Dot-com deja vu muddies the rush for rare earths =4 (Thomson Reuters)

The project, with Brazilian miner Mineracao Taboca, will cost about $100 million to bring to market. Mitsubishi Corp <8058.T> is a partner in the development of the project.

Great Western's Steenkampskraal mine, which is projected to come online in early 2013, will cost just C$30 million, including the construction of a separation facility in South Africa.

That compares with the C$729 million Avalon needs to bring its massive Nechalacho mine into production in Northern Canada.

Nechalacho, like Quest Rare Minerals Ltd's Strange Lake project in northern Quebec, is a heavy rare earth deposit with a higher than normal concentration of dysprosium and terbium.

The implied value of a heavy rare earth deposit has boosted Avalon's market cap to $350 million and Quest's market cap up to almost $250 million.

But both projects are located in remote regions of Canada, with no infrastructure in place. The deposits are also very low grade and locked in syenite, an unproven mineral for rare earth extraction.

Analysts say the price tag of developing such a project is too steep for a junior miner, suggesting the only way projects like Nechalacho or Strange Lake will make it to market is if a major end user like Toyota Motor Corp <7203.T> were to buy out the company and develop the mine at a loss.

Ecclestone doesn't see that happening.

"We have to brush away a delusion here," Ecclestone said. "Most of these companies think that they're going to get taken over, but most of them won't be."

He sees one or two deals happening from within the industry, with Molycorp and Lynas circling the juniors looking for the best heavy rare earth asset. Once those deals have happened, there won't be any suitors left.

As for the rest, just like Amalgamated and its Monmouth Mine back in the 1980s, "the dance may be over".

And once the dust settles, many of these "promising" rare earth properties will end up being nothing more than a moss-covered reminder of the promise of the next mining gold rush.

($1=$1.00 Canadian) (Additional reporting by Richard Lee, Ruben Ramirez and Rhonda Schaffler in New York, Kei Okamura in Tokyo, Lucy Hornby in Beijing and Lucy Yuriko Thomas in Hong Kong; Editing by Edward Tobin and Frank McGurty)