By Sarah Pridgeon
A New York-based company last week announced acquisition of 2,100 acres of mineral leases for state-owned land in Crook County. The leases cover several small to medium patches of land near the Bear Lodge rare earth findings, to the south and south-east of Sundance.
According to recent reports in the regional press and a press release itself, the company intends to explore for rare earth minerals within these holdings. Further investigation, however, suggests that this may not be the case and that Royal Energy Resources Inc. might have alternative plans for its leases.
“This is an exciting time for us,” said Jacob Roth, Chief Executive Officer, Chief Financial Officer and President of ROYE, in the press release. “Our next step in the near term will be a request for a drilling/testing permit from the Wyoming Department of Environmental Quality/Land Quality Division.”
The company, however, states on its website that it has, in the past, “completed several transactions” wherein it sold lease rights and retained a royalty interest. Upon being asked whether the company may follow this route with its rare earth lease holdings, Roth responded, “I don’t know whether we will do drilling or will farm out to get royalties.”
The Wyoming State Loans and Investments Board (SLIB) granted five separate leases to ROYE, a development-level company based in Brooklyn, New York, at its monthly meeting of the board on April 7. Roth had no comment regarding the delay in making the announcement.
The proximity of ROYE’s leases to the current rare earth exploration by Rare Element Resources in the Bear Lodge echoes the company’s previous lease acquisitions. These, according to its website, include leases for uranium rights on 1,000 acres of property in Laramie County, located in the uranium trend approximately 25-30 miles from Powertech Uranium Corp’s holdings.
The company maintains that it has also “completed the initial stages” of forming a subsidiary in Romania to “acquire and develop” possible gold, silver and copper mining concessions. Further adding to the diverse nature of its holdings, ROYE also claims to have acquired oil and gas leases for 3,000 acres of property in Weston, Goshen, Converse, Fremont, Laramie and Platte Counties.
“We have oil and gas leases and uranium leases and rare earth is a very big thing today,” confirms Roth.
ROYE describes itself as an “emerging play on oil and gas royalties, potential silver and gold reserves in Romania and potential rare earth metal and uranium properties, which could unlock significant combined value for shareholders.” Its website claims that the company is “currently attempting” to secure financing in Europe for development of its rare earth and precious metal leases, as well as for purchase of energy and mining leases and “other corporate requirements.”
A promotional newsletter was sent out to potential stockholders in the wake of the rare earth lease announcement, describing the potential worth of ROYE’s holdings in Crook and Laramie Counties. ROYE is a publicly traded company operating within the over-the counter market, which is described by the U.S. Securities and Exchange Commission as “securities that are not listed on the Nasdaq Stock Market or a national securities exchange” and almost exclusively deals with penny stocks.
According to investment website Hotstocked.com, which claims to specialize in analyzing the over-the-counter and microcap market, the newsletter was in all probability paid for by ROYE. It touted the company as a new discovery despite its having been “silent for months, and its stock is generally illiquid,” and encouraged recipients to invest in the company largely on the basis of its lease holdings being so close to current explorations.
No exploration activities have yet taken place on any of ROYE’s leased land holdings. According to Cathy Lujan, Public Relations Specialist at SLIB, the cost for this type of lease is a $25 filing fee and $1 per acre, with the real expense only occurring when exploration begins, at which point a percentage must be paid to SLIB in royalties.
Roth, who founded the company in 1999, describes himself as having 15 years of experience as a financial controller with public companies and, between 1973 and 1980, helped to raise funds for oil and gas development stage companies. He states on the company website that he was previously the CEO of Virilitec Industries, Inc., a public company engaged in “attempting to distribute a line of bioengineered virility nutritional supplements.”
Grid references for the five leased holdings, which lie between four and 12 miles from the Bull Hill prospect currently undergoing testing by Rare Element Resources, include E2E2 24-51-63, Lot 4: SESW:S2SE 18-51-62 and Lots 1-4: E2W2 19-51-62, 36-51-63, W2SE:E2SW 11-50-62 and NWNE:NENW 14-50-62 and 16-51-62. The lease numbers for these holdings run from 0-42776 to 0-42780.