest battery is being constructed right now in China, while the U.S. has zero production of this strategic mineral.

We already know there's a lot of uranium and vanadium at UBM's Wray Mesa Project in Colorado. It was extensively explored in the 1940s for nuclear bombs, and then in the 70s and 80s for nuclear power. Now we have new tech that are hoped to revise these numbers upward significantly.

The mineral resource base estimate here was made using a 739-drill hole database showing an indicated resource of approximately 217,000 pounds of contained uranium and some 2.7 million pounds of vanadium. And it's easy to mine because you can just scrape it off the exposed sandstone.

With current ferro vanadium prices at over $88 per kilogram, 2.7 million pounds (1,227,000 Kg) would be a $96M gross take for a company that has a market cap of just over $10 million. And that's just for what's expected to be already there. When UBM starts looking at new exploration …

#3 Rio Tinto (NYSE:RIO) 

The No. 2 miner has now reorganized its marketing division to catch up to Glencore and Anglo for commodities trading. But Rio's iron ore business is also set to expand. Last year, iron ore accounted for 44% of Rio's revenues, and it's a pretty good time for iron producers.

Rio's also got uranium in its portfolio in Australia, Namibia and Canada-and where there's uranium, there's usually vanadium. Rio already has vanadium in its portfolio, but the timing isn't quite right yet to buy into Rio just for vanadium: investors won't feel the price bump in vanadium through Rio just yet. But patience is a virtue.