The Ups and Downs

Dateline Resources (ASX: DTR) is a classic example of ups and downs. This is a solid little (and I mean little) company with a huge future (see previous posts), especially since Donald Trump meantioned them specifically.

So why did the price, after a (let's get real) meteoric rise, go down?

Let's go back to mid-April when the price was 0.6 cents (yes, not even 1 cent).

If you had bought 1,000,000 shares then, they would have cost you $6,000. In a company that has more than a million ounces of gold to dig up plus rare earths, and they're right next door to a rare earth processing facility.

Then Mr trump called them America's second rare earth mine, and things started to go a little crazy. Suddenly, attention was focussed on DTR, even by the American investors who had to buy through the ASX. This meant an increase in buying pressure.

In 3 weeks, the price jumped to 4.2 cents a share. Suddenly that $6,000 investment was worth $42,000. 

IN THREE WEEKS!

That's the wort of result that people usually only dream about. And so plenty of shareholders decided to take their profits and go. This means an increase in selling pressure. And so the price dropped to 2.8 cents.

HANG ON. That's still a greaat result from 0.6 cents just a month earlier.

Plus there was pressure from those who had decided to short the DTR stock (after all, they did not want to lose their shirts, and it was looking like they could).

Now it looks like that selling has been done and DTR has started to rise again. How high will it go? Don't ask me. In April I told a colleague it would get to 2 cents by July (it did that in 2 weeks), and he was happy with that result. Yep, I underestimated it. Other shareholders are prdicting wild amounts like 5 cents this week, or 20-30 cents late this year, or $1.20 by the end of next year.

I honestly have no idea. I just know that I am not selling any time soon.

What's driving the price?

More than a million ounces of gold, and a gold price that just keeps increasing (increasing the profits from gold mining).

Substantial rare earths. DTR is sitting right next to Mountain Pass, Americ'a only operating rare earths mine and only rare earths processing facility. They don't even have to truck the rare earths to the facility, they could use a conveyer belt.

Strong support from the WHite House administration. Including being personally mentioned by the President.

An upcoming listed on the OTC board in te USA, giving strong exposure to American investors.

Plus the construction of an airport nearby which will probably mean they can sell all their waste rock as aggregate.

Plus an 80% stake in a nearby strontium mine that is already operating.

There are a heap of catalysts coming up to force the share price even higher, including:

that listing I meantioned;

further investigation of the rare earths on site; 

a bankable feasibility study that is due for completion in a few months;

the strong potential for a large grant (possibly through the Dept of Defence) to help with the rare earths;

Oh yeah, and some strong speculation about the future. After all, Hancock (aka Gina Reinhart) owns 5% of Mountain Pass. They are almost certainly aware of DTR and what it has. The results of the rare earths work may prove telling and may prompt a move by the big Australian miner.

The ups and downs. And, in my opinion there are a lot more ups to come.