This article was brought to my attention from one of my sources, it is well written, but keeping in mind, that I attended many many talks in the last few weeks on the company's in the area.
It is my opinion and of others more qualified than myself, that Pfn is re-writing history as we speak, regarding the rock formations, and proven drill results. It is important to note that most think East Bull Lake and River Valley are the same rock formations, so far this is not true, but there are ongoing reports being written as we speak. Just my opinion.
Regards
G
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March 13, 2000
by Carolyn Pritchard
North America's platinum and palladium (PGM) "gold rush" is attracting
increasing levels of interest from
South Africa's giant mining companies, leading to speculation that more
deals with U.S. and Canadian junior
mining companies could be in the offing.
Impala Platinum Holdings Ltd. (Implats) and Anglo American Platinum
Corporation (Amplats) - the world's
largest platinum producers - held court in Toronto last week at the Mining
Millennium 2000 International
Convention and Trade Exhibition.
At least one mining consultant is suggesting that the two South African
companies - dismayed by increasing
levels of government corruption at home - are seeking to add to North
American relationships initiated less than
a year ago.
Mining consultant Jim Bond, who is also a board member of mining junior
Donnybrook Resources Inc. (CDNX:
DNY), said he was surprised by the number of high-level executives holding
court at the booths of S.A. mining bigwigs like Amplats and Implats. He is
certain they were seeking opportunities among the juniors.
"What the major companies are looking for is twofold: They are looking for
companies with 'prospective properties', in the sense that they have the
prospects of generating large, long-life ore bodies," Bond said. "And they
are looking at companies with access to specialized technological
expertise. So if you wish to speculate on junior PGM companies' stocks, my
advice would be: See who the
technical brains behind the outfit are."
Spot prices of precious metals platinum and palladium have recently been
hitting all-time highs. Platinum futures
(April) were at $470 an ounce this morning. Demand is expected to outstrip
supply over the next decade.
The increasing demand for PGM metals - platinum group elements, of which
platinum and palladium are both
members - is due largely to the hopes being pinned on fuel-cell technology.
The zero-emission fuel cells require
platinum and palladium in order to function. And U.S. government legislation
is putting the need for
zero-emission vehicles into law. By the year 2003, 10% of all new vehicles
sold in California, for example, are
required to be zero-emission.
According to Johnson Matthey's latest semi-annual platinum review, demand
for palladium in 2000 was
expected to rise by 205,000 oz. to a new high of 8.3 million oz. But with
Russia expected to supply just 5
million oz., supplies were predicted to fall by 730,000 oz. to 7.67 million
oz.
Russia supplied approximately 65% of the world's mined palladium in 1999 and
16% of the world's mined
platinum. But three months into 2000, Russia's acting president Vladimir
Putin has still failed to determine the
nation's new and badly-needed output policy on palladium. By all accounts,
its stockpiles are dwindling.
South Africa, on the other hand, supplied approximately 75% of the world's
mined production of platinum and
25% of the mined palladium in 1999.
Johnson & Matthey estimated that world supply of platinum in 1999 would fall
340,000 oz to 5.06 million oz. And
they further estimated demand would rise 200,000 oz to a new high of 5.59
million oz, rendering a world supply
shortage of 530,000 oz.
South Africa still has the world's largest geological potential for platinum
and palladium - but the conuntry's
mining industry is beset with a host of social and economic problems.
Growth is stagnating due to an increase in alleged high-level corruption. It
is crippling the South African mining
industry. Corruption forced a net outflow of 2.8 billion rand (US$465
million) of foreign direct investment from the
country in the first half of 1999 alone.
So far, President Thabo Mbeki, head of the African National Congress (ANC)
since June 1999, has done little to
rectify the situation. Labour laws designed to protect workers have
backfired. Hiring and firing practices have
been rendered prohibitively expensive, bringing expansion and restructuring
to a standstill.
No one is more acutely aware of these problems than South Africa's mining
industry. Slowly, the biggest
players are coming overseas to set up shop with North American juniors.
On Dec. 14, Implats announced it had formed a joint venture with Mustang
Minerals Corp. (CDN: O.MMIN). The
project, called the Mustang-Implats River Valley Joint Venture, grants
Implats the right to earn a 60% interest in
511 mining claim units in the River Valley intrusion, found 50 km west of
Sudbury, Ontario. The deal was valued
at C$6 million. Shares of Mustang trade in a 52-week range of C$0.30-$1.10.
They closed at C$0.80 Friday on
the Canadian Dealing Network.
A similar deal exists between Amplats and Canadian junior Pacific North West
Capital Corp. (CNDX: PFN). The
two announced a joint venture on Aug. 4. Details of the agreement grant
Amplats' subsidiary Kaymin Resources
Ltd. an interest ranging from 50% to 65% (depending on level of involvement)
in specific properties held by
Pacific North West, also in the River Valley region of Ontario.
Shares of Pacific North West trade in a 52-week range of C$0.38-$1.50. They
closed Friday at C$1.11 on the
Canadian Venture Exchange.
Bond points to the growing number of juniors taking up the search for
platinum and palladium.
"If you have been following the junior mining industry closely you would
have observed that practically every
issue of The Northern Miner has a release from some other company that the
company has just acquired a
platinum-palladium project - wherever - and plans to aggressively explore it
this year." He said. "It is becoming
the flavor of the month."
But despite his own extensive research on the PGM industry over the past few
years, he is taken aback at the
enthusiasm within the financial community to bankroll platinum and palladium
exploration companies. He
believes few of these juniors will reap significant results.
"At this point, there are a limited number of companies with geologically
attractive properties," said Bond. "There
are a large number of companies with platinum and palladium properties, that
based on their general geology, do
not have sufficient size of ore body to be attractive to a major mining
company. Those companies will
undoubtedly secure financing through the Canadian exchanges and they will
quite possibly benefit their
shareholders. But it's extremely unlikely they'll find a major mine."
But some just might. Vancouver junior Anooraq Resources Corp. (CDNX: ARQ)
recently entered into an
agreement with another South African miner, Pinnacle Resources Inc. On Jan.
25, Anooraq received regulatory
approval to acquire rights to purchase up to 100% of Pinnacle's subsidiary,
Plateau Resources (Pty) Ltd.
Plateau holds PGE properties on South Africa's most coveted natural
formation: the platinum-rich Bushveld
Intrusive Complex. Plateau's holdings are known as the Platreef Properties.
Anooraq began drilling on them in
early February. Shares of Anooraq, which is operated by Hunter Dickinson
Inc., trade in a 52-week range of
C$0.77-$2.10. They closed Friday on the CDNX at C$1.60.
There are two purely North American juniors that warrant a mention as well.
The first is North American
Palladium (TSE: PDL). The company operates the Lac des Iles mine, Canada's
only open pit palladium mine
and, moreover, the country's only primary producer of PGE. On Jan. 6, N.A.
Palladium announced a C$126.5
million expansion of the mine. It reported results of a study showing a new
mineable proven and probable reserve
of 74.2 million tons with an average grade of 1.64 g/t of palladium and 0.18
g/t of platinum. The company's
shares trade in a 52-week range of C$0.95-$12.50 on the Toronto Stock
Exchange. They closed Friday at
C$10.20.
And finally, there is Idaho Consolidated Metals Corp (CDNX: IDO). At the end
of February, Idaho Consolidated
announced a joint venture with Chrome Corporation of America, a subsidiary
of Boulder Group NL, to explore
PGM in the Stillwater Complex in Montana. The complex is the largest
PGE-producing area in North America.
Idaho Consolidated laid claim to every square foot not already staked out by
large cap Stillwater Mining Corp.
(AMEX: SWC). Although some experts claim that SWC holds all possible
PGE-bearing ground in the area, the
possibility of one small find could make Idaho Consolidated worth the
gamble. |
