LONDON, June 4, 2020
FN Media Group Presents Oilprice.com Market Commentary
LONDON, June 4, 2020 /PRNewswire/ -- A single event just made an already critical metal that's been cornered by China worth more than ever. For the first time in a decade, SpaceX and NASA last weekend successfully launched a space mission, sending two astronauts to the International Space Station. Mentioned in today's commentary includes: Teck Resources Limited (NYSE: TECK), Turquoise Hill Resources Ltd. (NYSE: TRQ), Agnico Eagle Mines Limited (NYSE: AEM), Pretium Resources Inc. (NYSE: PVG), Magna International Inc. (NYSE: MGA).
While it even lifted shares of companies that had nothing to do with it, including Tesla and Virgin Galactic Holdings, one little-known company hoping to eventually mine North America's only supply of a metal critical to space dominance could also be a major beneficiary of what is now, officially, skyrocketing sentiment.
Now it's gunning for a new title: The company that broke China's monopoly on what is shaping up to be a most valuable critical metal. The critical metal is cesium, and the company is called PowerMetals (PWM, PWRMF) and is sitting on what is hoped to become only the fourth producing cesium mine of its kind in the world. And if so, the only mine of the four that could shift the balance of control of cesium from China to North America.
Not only can cesium be used in ion propulsion systems, with 1 kilogram of cesium used in outer space able to propel a vehicle 140 times as far as any other known liquid or solid, but it could be the game-changer for solar system navigation.
Cesium is a critical element of Global Positioning Systems (GPS). Atomic clocks track vibrations inside cesium to measure time accurately. The same goes for GPS satellites orbiting Earth. It's only because of cesium that they are able to precisely triangulate.
Now, the prospects of deep space make cesium even more critical. Future missions in deep space could navigate the solar system with a form of GPS--and the defining moment will be the successful testing of the Deep Space Atomic Clock.
It will also be a huge part of the brewing "Cold War" with China … but with one North American mining exploration company making progress, the game could change entirely.
The Cesium Power Play
The 'Cold War' with China is being played out on multiple fronts: control of critical metals, dominance over 5G, national security and deep space. All those fronts involve cesium (Cs). After having dropped the ball and allowed China to control almost 100% of the world's supply of cesium, Washington is now stepping up its game.
At the 11th hour, the Trump administration is now bent on reversing the loss of cesium to China, spanning the globe for lower-risk venues with potential reserves, adding cesium to the United States list of critical minerals only in 2018.
Despite the fact that cesium is so strategic, there are only three pegmatite mines in the world that can produce it: Tanco in Manitoba, Bitika in Zimbabwe, and Sinclair in Australia. Two of them, Tanco and Bitika, are no longer producing, and the stockpiles at Tanco and Sinclair are largely controlled by China.
Most notably, PowerMetals owns three of the five known cesium occurrences in the province of Ontario, positioning the company to be a potential North American supplier of the critical metal--at the most critical moment in modern history.
"There is a global shortage of this rare metal and we are very lucky to have found it at our 100% owned Case Lake Property with grades as high as 14.7 % Cs2O," PowerMetals Chairman Johnathan More said in a recent press release.
The company discovered the pegmatites at West Joe Dyke in August 2018, intersecting high-grade cesium mineralization in six drill holes when it was targeting lithium instead.
The 2018 drill program intersected high grade cesium mineralization in six drill holes at West Joe: PWM-18-111, 112, 116, 123, 124 and 126 with up to 14.70 % Cs2O over 1.0 m in drill hole PWM-18-126. Then, in February this year, PowerMetals announced plans to start drilling to explore for the only potential cesium mine that China doesn't already control.
Now, the company's world-class geologist, Dr. Julie Selway, says the three properties the company is drilling are hoped to have similar finds to the strategically important Sinclair mine in Australia.
"They are shipping their resource, which they say is higher than 10% cesium-oxide, and ours have some that are between 12% and 14% of cesium-oxide," Selway, a key geologist for the Ontario Geological Survey during the tantalum boom of the early 2000s, and now VP of exploration for Power Metals, told Oilprice.com.
Power Metals has intersected cesium (Cs) mineralization in 6 drill holes on West Joe Dyke, with "exceptionally high-grade" Li and Ta intervals. They also found Cs mineralization in drill core samples in the first new dyke below Main Dyke, as well as in the drill core in Northeast Dyke.
Right now, they're working to expose, sample and assay that cesium mineralization on the surface outcrops to find more cesium-bearing pegmatite dykes nearby. They hope to find sufficient cesium resource to justify the building of a mine.
If and when that happens, North America may finally get a leg up in the supply of a critical metal required for global technological dominance that will define this century, and a single junior minor will have helped that happen.
From National Security to Deep Space, and Everything In Between
Unlike virtually every other commodity, cesium is immune to the demand-decimating effects of the coronavirus pandemic because it is critical to many aspects of technological advancements, from the 5G revolution, healthcare advances, defense to oil and gas drilling--and even keeping track of time itself.
In healthcare, cesium is a key element in strategic organic chemistry, including in x-ray radiation for cancer treatments, while the oil and gas industry uses it for drilling fluids to prevent blow-outs in high-temperature, high-pressure wells.
It's also a key element in an array of commercial and industrial applications, including catalyst promoters, glass amplifiers, photoelectric cell components, crystals in scintillation counters, and getters in vacuum tubes. But on the 'Cold War' front, it's 5G, weapons and deep space that could affect the global balance of power for centuries to come.
That's a lot of pressure on a critical metal that Washington has taken for granted for so long. If you don't control the supply, you won't win the war. It couldn't be simpler. That fact is setting up a very forward-thinking junior miner with a world-class geologist to step in and try to change the playing field in favor of the West.
With the 'Cold War' already drawing battle lines, investors will be keeping a sharp eye on any company with a chance of playing the national interest card. And there are still a number of other metals to consider, as well.
Germanium and Indium
Germanium and indium are two metals that fly under the radar of most. They aren't as exciting as gold or silver, or as rare as cesium, but they are arguably as important. And one well known miner can take credit for a lot of their production.
Teck Resources (TECK) is Canada's largest diversified mining company. It has operations across North and South America. It will play a key role in the emerging battery metal revolution, as a key supplier of both copper and zinc. But one of Teck's lesser known strengths lays in its production of germanium and indium, which are essential in semiconductors and transistors. Teck is one of the world's largest producers of the lesser-known but incredibly important metals, germanium and indium. Without these, the technological revolution would be at a stand-still.
Uranium, Rhenium and Molybdenum
While most people know that uranium is absolutely essential in today's nuclear power generation, they may not know much about rhenium and molybdenum. These two elements also play a critical role in our development of cleaner energy and will likely grow in demand over time.
Turquoise Hill Resources (TRQ, TRQ) is Canadian miner with an international reach. It primarily produces gold and copper, two essential resources in the tech boom, but what most people don't know is that it also producers uranium, rhenium, and molybdenum which are often overlooked in today's major metals markets.
Gold and Silver
While gold and silver did not make the critical metals list, there is a huge push for it to be included. Why? Because the iconic yellow metal is not only used in numerous electronics, but it also carries tremendous geopolitical weight. Just last year, a number of countries, including China and Russia, stockpiled gold in record amounts.
Agnico Eagle Mines Ltd (AEM)is one of Canada's top gold producers. Though gold is a flashy metal often associated with wealth, it is also one of the world's most widely beloved safe haven assets. To put it simply, gold fares well in times of crisis. And it always has. That's what makes Agnico so appealing
Like Agnico, Pretium Resources (PVG) is another one of Canada's premier gold miners. Pretium has an impressive portfolio and if you can catch the stock while the price is right, there could be huge opportunity for upside. Additionally, construction and engineering activities at its top location continue to advance, and commercial production is targeted for this year.
With things seemingly taking a turn for the worst on a global level, Pretium's forwarding thinking approach leaves it in a prime position to weather the storm and emerge even stronger than ever before.
The Most In-Demand Buyers
While producers of the world's most important metals get most of the fame and glory, it's the buyers that really make the world go around. Without demand, producers would have nowhere to go. And Magna International (MGA) may just be one of the important connections in the business.
While it doesn't produce metals itself, it is a leading supplier of mobility technology for automakers. That means it uses a lot of these metals, and its secure supply chain and partnerships in the space are incredibly important.
With operations in over 27 countries, Magna has the potential to supply every automaker in the world, and they're well on their way in doing so.
By. Josef Vojtech
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that prices for cesium will retain value in future as currently expected; that PWM can fulfill all its obligations to maintain its properties; that PWM's property can successfully mine commercial quantities of cesium; that the three properties the company is drilling are hoped to have similar finds as the strategically important Sinclair mine in Australia; that occurrences and indications of a commercially sized deposit become reality; that high grades found in samples are indicative of a high grade deposit; and that PWM will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that aspects or all of the properties' development may not be successful, mining of the cesium may not be cost effective, the price of cesium may not stay high and it may never be profitable to mine cesium; PWM may not raise sufficient funds to carry out its plans, changing costs for mining and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further test work may not be viable; competitors may offer cheaper cesium; more production of Cesium could reduce its price; alternatives could be found for cesium; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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