hina will impose mining quota on the rare metal molybdenum beginning in 2011 as the
Chinese Ministry of Land and Resources plans to list molybdenum as a special metal put
under protective mining, following gold, tungsten, tin, antimony and rare earth.
The news late Thursday night, early Friday morning that China was
putting molybdenum on their special metal list beginning in 2011 was
the spark that was needed to eventually set the stage for a long-awaited
rally in molybdenum prices. China currently produces over 30% of
the world's molybdenum. As we saw in the Spring of 2007, a solid
move up in molybdenum prices resulted in many of the Canadian
molybdenum juniors experiencing 500% - 1,000% gains in a 3-4
month period. It's hard to tell if we will experience these lofty gains
this time around but the stars are aligning (favorable period for juniors
November – March, strength in China, moly juniors stock prices at
bear market levels, no hype, etc) such that I will be allocating 30% of
my high risk portfolio into this sector. I picked up a few shares of three of these companies on Friday and will
purchase more in the next few weeks.
Moly prices have been on an upswing over the last few months and appear
set to break the post-financial crisis high of $18-$19 which is still far below
the peak levels it reached in the Spring of 2007 in the $35-$40 range.
Copper has been seeing large gains over the past year while molybdenum has
lagged considerably but that situation looks to correct over the next several
months.
Of the five stocks I am profiling, I was invested in three of them during the
2007 run-up so I know how violent the upside can be as well as the severity
of the corrections. If after doing your own research you decide to take a
position in one of these stocks or any of the other moly juniors, it's critical to
sell half of your position once the stock doubles from your entry point.
These plays will be volatile so if you can play with the houses money you
will reduce your risk considerably. What I learned from 2007 was that you needed to act quickly, especially in
some of the tighter share structure stocks as they will move up and you will find yourself chasing these stocks
which is never a wise investing strategy. As you'll see in the next few pages, the three stocks (CYU, CBS, TTQ)
that were around in 2007 and have large, potentially economic deposits are all in bear market territory although
some small amount of volume came into the stocks late on Friday. The two relatively new stocks that I profile
(NRC, KSM) I had to scramble to research as these are new names but both offer intriguing value as I see it.
The summaries on the next few pages aren't as comprehensive as some of my regular issues tend to be but I
wanted to get this into your hands as quickly as possible. I would still do your own research as always but keep
an eye on this sector and be ready to move if you see the volume coming into these shares as I expect over the
coming weeks.
Thanks as always for reading and good luck on your investing decisions.
Vince “Stateside” Marciano
November 1st, 2010
Columbia Yukon (CYU.V)
Current Share Price (10/29/10) - $.18/share
Outstanding Shares – 42 million
Current Market Cap - $8 million
Website: http://www.columbiayukon.com/
Here's a summary of their property:
Columbia Yukon Explorations is a mineral exploration company. Its most advanced property is the Storie
molybdenum deposit located near the historic mining camp of Cassiar, B.C. The Storie deposit has a February
2009 NI 43-101 compliant Indicated and Measured Resource of 139.82 M/tonnes grading 0.064% and 58.39
M/tonnes of Inferred Resource grading 0.059% Mo at a 0.030% cut off.
As you can see in the chart above, the stock reached over $2.50 in mid-2007 but has remained comatose since
the end of 2008. There is no hype or speculation in the stock yet but as you can see in the chart, when it moves
it will move fast.
News flow will be important and they just started a drilling program so we can expect news over the next month
or so:
September 21, 2010
West Vancouver, British Columbia – September 21, 2010 – Columbia Yukon Explorations Inc. (the “Company” or “Columbia Yukon”) is pleased to
report that it has commenced a drilling program for its “Storie” Property molybdenum deposit located near Cassiar, British Columbia.
A road rehabilitation, exploration and trenching program is now underway on the south slope of the known deposit to determine whether the recent
discoveries of outcrops containing high grade molybdenum (as referred to in the Company’s news release dated December 2, 2009) warrant further
exploration. The second objective of the current exploration program is to core drill to test the northern boundaries of the known deposit to determine
whether molybdenum mineralization extends beyond that point.
They just closed a private placement for $.15 so they are fully funded for this drill program.
TTM Resources (TTQ.V)
Current Share Price (10/29/10) - $.30/share
Outstanding Shares – 52 million
Current Market Cap - $15 million
Website: http://ttmresources.ca/
Here's a summary of their main property – Chu:
The Company has received an updated Resource Estimate from Giroux Consultants Inc., of Vancouver, B.C.
The revised estimate was calculated by incorporating the 2009 and 2010 drilling campaigns (13 drill holes
totaling 5,894 meters) that occurred subsequent to the previous resource estimate announced in the Company’s
Feb 27, 2009 press release, which incorporated all holes drilled to the end of 2008. The Mineral Resource
Estimate at the Company’s 100% owned Chu Molybdenum project using a 0.04% Mo cutoff now stands at:
Measured 159 million tonnes at an average grade of 0.061% Mo and 0.035% Cu (214 million lbs molybdenum,
122.8 million lbs copper), Indicated 211 million tonnes at an average grade of 0.057% Mo and 0.035% Cu
(265.9 million lbs molybdenum, 163 million lbs copper), and Inferred 256 million tonnes at an average grade of
0.052% Mo and 0.036% Cu (294.2 million lbs molybdenum, 203 million lbs copper). The Measured plus
Indicated resource totals 370 million tonnes at a grade of 0.059% Mo and 0.035% Cu (482.2 million lbs of
molybdenum, 286.1 million lbs copper). The Measured and Indicated resource tonnage has increased by 18%
while the contained molybdenum and copper have increased by 16% and 12% respectively over the previous
estimate.
As you can see in the above chart, TTQ's share price was over $1.50 three times in 2007 but has languished
since late 2008.
They just closed a financing with the Mineral Fields group at $.28 for $2 million to fund geotechnical drilling
and further exploration at Chu so they are fully funded for the upcoming program.
Bard Ventures (CBS.V)
Current Share Price (10/29/10) - $.08/share
Outstanding Shares – 97 million
Current Market Cap - $8 million
Website: http://www.bardventures.com/s/Home.asp
Here's a summary of their main property – Lone Pine:
Project Highlights:
- 0.02% Mo Cutoff = 179 Million Tonnes @ 0.07% Mo
- # An onsite BC Hydro Substation able to supply industrial strength power.
- Claims are adjacent to highway 16 which provides obvious transportation benefits through all phases of
development
- Local work force and accommodations lower exploration costs dramatically
- Recent high-grade Molybdenum discovery in the Alaskite Zone
- Potential to discover a large tonnage high-grade deposit that would be attractive for either organic growth or
potential sale.
- Gas pipeline onsite available for future use.
News flow should be strong based on the recent press release:
October 25, 2010
Bard Ventures Ltd. ("Bard" or the "Company") is pleased to announce that the Company has engaged
P&E Mining Consultants Inc. ("P&E") of Brampton, Ontario to complete an independent National
Instrument 43-101 - Preliminary Economic Assessment ("PEA") for its Lone Pine Molybdenum, Copper
and Silver project near Houston, British Columbia.
The P&E team will be mobilized and commence field work on November 1, 2010 and initial schedules indicate that the PEA will be completed during
the first quarter of 2011. The PEA will determine a preliminary open pit mine design and estimate capital and operating costs. The PEA will also
include a financial analysis based on reasonable assumptions about each of the foregoing factors and other technical and economic factors. This
PEA will be the first disclosure of potential project economics for the Lone Pine Property.
"We are very optimistic that this PEA will greatly assist us in raising the capital necessary to move the Lone Pine project forward", said Eugene
Beukman, President and Chief Executive Officer of the Company.
The Company is also continuing with its follow-up exploration program to test the Zone 61 discovered earlier in 2010 and potentially extend the
existing mineral resource that will be the subject of the PEA.
NMC Resources (NRC.V)
Current Share Price (10/29/10) - $.18/share
Outstanding Shares – 132 million (91 held by parent co.)
Current Market Cap - $25 million
Website: http://www.nmcresource.com/s/Home.asp
I was looking for an unknown moly production story to immediately capture the upside price in any moly move
and I found it with NMC Resources. As you can see above, they are a new public company with a brand new
moly production facility in South Korea. They are 70% owned by parent company Dong Won Resource Group
and have the only moly production facility in South Korea and Japan – making them the most leveraged to the
opportunity that China has presented them. Below are the key highlights of their facility:
Project Highlights
• Commenced commercial production in April 2010 - Milling average of 800-1,000 tonnes per day
• The only molybdenum mine in South Korea and Japan - Every year, approximately 20% of world moly output
is consumed between Korea and Japan
• Easy access to markets in China and Japan
• High-grade molybdenum deposit - MoS2 mill head grade of 0.30%
• Close proximity of ore body to the surface
• Great resource expansion potential in and around current mining area
• Extremely low capital expenditure which guarantees short investment return - NMC's capital expenditure on
the Mine: $20 million as of the end of 2009 - Same size mine setup in British Columbia: $60 million to $100
million
• Modern and efficient mine structure which guarantees low operating costs - No need for tailings dam: Saving
significant expenditure - Tailings from NMC mine are sent to nearby cement makers eliminating the need of
tailings dam - eliminating the environmental liability - Mining labour cost in South Korea is less than half of
what it cost in North America.
What I found astonishing is that they were profitable in their 1st quarter of production (April – June of this year)
with a cash cost of $7.23/lb of production and a selling price of over $15/lb. Either they were smart or lucky but
they decided to lock in prices with their smelter customer for only a six month period to allow them the
opportunity to take advantage of rising prices so they will be fully leveraged to a rising moly price.
As I mentioned, they have 132 million shares out with 70% of these shares held by their parent company so the
float is actually less than 45 million shares. There are also 91 million convertible preferreds outstanding with
their parent company owning 70% of these as well.
Below are a few pictures of their production facility completed early this year:
They are also an exploration story as they just released assays from one hole of a seven hole program where
they may have uncovered a porphyry system that could substantially increase the size of the deposit. More
results will be released in the coming weeks. Below is the press release:
2010-09-22 09:15 ET - News Release
Mr. Do Hyung Kim reports
NMC RESOURCE CORPORATION: MINE POTENTIAL EXPANDED BY DEEP DRILLING
NMC Resource Corp.has released the first assay results from one of seven deep drill holes (for a total of 1,001 metres) completed to test the downdip
extent of the molybdenum mineralization below the mine workings at the NMC Moland mine in South Korea.
In hole NMK 10-06, two skarn-type zones were intersected as well as 35 metres of porphyry-type mineralization, which has the potential of being a
wider and more consistent grade of mineralization than the skarn-type of ore presently being mined. This intersection occurs in NMK 10-06 between
135 and 170 metres beneath the deepest of the three current mine levels (217-metre level). The true thickness of the mineralization is approximately
66 per cent of the core intersection. However, the true thickness will be better determined after further drilling.
A technical report on the NMC Moland mine dated Oct. 8, 2009, prepared by R.S. Middleton, PEng, in compliance with National Instrument 43-101
Standards of Disclosure for Mineral Projects and filed on SEDAR on Nov.19, 2009, estimated an inferred resource of 1,726,299 tonnes with the upper
two levels (above the 257-metre level) at an average grade of 0.366 per cent MoS2 (molybdenum disulphide) with a 0.1 per cent cut-off. A clean
molybdenum concentrate is produced since there are no other sulphide minerals in the deposit. This makes a highly valued product for the steel
industry.
HOLE NMK 10-06
Interval (metres) W (metres) % MoS2 % Mo pounds Mo/tonne
12 - 28 16 0.2429 0.1457 3.205
75 - 79 4 0.1523 0.0914 2.011
135 - 170 35 0.3045 0.1826 4.017
Present production comes from the upper two levels (310-metre level and 257-metre level) which are the upper 100 metres of the mine. Infill drilling
between the second (257-metre level) and third Level (217-metre level) has also been carried out to expand and define or classify the resource. The
projected downdip depth of mineralization is now 400 metres from surface and is open to depth. Therefore, the area for new resource discovery has
tripled from the present resource area.
Commercial production at the NMC Moland mine commenced April, 2010. To the end of the second quarter ended June 30, 2010, NMC Resource
sold 118,300 pounds of molybdenum out of 199,827 pounds of production with cash cost at $7.23 (U.S.) per pound of molybdenum. Eighty-one
thousand, five hundred twenty-seven pounds of molybdenum were retained in inventory for a better market price. During this period, the first quarter
of sales, NMC Resource recorded $356,624 as earnings from mine operations.
Assaying for the 2010 drill core has been carried out by ALS Chemex in North Vancouver, B.C., where one-fourth split cores were shipped by secure
courier for preparation at the Chemex Lab. Assaying was done with acid digestion and ICP MS analysis. One blank and two standards were used for
every 36 samples to maintain quality control.
Supervision of the drilling and quality of the sampling and assaying is being done by Mr. Middleton, PEng, who is acting as the qualified person for
NMC Resource.
Assaying of six other deep drill holes will be done over the next month, and confirmation assays on 35 infill holes from the area between the 217-
metre and 257-metre level will also be carried out in Canada over the next 60 days.
I spent quite a bit of time this weekend looking at this company and feel that they may be poised to capture a
significant portion of the speculator's money over the coming four to five months “if” the moly story unfolds as
it did in 2007. As always, please take the time to review this story before considering an investment.
Kingsman Resources (KSM.V)
Current Share Price (10/29/10) - $.12/share
Outstanding Shares – 27 million
Current Market Cap - $3 million
Website: http://www.kingsmanresources.com/s/Home.asp
As with any speculative cycle, there is always a
new kid on the block that grabs the speculator's
attention due to a new discovery just as the
frothy stage kicks in. Kingsman may be that
company as drilling began mid-October on their
Luxor property and through hard work and a
little bit of luck, the potential for a new moly
discovery has risen in recent months.
Kingsman had already outlined a fairly large
cohesive soil geochemical anomaly measuring
approximately 1 kilometre long by 450 metres
wide by 2009. Then this Summer they began
excavation on a 1.8 km exploration access trail
to the drill site and they uncovered molybdenum
bearing altered granitic rocks over
approximately 200 metres in newly exposed rock cuts. Molybdenite occurs as fine disseminated grains within
the intrusive rocks and importantly within quartz veins with pyrite. Coarse aggregates of molybdenite are seen
both as selvages to and within quartz veins. Selected samples of quartz vein material returned up to 2.59% Mo.
Hundreds of pictures are available for viewing at http://www.kingsmanresources.com/s/LuxPhotos.asp.
As always, these exploration plays are news driven and news should be just around the corner as outlined in
their most recent press release on October 8th -
Kingsman Resources to drill at Luxor Oct. 15
2010-10-08 15:31 ET - News Release
Mr. Robert McLaughlin reports
DRILLING TO COMMENCE ON LUXOR MOLY PROPERTY
Kingsman Resources Inc. has provided information on the start of a diamond drill program on the Luxor molybdenum project, located 27 kilometres
northeast of Barriere, B.C. The diamond drill program should begin on or about Oct. 15. R.J. Beaupre Drilling Ltd. will carry out the drilling.
An initial program of approximately 1,000 metres of NQ core is planned with possible expansion to 2,000 metres. This drill program will test recently
exposed molybdenum-bearing altered granitic outcrops discovered during trail construction. Molybdenite was found to occur as fine disseminated
grains within the intrusive rocks and importantly within quartz veins with pyrite. Coarse aggregates of molybdenite are seen both as selvages to and
within quartz veins. Selected samples of quartz vein material returned up to 2.59 per cent Mo. These exposures occur within a cohesive soil
geochemical anomaly measuring approximately one kilometre long by 450 metres wide.
In November, 2007, Kingsman undertook a small diamond drill program on the Luxor property. Four short holes were completed. Significant results
included three metres of 925 parts per million Mo (0.0925 per cent Mo) and six metres of 420 ppm Mo (0.042 per cent Mo) in LX07-0, and 1.3 metres
of 676 ppm Mo (0.0676 per cent Mo) and six metres of 301 ppm Mo (0.0301 per cent Mo) in LX07-02. These holes were drilled approximately 600
metres north of the current planned program.
Recently Kingsman commissioned professional prospectors to investigate the area in and around the newly discovered mineralized road outcrops.
Molybdenite-bearing outcrops were discovered over an area of approximately 1.3 kilometres by 0.9 kilometre. Twenty-five rock samples were
collected. Molybdenite was found to occur in quartz veinlets, quartz stockworks, fractures, rosettes and disseminations within altered granitic hosts.
Mo Mo Mo Mo
Tag No. ppm % Tag No. ppm %
WP5 212.00 WBM10 346.60
WP7 Luxor 1011.00 0.101 WBM11 822.20 0.081
WP13 Luxor 610.20 0.059 WBM16 1833.00 0.185
WP36 Luxor 9.34 WBM17 1036.00 0.103
WP37 43.54 WBM18 464.10
WP38 Luxor 8.92 WBMK1 >2000 0.210
WP45 113.40 LXSK1 A 1463.00 0.148
WBM1 117.60 LXSK1 B >2000 0.221
WBM2 >2000 0.258 LXSK2 927.00 0.091
WBM3 1259.00 0.128 LXSK3 A >2000 0.278
WBM5 618.10 0.063 LXKS3 B 1053.00 0.109
WBM6 307.50 LXSK4 827.00 0.083
WBM8 200.10
Significant values including 0.278 per cent Mo and 0.258 per cent Mo were obtained from selected samples. Prospecting results confirm and enhance
the molybdenite occurrences discovered during trail construction. Exploration evidence at Luxor now points to a mineralizing system that is 2.2
kilometres east to west and 1.5 km north to south. This is supported by rock geochemistry, biogeochemistry, stream sediment geochemistry and
drilling.
Resource World did a nice summary write-up on them in their September issue which you can read at the
following link: http://www.kingsmanresources.com/i/pdf/RW8-9Kingsman.pdf. As you'll see on their website,
they had a team of over 20 geologists working the site this Summer which leads me to believe they think they
are on to something big. They just closed an 8 million share private placement at $.08 and are fully funded for
this current drill program.