Zimtu's Commerce Resources in Dow Jones article
Zimtu Technologies Inc ZTU
Shares issued 23,648,415 2001-04-16 close $0.08
Tuesday Apr 17 2001 News Release
Mr. Michael Piek reports,
Commerce Resources Corp., Avalon Ventures Ltd. (V.AVL), Leader Mining International Inc., (V. LMN) and Haddington International Resources Ltd. (V. HDN) included in tantalum article.
Commerce Resources Corp. a subsidiary of Zimtu Technologies Inc., highlighted in article distributed by Dow Jones Newswire.
Excerpts from the article appear in italics below:
"CDNX Focus: From Mining To Internet And Back"
By Stuart Weinberg of Dow Jones Newswire
"Toronto (Dow Jones) - Here's a twist: a junior Canadian mining company that abandoned mining for the Internet is going back to mining. Vancouver-based startup Zimtu Technologies (V.ZTU), which was known as Rocca Resources Ltd. in a prior incarnation, plans to re-enter mining..." through its subsidiary Commerce Resources Corp. Zimtu remains strictly focused on Internet privacy.
"Ironically, the return to the old economy was prompted by a rare metal whose new popularity comes from its use in new-economy products. The metal is tantalum, the main ingredient in capacitors used on circuit boards to store, filter and regulate electrical energy and current flow. Capacitors are found in cellular phones, personal computers and game consoles.
"Last year, tantalum shipments were four million pounds, double the 1992 level, and the heightened demand pushed tantalum ore spot prices to previously unseen levels.
"According to the U.S. Defense Logistics Agency, one of the few reliable sources for the price of tantalum, the spot price of tantalum ore went as high as $364 (U.S.) a pound in December. In 1999, the spot price was about $40 (U.S.) a pound.
"Still, the window of opportunity for Commerce Resources may not be very wide. Demand for tantalum is down in 2001 due to the slowing economy. And supply appears poised to increase as many companies attempt to jump on the tantalum bandwagon, while the world's largest producer of tantalum, Sons of Gallia Ltd. (A.SGW) has increased production.
"In short, depending on how exploration and demand metrics play out, Commerce Resources is either on the cusp of developing a lucrative tantalum mine, or going the way of Zimtu Technologies, currently trading at eight Canadian cents on the Canadian Venture Exchange.
Bought software from high-school student
"Zimtu was created in 1999 when Rocca Resources, like many other Canadian junior mining companies, left mining for the sexy world of the Internet. In a much-publicized deal, Rocca bought the rights to Internet privacy software created by a 15-year-old Chicago high-school student. The company changed its name to Zimtu and put its mining assets into a private company, called Commerce Resources. Things went well for a time. Shares of the new software company climbed from 40 Canadian cents in October, 1999 to a high of $2.34 Canadian in March, 2000.
"But in April, the market for Internet concept stocks turned ugly, and it hasn't recovered. Around the time that Rocca was morphing into an Internet startup, David Heyman, a director of Commerce Resources, staked a 17-square-kilometre patch of land in southeast British Columbia. It was the fifth time in the past 25 years that Mr. Heyman had claimed this piece of property, called Blue River.
"Exploration at Blue River over the past 25 years has outlined a resource estimate of 3.8 million tons, with an average tantalum grade of 228 grams a ton. In comparison, the grade at the world's largest tantalum mine, the Greenbushes mine in Australia owned by Sons of Gwalia, is 290 grams a ton. Commerce officials say previous testing at Blue River was done on just a small portion of the property, so the grade could rise.
"Blue River has other attractions. First the tantalum deposits appear to be near the surface, so they will cost less to recover. Second, a rail line and a highway pass through the property, so the infrastructure is in place. Third, the tantalum is hosted in soft carbonatite rock, making it relatively easy and cheap to extract.
"Tantalum is usually found in much harder pegmatite rock, as with the Greenbushes mine. Yorkton Securities analyst Art Ettlinger said he considers Blue River the most promising tantalum project in Canada. "It sounds to me like it's a legitimate project," he said.
Price of tantalum the key
"But Ettlinger expressed the one concern over which Commerce Resources has little control. "The problem I have," he said, "is I have no idea what the price of tantalum is going to be down the road."
"On the four previous occasions that Mr. Heyman, the Commerce Resources director, had staked claims to Blue River, the project languished because there was little profit in mining tantalum. But that was before tantalum's price surged because of its new-economy uses.
"These days, many Canadian mining companies are exploring for tantalum. They include Avalon Ventures Ltd. (V.AVL), Leader Mining International Inc., (V. LMN) and Haddington International Resources Ltd. (V. HDN). Meanwhile, Sons of Gwalia, which accounts for about 25 per cent of the world's tantalum supply, is spending $100-million (Australian) to expand its western Australia production facilities.
"While the supply of tantalum ore is set to increase, demand and prices are falling. According to Ryan's Notes, a trade publication, the average spot price for tantalum was $209 (U.S.) in February and poised to drop further. Still, spot prices remain considerably above the $40 (U.S.)-a-pound level from 1999. As long as the price stays above $100 (U.S.) a pound, the Blue River project has tremendous economic potential, said Jody Dahrouge, a Commerce Resources director and geologist, adding that a number of large mining companies have expressed an interest in Blue River."
Disclaimer
The foregoing is excerpted from an article that appeared in Dow Jones Newswire. The article does not constitute any representation on the part of Commerce Resources Corp. that it will be listed and posted for trading on an exchange or quoted on any quotation and trade reporting system or that application has been made to list and post the shares of Commerce Resources Corp. on any exchange or quote the shares of Commerce Resources Corp. on any quotation and trade reporting system. Further, Commerce Resources Corp. has made no such representation nor has it made any representation regarding the potential price of Commerce Resources Corp.
Commerce dividend
As previously announced, Zimtu Technologies Inc. intends to issue as a dividend, one million shares of its subsidiary, Commerce Resources Corp. to shareholders of record on Jan. 28, 2000.
Current shareholders will benefit from the dividend through Zimtu
Current and future Zimtu shareholders will participate in Commerce through Zimtu. Zimtu will receive an additional two million shares of Commerce as consideration for monies Zimtu has advanced or spent on Commerce's behalf from the record date until now. The Commerce shares held by Zimtu will be sold or retained at the discretion of the board of directors. Zimtu will own in excess of 10 percent of the outstanding shares of Commerce; the company will be deemed an insider of Commerce and will file insider reports accordingly.
The Canadian Venture Exchange has neither approved nor disapproved of the foregoing information.
(c) Copyright 2001 Canjex Publishing Ltd. canada-stockwatch.com |
