Hello Brumell
The following was culled off Aquiline's AR:
Putin and Palladium: A Summary of the Palladium Markets
The election of Vladamir. Putin as the second president of the Russian Federation will challenge
the precious metals bureaucracy in Moscow. As acting president, Putin signed the decree that
removed an 18 month obstruction to the export of palladium. Russia withdrew as a 70% supplier
of the world's palladium supplier in late 1998, and prices escalated over $800.00 per ounce as
world demand expanded. Russia's Gokran (state precious metals committee) and its Central Bank
are the managers of the Soviet Union strategic stockpiles. These stockpiles were developed from
mining output at Norilsk, a massive sulphide deposit above the Arctic Circle that opened in 1942.
Norilsk was the world's leading producer of the platinum group metals until South Africa entered
the market in response to the passage of the Clean Air Act in the United States during 1972.
The mandate for cleaner tailpipe emissions set off a research effort to develop a catalysis
technology. Platinum, Palladium, and Rhodium emerged with superior performance. Other
materials, such as, rare earths and base metals were inadequate in the reduction of oxides of
Nitrogen, hydrocarbons, carbon monoxide, sulphur, and particulates. As the U.S raised
emissions standards, more PGM per converter was necessary. Europe followed with clean air
emission standards, and the demand for the platinum group metals became global.
At the beginning of the 1990s, Palladium was at last protected from lead contamination as
lead-free gasoline replaced the older product. It also had superior high-temperature capability, and
was cheaper than Platinum. The auto catalyst demand for Palladium expanded as a Palladium-only
converter was first developed by Ford. The stage was set for a supply crisis.
Since 1992, the Russian supply was central to price stability. Without Russian exports, a
disruptive defect would appear. In early 1998, the first signals of limits to Russian stockpile
supply appeared in episodes of stop-and-go exports. Russia was out of the market in 1998, and in
June the price exceeded the 1980 record of $285.00 per ounce.
President Putin takes power at a time when world demand for Russian Palladium reveals
an extreme dependence. Toyota has led the industry in pre-emptive manufacturer buying and
stocking. The auto industry must have a stable supply of Palladium for the 2003 models in
which emissions requirements approach zero. Current technology and engineering cannot replace
Palladium except with Platinum; and, the ratio of Platinum to Palladium in the proven ore reserves
of South Africa favor Platinum.
Putin is expected to reveal a macro-economic plan within the next few months. It is antici-pated
that bureaucratic power will be challenged. The Putin team will clear the way for Palladium
exports, but the real question is the availability of Russian supply apart from new mine production
at Norilsk. It is here that Detroit's supply crisis becomes a strategic issue of planning.
The position of this analyst is that Russian stockpiles are approaching depletion, that a
disorderly market will resume after several months of overdue exports, and that the Russians are
warning industrial consumers of the danger of continual dependence on Russian supply.
Substitution of the PGM application in catalytic converter after-treatment of emissions in
cars has vanished from industry expenditures and interest. With the U.S. EPA announcement of
SUV and heavy-duty diesel truck emissions compliance, significantly more PGM metals will be
consumed. The electric vehicle variations, natural gas powered vehicles, and fuel cell powered cars
and trucks are still six or seven years away from mass market choice.
The most likely medium-term response to the absence of Russian Palladium supply is new
exploration and development of mine supply. Low-grade deposits that were discovered but not
developed because of the PGM price in most of the 1980s will attract investment and capital
expenditure. The analogy to oil is appropriate; since super-fields are limited in number and almost
all are known, smaller fields became feasible. The concentrations and rich ores are known; it is the
mini-tonnage geology that should emerge with consumer interest readily available.
Dr. Daniel I. Fine, Ph.D.
Cambridge, Massachusetts March 28, 2000
River Valley
The River Valley layered anorthositic intrusive is located approximately one hundred kilometres
east of Sudbury at about the same latitude as East Bull Lake. It is easily accessible by secondary
roads and logging roads.
At River Valley, Aquiline Resources has purchased or optioned four groups of unpatented
mining claims in the townships of Janes, Henry, Crerar, Pardo, Loughrin and Dana, district of
Sudbury, Ontario. The claims overlie the River Valley layered anorthositic intrusive which hosts
copper-nickel sulfide showings containing platinum group element.
The River Valley properties were acquired for their potential to become a commercial source
of palladium, platinum, and rhodium. Until recently, little work has been done on the River Valley
intrusive prospecting for platinum group elements, although some systematic exploration has been
conducted for copper-nickel orebodies by local prospectors and major mining companies. However,
in 1998 much of the River Valley intrusive was staked by prospectors who were familiar with the
work of the Ontario Geological Service and their discovery of widespread palladium/platinum min-eralization
at East Bull Lake. Subsequently, Pacific Northwest Capital and Mustang Minerals
acquired (from the prospectors) or staked large land positions at River Valley.
In 1999, Pacific Northwest (PFN) carried out a successful prospecting program at River
Valley discovering several heretofore-unknown zones of Palladium/Platinum mineralization. The
recent drilling by Pacific Northwest Capital Corporation at River Valley has been widely publicized
by that company. Their claims are contiguous to Aquiline?s properties on the north, west and south
and have yielded (as of April 27, 2000) seven successful holes locating palladium and platinum
mineralization which, if it continues over several kilometers as is suggested by their IP surveys,
will eventually outline an open pit resource to rival North American Palladium?s Lac des Isles mine.
A complete publication of PFN?s drill results may be found at their website
www.pfncaptial.com but are listed below in abbreviated form for the reader?s convenience.
Figures are in combined grams of gold, platinum, palladium and rhodium over intersects in meters.
Total PGM
Drill Hole Value (g/t) Interval (m)
RV-01 1.83 61.90
RV-02 2.07 48.30
RV-03 2.34 22.85
RV-04 1.60 91.70
RV-05 2.46 29.70
RV-06 1.61 18.40
RV-07 1.67 97.90
3.94 10.40
The drill results and published geophysical data strongly suggest that PFN?s zone of
mineralization extends three hundred meters north (see the Dana North map on page 10) onto
Aquiline?s most northern claim block and hints that mineralization may trend to the south also
onto adjacent Aquiline ground.
At River Valley, Aquiline conducted limited surface mapping and sampling on the claim
block straddling Henry, Crerar and Dana Township in the Fall of 1999. The company is now carrying
out an IP survey on this claim block. Much work remains to be done on this block and the company's
other remaining properties at River Valley.
Geophysics is currently underway on Aquiline?s River Valley properties. As technical
information becomes available, Aquiline will initiate a drill program, which is planned for
sometime this summer.
There are also two maps that appear to be very detailed.
What I find confusing however are the maps, as they seem to contradict the claim maps ITF published in their announcement May 15th. I could be the scale differences, but they both appear to be located at the north extension of the Dana Lake IP anomoly.
Can you or anyone clarify this?
Regards |
