Bard Ventures’ Expanding Moly Universe
Date: Tuesday, July 01 @ 19:04:34 MST
Topic: Business
By Darryl Kelley
Higher grades, longer intercepts, and further step-outs all add up to the inevitability of Bard Ventures’ (TSX.V:CBS), rather than the possibility, of a major molybdenum deposit. The Lone Pine project, located 15 kilometers outside of Houston British Columbia, is intersected by Highway 16 as well as a natural gas pipeline and major power transmission lines, making the property an extremely well serviced location for a mine.
Ongoing drilling has now delineated a large, high-grade moly deposit that covers 4 zones measuring at least 1.5 km in length and half a kilometer wide.
Bard is in the process of earning a 100% interest in the property in exchange for 545,000 shares and $75,000 in exploration, as well as some minor advance royalty payments.
The Alaskite intrusive is the main focus of the Lone Pine Property drilling and has been interpreted as being the most favorable lithology for molybdenum mineralization. To date, the Alaskite intrusive is 260m in length along its northwest-southeast strike and 310m wide in plan view and molybdenum mineralization has been tested to a known depth of 843m. A higher grade corridor of molybdenum mineralization has been outlined within the Alaskite intrusive.
Moly Fundamentals Stronger Than Ever
The fundamental aspects driving the strength in the molybdenum market remain extremely bullish. Large institutional investors such as Eric Sprott have even gone so foar as to establish their owm Molybdenum Participation Funds, designed to capitalize on the metal’s increasing value.
Among the main drivers for molybdenum’s high price:
• Record high molybdenum prices. Tightening supply and growing demand has driven the price of molybdenum from the $2-$3 per pound range where it languished throughout much of the 1990s, to its current level near $30 per pound.
• Strong demand fundamentals. The growing production of construction steel (32% of end use) and stainless steel (31% of end use) has driven molybdenum demand for its lightweight, high-strength and anti-corrosive properties. Demand for molybdenum-bearing construction steel (0.1%-1.2% Mo) continues to grow, fuelled by the oil and gas, ship building, aerospace and building industries. Stainless steel (1%-7% Mo) production has grown at a compound rate of 8% over the past five years and shows no signs of slowing down.
• Tight supply. Traditional producers of molybdenum have seen production rates decline. Codelco, the world’s second largest molybdenum producer, has reduced annual production by 10 million pounds due to falling head grades. A further 11 million pound reduction is possible this year. Freeport McMoran (Phelps Dodge) is considering reopening past mining operations or adding molybdenum recovery circuits to boost Mo by-product recoveries at their copper operations.
• Long lead time for new production. There is currently no significant excess standby supply at the mine level ready to be brought back into production, and limited new development of primary molybdenum mines has resulted in long lead times for greenfield developments.
• Chinese molybdenum exports are falling. China is the third-largest producer of molybdenum and historically one of the largest exporters. The country’s exports are declining as its voracious appetite for steel has redirected domestic production. Additionally, more stringent regulatory enforcement and taxing of exports have curtailed production from many small mines.
• High molybdenum prices likely to continue. Molybdenum consumption has grown at a compound annual rate of 5% over the past five years and now stands at approximately 400 million pounds per annum. Assuming annual demand growth of 4% going forward, annual global molybdenum production will need to expand by 75% to 700 million pounds by 2020.
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