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Gold/Mining/Energy : Houston Lake Mining [HLM-ASE]
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To: DRT who wrote (284)1/18/2000 8:57:00 PM
From: DRT   of 364
 
Tib Lake (palladium) and Pakeagama Lake (tantalum, cesium, rubidium, germanium, niobium, thallium, etc.) are interesting properties given the rising demand and price scenarios for those commodities. In both cases, HLM has significant potential for a discovery - the investment risk is minimal compared to most PGM and rare metal plays (with a market cap of <$3 million and very significant results to date on both properties). Exploration programs in early 2000 on both properties (via JV or equity financing) would certainly be timely in light of the demand-price scenario for PGMs and rare metals.

Vertical integration (companies that are both producers and end users) in the rare metals sector is well documented. At some point along the path to mine development, the involvement of an end user will be required in order to remove the market risk and facilitate development financing. The earlier the involvement the lower the risk to shareholders. With some end users looking at high-risk projects in developing countries, Pakeagama Lake should certainly be on their radar.

As for PGM exploration, we have seen the JV involvement of South African producers (Amplats and Impala) with Canadian exploration companies in Ontario; others have raised equity for exploration by whatever means possible; still others have pursued ventures in South Africa (Bushveld Complex) and elsewhere in search of this rare but valuable commodity. One can only hope that palladium at US$440/oz and the recent attention being given to North American Palladium would be enough incentive to leverage the required financing on Tib Lake; the results to date certainly justify a comprehensive exploration program.

So, there you have it - all my commodity picks tied up in one company.

DRT
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