For investors, there are few things more exciting than a compelling investment story. A good story can give life to the dry numbers of due diligence, and can even create excitement in early stage projects where there aren't a lot of numbers to share.

Tasman Metals Ltd. (TSX-V: TSM) has a great story and investors who are interested in the burgeoning rare earths market will love to hear the Tasman Metals story.

We spoke to Mark Saxon, founding president and CEO of Tasman Metals recently, and he shared with us the compelling Tasman story and why investors might want to look a little more closely at Tasman.

Corporate Ov­erview & Strategy

Mr. Saxon explained the value of rare earths to investors who may be new to this important class of metal: "Rare earths are used in every high tech application and they have an unusual set of unique properties and that's why they are so valuable in very specific applications like hybrid vehicles, mobile phones, flat-screen televisions, low-power light bulbs, wind turbines, etc. Many technologies use rare earths, particularly green technologies, because they allow everything to be smaller and lighter and faster and more efficient." Rare earths are an increasingly important metal and Tasman's story in the rare earths space is quite unique.

"All of our projects are in Scandinavia between Sweden and Finland," said Mr. Saxon. This might seem unusual to investors who are used to mines in North and South American or China, however both countries have strong mining industries. "Our flagship property is a resource project in southern Sweden called Norra Karr. The resource returned about 60 million tons at 0.54% total rare earths plus 1.72% zirconium oxide, so it's a very large rare earths project." Later he expanded on the importance of this project: "The project is more than 50% heavy rare earths (the highest priced rare earths) and that's very unusual. At dollars-per-ton of rock in the ground, it's very high. And, the project has no uranium and thorium, which is unusual for a rare earths project, which means that our development pathway will be much simpler."

Tasman was formed in 2009 and has already transitioned from an exploration company into a development company. They're continuing to explore but they're also looking to extract and develop the mine. But this isn't as easy as it is with other metals: "With all rare earths projects, the real challenge is metallurgy. The challenge is to understand how to get the metal out of the rocks and produce a viable product. That's the focus of our research at the moment. [The research] is being done by SGS (Lakefield) in Canada. We're going through the process of concentrating the product and then hydrometallurgy to find out how to extract the metal."

Even while they work on extraction research, they're continuing to explore and develop their mine: "We're also doing further drilling, which will be underway for another 3 to 4 months. With those results in hand, we'll do a scoping study around the middle of the year. We're also doing environmental monitoring and that will allow us a mine application around the end of 2011 or early 2012 when we have the environmental data. Then a feasibility study is the next step for us," said Mr. Saxon.

Ultimately, they want to be a rare earth producer, and this is where their story gets really exciting. While most producers are planning to sell into China, Tasman Metals is taking a different approach: "Our intention is to produce finished rare earth products (finished rare earth oxides and individual rare earth oxides). That's where the real value addition is and it fits in well with our European situation: There are many rare earth consumers in Europe and we want to connect with them. We want to keep the metals inside Europe and partner with European consumers." He adds what could possibly be a key differentiator for Tasman: "We have the only 43-101 compliant in mainland Europe. If the European Union is going to have a domestic source of heavy rare earths, it's going to have to come from our project."

The company has a great team behind it, and Mr. Saxon mentioned several key members. Two important advisors that help to contribute to Tasman's story include: “Les Heymann, a fellow who has been building rare earth plants inside China. He's a big part of our story. There's also Tony Mariano, who is a rare earth mineralogist and geologist. He's been excellent at pointing out the key features we need to focus on in the development of our project."

And every company needs to have enough cash to cover their costs, while managing those costs as best they can. Mr. Saxon thinks that Tasman's story is strong here, too. "We're well financed," he said. "We have about $11 million in the bank and another $5 million in-the-money warrants. For the stage of the project, we have enough money for our milestones. If the market is strong and we hit our targets, we'll be financing again in the next six months, but we have money to see us through this current phase and to add value where we need to."

As for managing their costs, Tasman is able to keep costs down in a number of ways, even though they are exploring and developing in the European market: "Infrastructure around the site is tremendous: We have roads and rail and nearby labour. Our costs are very low for that reason." In addition to that, the project can be mined quickly once it is ready to be mined, and this will keep development costs down: "The project is 150 metres wide at surface and 600 metres long. It starts at surface, just below half a metre of soil cover," said Mr. Saxon.

Rare earths are an exciting class of metals that are gaining the attention of investors everywhere. But finding a good rare earths story that includes viable, potentially profitable production is, well, rare. But Tasman has a compelling position as the cost-effective, sole provider in an eager marketplace.

The Alper family owns Tasman Metals stock.

REFERENCES

http://www.tasmanmetals.com

Suite 1305 - 1090 West Georgia St. Vancouver, BC Canada V6E 3V7

1 604 699 0202

info@tasmanmetals.com

SGS (Lakefield) http://www.met.sgs.com/