Resource Report: Juniors Recycle Old Mines for New Gains
Oriental Minerals (OTL-V)breites Grinsen jumped onto the radar last week with a South Korean acquisition that makes it The Only Foreign Mining Company in South Korea.
The company has started drilling at its newly acquired Sangdong tungsten-molybdenum mine, which closed in 1992 reportedly due to low metals prices. Since the mine closed, however, tungsten prices have rocketed from US$4 per lb to US$70 per lb while molybdenum is up $36 from less than US$2 per lb in 1992 to US$38 per lb today.
(I reported on molybdenum last week on StockHouse, pointing out that analysts see the alloying metal staying strong for the foreseeable future. (www.stockhouse.com/shfn/article.asp?edtID=18968) )
When the Sangdong mine closed it was one of the world\'s largest tungsten mines. According to a 1989 report from Korea Resources, the estimated remaining reserves at the mine total 189 million lbs WO3 (tungsten trioxide) from 15.6 million tonnes grading 0.5% WO3 in the main ore body and 1.4 million tonnes grading 0.55% WO3 in the east ore body.
Beneath the tungsten mine lies a moly deposit estimated to contain 16 million tonnes of molybdenum grading 0.4% MoS2 and an historical global resource of 120 million tonnes or 340 million lbs grading 0.129% MoS2. By my book, anything grading over 0.1% molybdenum at today’s prices, even at half that size, is positively worth looking at.
Importantly, none of this yet instrument 43-101 compliant, and is not yet to be considered reliable. All the same, this is excellent progress for a company that in three weeks launched its website, had an IPO on the Frankfurt Stock Exchange and acquired a promising one-time best in show.
By Douglas Hadfield
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