Some detailed due diligence from Stockhouse. First of two parts...
I think it's time to discuss Tres Marias in some detail. We should take a look at what we know about production issues and a possible time line for development. The history and particulars of Tres Marias are quite well documented on the Britton Capital and Tombstone web sites so I'll recount only the most important facts here.
The Main Pipe at Tres Marias was mined intermittently from 1949 until 1992 and produced about 125,000 tons of oxide and sulphide ores. It was always a small operation producing a maximum of about 6000 tons of ore per year. The market for germanium was quite small in those days. The mine was shut down because the last smelter in the US capable of extracting germanium was closed in 1992 for environmental reasons. More about smelters in the next post.
Germanium exists at Tres Marias in two forms, oxide germanium and sulfide germanium. Sulfide germanium exists in far greater quantities than oxide germanium. The oxide germanium is an oxidated form of the sulfide type and exists to a depth of about 100 meters. Oxide germanium was the variety produced in past workings.
Tres Marias has never been fully explored and actual resources and reserves have not been determined to a great extent. A previous owner, Zinc National, determined that there were 150,000 tons to 250,000 tons of oxide ore and stopped exploration after 500,000 tons of sulphide ore reserves were proven. They subsequently mined 35,000 tons of oxide ore leaving about 100,000 tons to 200,000 tons. The sulphide ore has never been exclusively mined. Various explorations of Tres Marias indicate that sulfide ore exists in quantities of at least 500,000 tons to estimates of 10,000,000 tons and higher with grades of 200-400 g/ton of germanium. I would expect that each 10 years of production would require about 500,000 tons of ore so it looks like Tres Marias's longevity is not in question. However, exploration is needed to determine exact long term reserves and to develop a plan for continuous mining of the area.
The germanium market has grown substantially in recent years causing stockpiles to diminish. In 1987 the US National Defense Stockpile goal was set at 146,000 kg. This stockpile has since diminished to less than 50,000 kg owing to greater and greater demand. With increased consumption of germanium in fibre optic cables, infrared imaging systems, satellite solar panels and the new IBM SiGe chips, there is need for a more secure supply base for germanium. The diminishing ND Stockpile, the fragmented nature of the germanium supply base and the diminishing recycling of germanium have also created a need for a major new supplier. Tres Marias will be that supplier.
Since there is only one substantial refiner of germanium in North America, Eagle Picher, one would expect that War Eagle's germanium would be sold to them. The other, much smaller refiner, is Cabot Corporation. We should note that Cabot is one of the two main tantalum refiners. Cabot could thus be of considerable interest to War Eagle in the not too distant future. Eagle Picher processes germanium from several sources including reprocessed scrap, fly ash, germanium concentrates and semi refined germanium materials, according to the USGS. The semi refined material is germanium tetrachloride of which I'll write later.
The opportunity for War Eagle with its Tres Marias property is to fill the emerging germanium supply shortfall and to rationalize the fragmented supply base for Eagle Picher and possible other buyers of germanium. With that in mind, the next installment will look at how that might be accomplished.
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