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Richard is host of aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine,... More
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  • Rare Earth Elements (REEs)
    Rare Earth Elements (REEs)
    Richard (Rick) Mills
    Ahead of the Herd
     
    As a general rule, the most successful man in life is the man who has the best information
    The rare earths are a group of 17 elements comprising Scandium, Yttrium, and the Lanthanides. The heavy rare earth elements, HREE. Light REE's are made up of the first seven elements of the lanthanide series - Lanthanum (La, atomic number 57), Cerium (Ce, atomic number 58), Praseodymium (Pr, atomic number 59), Neodymium (Nd, atomic number 60) Promethium (Pm, atomic number 61) and Samarium (Sm, atomic number 62).
    HREEs are made up of the higher atomic numbered elements - Europium (EU, atomic number 63), Gadolinium (Gd, atomic number 64), Terbium (TB, atomic number 65), Dysprosium (Dy, atomic number 66), Holmium (Ho, atomic number 67), Erbium (Er, atomic number 68), Thulium (Tm, atomic number 69), Ytterbium (Yb, atomic number 70) and Lutetium (Lu, atomic number 71).
    REEs with even atomic numbers have greater abundance than their odd numbered cousins. LREEs are more incompatible with other minerals and this makes them more strongly concentrated in the earth’s crust than the HREEs. In most rare earth deposits, the first four REE - La, Ce, Pr, and Nd - constitute 80 to 99 percent of the total.
    REEs occur in a wide range of igneous, sedimentary and metamorphic rocks and in a broad range of mineral types including halides, carbonates, oxides and phosphates. But REE deposits are most commonly associated with late-stage vein and replacement mineralization either within carbonatites or the surrounding host rock. Most carbonatites are intrusive igneous rocks, this means that the rock masses contain more than 50% carbonate minerals, and cooled from a melt.
    According to the geological literature there are about 600 known occurrences of carbonatites worldwide, but almost all are small and noncommercial.
    The principal economic sources of rare earths are the minerals bastnasite, monazite, and xenotime. Bastnasite and monazite are the primary source of LREE (Ce,La,and Nd) with monazite containing less La, more Nd and some HREE. Xenotime is dominated by the heavier HREE including y, Dy, Er, Yb, and Ho.
    The bulk of the world's supply of rare earth elements comes from the mineral bastnasite. Bastnasite is a mixed lanthanide fluoro-carbonate mineral (Ln F CO3) that’s found in carbonatites.
    Monazite, the single most common REE mineral generally contains elevated levels of thorium (Th). Thorium itself is only weakly radioactive but is accompanied by highly radioactive products like radium that can accumulate during processing.
    Uses
    Many REE applications are highly specific and substitutes are inferior or unknown:
    ·       Color cathode-ray tubes and liquid-crystal displays used in computer monitors and televisions employ europium as the red phosphor
    ·       Terbium is used to make green phosphors for flat-panel TVs and lasers
    ·       Lanthanum is critical to the oil refining industry, which uses it to make a fluid cracking catalyst that translates into a 7% efficiency gain in converting crude oil into refined gasoline
    ·       Rechargeable batteries
    ·       Automotive pollution control catalysts
    ·       Neodymium is key to the permanent magnets used to make high-efficiency electric motors. Two other REE minerals - terbium and dysprosium – are added to neodymium to allow it to remain magnetic at high temperatures
    ·       Fiber-optic cables can transmit signals over long distances because they incorporate periodically spaced lengths of erbium doped fiber that function as laser amplifiers
    ·       Cerium oxide is used as a polishing agent for glass. Virtually all polished glass products, from ordinary mirrors and eyeglasses to precision lenses, are finished with CeO2
    ·       Gadolinium is used in solid-state lasers, computer memory chips, high-temperature refractories, cryogenic refrigerants
    ·       Used in improving high-temperature characteristics of iron, chromium, and related alloys
    ·       Y, La, Ce, Eu, Gd, and Tb are used in the new energy-efficient fluorescent lamps. These energy-efficient light bulbs are 70% cooler in terms of the heat they generate and are 70% more efficient in their use of electricity
    ·       REEs are used in metallurgy as an alloying agent to desulphurise steels, as a nodularising agent in ductile iron, as lighter flints and as alloying agents to improve the properties of superalloys and alloys of magnesium, aluminium and titanium
    ·       Rare-earth elements are used in the nuclear industry in control rods, as dilutants, and in shielding, detectors and counters
    ·       Rare metals lower the friction on power lines, thus cutting electricity leakage
    Rare earths are not listed on a metals exchange and there is no set or official price for REEs or their compounds. The buying and selling of REEs happens on a company-to-company basis. Essentially they are traded one deal at a time.
    China
    China has 53 percent of the world’s REE deposits and supplies 97 percent of the global demand for rare earth elements.
    Tighter limits on production and lowered export quotas are being put in place to ensure China has the necessary supply for its own technological and economic needs.
    China’s export quota has been decreasing. In 2006 volume dropped to 48,000 tonnes. In 2007 volume dropped to 43,574 tonnes, in 2008 volume dropped to 40,987 tonnes and in 2009 to 33,300 tonnes.
    In a hunt to secure jobs, and access to advanced technologies, the Chinese have forced manufacturers needing access to REEs to make their products in China.
    In the last 10 years the global market for rare earth elements has grown to 125,000 tons per year and by 2014 demand is predicted to reach 200,000 tons per year. Many experts are predicting that the Chinese will be internally consuming most of their own rare earth production by about 2014.
    Conclusion
    There is an indispensable, unarguable need for rare earths in our modern society. Demand is growing, the supplier of 97 percent of this demand is lowering export quotas and might very well stop all REE exports by 2014.
    Without REEs, today’s technology would take a twenty year step back in time. Are REEs and the companies looking for, finding and developing REE deposits on your radar screen?
    If not maybe they should be.
    Richard (Rick) Mills
    rick@aheadoftheherd.com
    www.aheadoftheherd.com
     
    If you're interested in learning more about the junior resource market please come and visit us at aheadoftheherd.com.

    Membership is free, no credit card or personal information is asked for.

    ***

    Richard is host of aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell.com, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor and Financial Sense.

    ***

    Legal Notice / Disclaimer

    This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

    Richard Mills does not owns shares of any company mentioned in this article

    No company mentioned in this article is an advertiser on his website aheadoftheherd.com


    Disclosure: no position
    Nov 19 11:59 PM | Link | Comment!
  • Old Mother Hubbard
    Old Mother Hubbard

    Richard (Rick) Mills
    Ahead of the Herd

     

    As a general rule, the most successful man in life is the man who has the best information
     

    In 1798 32 year-old British economist Malthus anonymously published “An Essay on the Principle of Population” and in it he argued that human population’s increase geometrically (1, 2, 4, 16 etc.) while their food supply can only increase arithmetically (1, 2, 3, 4 etc.). Since food is obviously necessary for us to survive, unchecked population growth in any one area or involving the whole planet would lead to individual pockets of humanity starving or even mass worldwide starvation.
     

    "The power of population is indefinitely greater than the power in the earth to produce subsistence for man". Thomas Robert Malthus

    Malthusian pessimism has long been criticized by doubters believing technological advancements in:

    • Agriculture
    • Energy
    • Water use
    • Manufacturing
    • Disease control
    • Fertilizers
    • Information management
    • Transportation

    would keep crop production ahead of the population growth curve.

    Enter the Black Swans

    The Black Swan Theory or "Theory of Black Swan Events" was developed by Nassim Nicholas Taleb to explain: 1) the disproportionate role of high-impact, hard to predict, and rare events that are beyond the realm of normal expectations in history, science, finance and technology, 2) the non-computability of the probability of the consequential rare events using scientific methods (owing to their very nature of small probabilities) and 3) the psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs. Black Swan Theory refers to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences. Wikipedia

    A "perfect storm" of circumstances is setting the stage for possible massive food price increases, food riots, supply chain disruptions, country versus country water disputes and increasing numbers of hungry people.

    Consider:

    • Record setting droughts and worldwide abnormal weather
    • Exploding populations and eastern diets shifting to a western style one
    • Worldwide crop failures
    •  Diminishing world food stocks
    • Income deflation
    • Flooding
    • Freak cold snaps
    • Aquifers are being depleted faster than natural refreshment rates
    • Farmers ability to buy seeds and fertilizers was hampered during the financial crisis by a lack of credit – this limited production and then low prices towards the end of 2008 discouraged the planting of new crops in 2009
    • Relocation of produce for energy production - corn for ethanol
    • Desertification - new deserts are growing at a rate of 51,800 square kilometers per year. As an example Nigeria (Africa’s most populous country) is losing almost 900,000 acres of cropland per year to desertification because of increased livestock foraging and human needs

    Harvests around the world are going to be smaller, the world’s food inventories are going to be lower while at the same time global demand for basic food staples - and simultaneously a richer diet containing more meat - is at an all time high and growing.
     

    The U.N. calls the global food crisis a "silent tsunami.”
     

    So just how bad are things around the world?
     

    Saudi Arabia was once the world's eighth largest wheat grower but are phasing out grain production by the year 2016. The Saudis feared an embargo on grain after the 1972 oil embargo so they decided to grow their own. They farmed the desert and today have almost pumped their aquifer dry.
     

    World Irrigated Area
    Past growth in agricultural production was fueled in part by expanding irrigation


    “We are entering a new food era, one marked by higher food prices, rapidly growing numbers of hungry people, and an intensifying competition for land and water resources that has now crossed national boundaries as food-importing countries try to buy or lease vast tracts of land in other countries.” Lester Brown, Earth Policy Institute
     

    Almost biblical like droughts in Kazakhstan, Ukraine and Russia which also had to deal with brutal, massive wildfires - firefighters in Russia were battling 520 separate wheat field fires spanning over 700 miles in area.
     

    Pakistan lost most of its stored grain in its recent flood disaster.
     

    India has suffered its worst drought in 37 years - total rainfall is 23 percent below average.  India’s monsoon rains are extremely important to the countries farmers because almost 70 percent  of India's farms are not irrigated and depend on rainfall during the monsoon season.
     

    Food prices are rising around 15% a year in India, Nepal, Latin America and China.
     

    Corn is at its highest price in two years because of a wetter than expected US harvest and freezing weather in China and Canada. US corn prices broke through the $5-a-bushel level for the first time since September 2008.
     

    Agriculture assistance today is 3.5 percent of overall U.S. development aid - down from 18 percent in 1979.
     

    Emergency food aid is needed now to prevent famine in Niger, Mali, Chad, Burkina Faso, Mauritania, and northern Nigeria.
     

    The drought in East Africa is in its fifth year, 23 million Africans in that region are on the verge of starvation.
     

    The U.N. Food and Agriculture Organization (FAO) recently cut its 2010 global wheat forecast by 4 percent.
     

    The FAO projects average wheat and coarse grain prices to increase 15-40% over the next ten years. Vegetable oil prices are expected to increase more than 40%, with dairy prices increasing 16-45%.
     

    By 2050 the FAO says a 70% increase in food production will be required to keep pace with projected population growth. Already, according to the FAO, more than one billion people go to bed hungry every night.

    1.02 Billion Hungry
     

    Australia is being called the new "dust bowl" the country’s drought is so bad.

    Russia, the world's fourth largest wheat producer, has imposed an export ban on grain that will stay in place till after the 2011 harvest. The ban is forcing importers in the Middle East and North Africa to turn to Europe and the US for supplies.
     

    Germany could become reliant on wheat imports for the first time in 10 years. The winter wheat harvest will be 9% lower this year than last forcing Germany to import grain from France and the US.
     

    White sugar is climbing in price because of speculation that India, Pakistan and other importers will purchase more as a supply deficit looms.
     

    The FAO Food Price Index (FFPI) averaged 176 points in August 2010, up 5 percent, from July. The FFPI stands at its highest level since September 2008.

    Food Global Prices
    Global food prices are growing at a rate that rivals some of the worst months
    of 2008 – but still down 38 percent from their peak in June 2008

    Meat prices have risen because a drop in production coincided with rising demand from China. In August the FAO's meat price index climbed 16% yoy.
     

    Lamb prices are at a 37-year high, pork and poultry are also priced higher.
     

    Last week, the FAO called an emergency meeting for 24th September to discuss the current food crisis – just two short years after the last food crisis. The emergency meeting is being seen by many as a warning that there may yet be another food crisis looming.
     

    As in 2008, rocketing prices are the result of rising demand and supply shortages caused by freak weather and poor harvests (Export bans in some 38 countries during the price crisis in 2007-2008 caused a dramatic drop in cereal stocks).
     

    If no decisive action is taken, the prices of key food commodities are likely to be 50 to 100 per cent higher by 2020 than they were at the turn of the millennium. This would dramatically increase the level of hunger and malnutrition, around the world.” Harald von Witzke, president, Humboldt Forum for Food and Agriculture

    Conclusion
     

    If a person was so inclined they could bury their head in the sand and write off  all of the above as nothing more than temporary conditions impacting world food  supply.
     

    That might not be a prudent move.
     

    Western consumers are, for all intent and purposes, totally dependent on retail food stores for their subsistence. Yet these stores have only 2 - 3 days of inventory on hand at any one time. If any kind of a short term crisis hits, let alone a massive disruption in the food supply chain, stockpiling and hoarding will quickly empty store shelves.
     

    Too much Doom and Gloom? Perhaps, but given all of the above two things are abundantly clear to this author - firstly the era of cheap food is over and secondly a serious disruption in the food supply chain - one lasting longer than a couple of days - to a grocery store near you might become more than a temporary minor inconvenience.
     

    Are agricultural commodities and your local grocers supply chain on your radar screen?
     

    If not, maybe they should be.
     

    Richard (Rick) Mills

    rick@aheadoftheherd.com
    aheadoftheherd.com
     

    If you're interested in learning more about the junior resource market please come and visit us at aheadoftheherd.com.
     

    Membership is free, no credit card or personal information is asked for.
     

    ***

    Richard is host of aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell.com, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Resource Investor, Calgary Herald and Financial Sense.

    ***

    Legal Notice / Disclaimer

    This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

    Richard Mills does not own shares in any company mentioned in this article

    No company mentioned in this article is an advertiser on aheadoftheherd.com



    Disclosure: no position
    Oct 01 8:06 AM | Link | Comment!
  • Mukuba is in the Zambian Copperbelt
    Mukuba is in the Zambian Copperbelt

     


    Richard (Rick) Mills
    Ahead of the Herd

    As a general rule, the most successful man in life is the man who has the best information
     

    The Republic of Zambia (plus 12 million people) is a landlocked country in Southern Africa covering 752, 600 square km of the central African plateau from the River Zambezi in the south-west to the tip of Lake Tanganyika in the north-east. The neighboring countries are the Democratic Republic of the Congo to the north, Tanzania to the north-east, Malawi to the east, Mozambique, Zimbabwe, Botswana, and Namibia to the south, and Angola to the west. The capital city is Lusaka, located in the south-central part of the country.

    Zambia was occupied by the British as a protectorate of Northern Rhodesia towards the end of the nineteenth century.

    On 24 October 1964 the protectorate gained independence with the new name of Zambia (named after the Zambezi river which flows through the country). Zambia was governed by the socialist United National Independence Party from 1964 until 1991.

    Zambia's industrial base, the Copperbelt (the Zambian Copperbelt accounts for approximately 46 percent of the production and reserves of the Central African Copperbelt, the largest and highest grade sediment-hosted stratiform copper province known on Earth), is centered around the towns of Ndola, Kitwe, Chingola, Luanshya and Mufulira - a string of towns on Zambia’s northern border with Congo.

    Map from geographicguide.com

    During the socialists rule the copper mines fell under the control of the mostly state owned Zambia Consolidated Copper Mines (ZCCM). Profitable mines subsidized those that ran at a loss. The idea was to keep everyone working - the perfect socialist nirvana built on natural resource extraction. And it worked… for a while, until copper prices fell.

    Pressure from the World Bank and International Monetary Fund forced the Zambian government to privatize the copper mines. All the mines were snapped up (Anglo American grabbed the Konkola copper mines, Glencore and First Quantum joint ventured to buy the Mopani copper mines, the Copperbelt’s second largest producer) by international investors - the profitable mines were kept and the uneconomic ones closed.

    Today the Copperbelt is one of the richest sources of copper in the world and the area's production of copper and cobalt are of global importance. The Zambian Copperbelt is unusual among sediment-hosted stratiform copper districts in having abundant Cobalt (Co) and low Silver (Ag), Zinc (Zn) and Lead (Pb).

    Copper accounts for 80 per percent of Zambia's foreign exchange earnings and has, since 2003, been the main driver of an annual economic growth rate of five percent. Most developing countries depend heavily on exporting just a few products as their means of earning foreign exchange but  Zambia is an extreme case - the country depends on the production and export of a single product, copper.

    Copper

    Global copper production has been plagued year after year by supply shortages due to falling ore grades, lower volumes, higher costs and scarce new resources. Copper exploration/development companies looking for or trying to develop deposits already found and copper miners looking to expand their production capacity are all facing some serious challenges:

    • Falling ore grades
    • Country risk
    • Water supply
    • Labor problems, strikes
    • Shortage of skilled labor
    • Cost of capital for project finance
    • Capital cost overruns
    • Tax and sharing initiatives
    • Energy costs
    • Inadequate exploration funding - The Metals Economics Group estimates that exploration spending plummeted 42 percent to $7.7 billion in 2009.
    • A lack of new discoveries
    • Currency fluctuations

    Credit Suisse Group AG said in a recent report that mining companies are missing analysts’ output forecasts because of lower-quality ore - Xstrata posted a 3 percent fall in first half copper output. The miner said copper output fell due to reduced volumes and lower grades at their Mount Isa and Ernest Henry mines.

    “Spectacular” was used by UBS to describe western world copper demand growth in the first half of this year. Global copper inventory levels have been on a steady decline. Bloomberg recently reported stockpiles on the London Metal Exchange (LME) have fallen 20% since mid-February. According to the International Copper Study Group world refined copper consumption exceeded production by 67,000 tonnes between January and April this year, against a surplus of 74,000 tonnes in the same period one year ago.

    Consider:

    The declining rate of production at the world's largest copper mine, Escondida. BHP Billiton forecasts a 5 to 10 percent production cut at the mine this year due to lower ore grades.


     

    Bart Melek, Global Commodity Strategist with BMO Nesbitt Burns in Toronto, said this could take as much as 80,000 to 100,000 tonnes of copper out of the market.

    • U.S. copper mine production had been expected to increase by more than 200,000 tons last year, instead production declined by 120,000 tons
    • Rio Tinto and Freeport McMoRan both saw their output drop in the first six months of this year
    • A lack of investment in new mining capability because of recent low prices
    • The growth in demand from China, India and other emerging markets
    • Consistent declines in warehouse inventories are underpinning the price of copper
    • A low interest rate environment bodes well for the whole resource sector
    • The overall weakness in the U.S. dollar translates into support for dollar denominated metal prices
    • The potential for a drop in production from Australia - the world's fifth largest copper producer - as a result of a resource tax the government might implement
    • China has set a goal of 65 percent of urbanization rate in 2050. Over the coming 40 years that means 20 percentage points of urban growth per year, that translates into 300 million rural residents becoming urban residents over this time period
    • Over the next two decades China will build 20,000 to 50,000 new skyscrapers
    • By 2025, 40 billion square meters of floor space will have been built
    • 221 Chinese cities will, by 2025, have one million people
    • More than 170 cities will need mass transit systems by 2025
    • India's power production needs to rise by 15 to 20 percent annually which means, according to the International Energy Agency (IEA), India needs to invest $1.25 trillion by 2030 into its energy infrastructure. Because of this investment into new infrastructure India's annual copper demand is expected to more than double to nearly 1.5 million tonnes by 2012 - up from a current 600,000 tonnes. India usually exports between 100 and 150,000 tonnes a year, Indian copper exports are likely to cease and indeed Indians might become large copper buyers 

    “The vision of a lower carbon transportation system, delivered by affordable, hybrid and electric vehicles, connected to smart grids, along with high-speed rail networks, requires copper. A hybrid passenger car contains 50 kg of copper for the electric motor, energy storage and transfer system. Each high-speed train requires 10 tonnes of copper components, plus 10 tonnes in the power and communication cables per kilometer of track. Low carbon electricity sources, such as renewables, and the distributed electricity systems required to incorporate and manage them, need four to ten times the copper content of electricity produced via centralised, fossil fuel generation.” Manifesto for a Competitive European Copper Industry European Copper Institute

    "Our preferred commodities over the short to medium term are thermal coal, copper, zinc and gold. We still like copper and met-coal longer term." UBS Investment Research Analysts Julien Garran, Tom Price and Edel Tully

    Zambia sees bright future for copper mining

    "The outlook for copper mining is very bright. Copper will continue to be sought because it is ideal for construction and is a very good conductor of electricity which cannot easily be substituted. We need to invest in exploration activities and that will require a lot of investment.” Mines minister Maxwell Mwale

    Last year Zambian copper output reached 697,860 tonnes of finished copper cathodes from 17 privately-owned mines. With copper production rising by 16 percent in the first half of 2010 - first-half output equals 393,089 tonnes -  the country is on course to hit its forecast 2010 target of 750,000 tonnes (a level last seen in 1973). Zambia continues to attract new mining investments (Zambia’s Chamber of Mines of Zambia said investments in the mining sector have peaked at $5 billion in the last eight years) and the country should achieve the targeted 1 million tonnes output forecast for 2012.

    The extractive industries are the key drivers of African economies in general. Here in Zambia, mining has become the mainstay of Zambia’s economy and therefore it is in the interest of government to see that investment in the mining sector is increased. This will reverse the negative effects of the global economic crisis on the nation.” Mines minister Maxwell Mwale,

    Zambia’s government said that it expects a strong performance by the mines over the long-term due to rising metals prices and has urged mineworkers' unions to support new investors.

    Zambia's mineral royalty is three percent which compares very favorably to other jurisdictions of around five percent. Corporate tax is charged at 25 percent with a proposed profit variable tax at 15 percent - if after paying their 25 percent corporate tax companies still have a profit greater than eight percent of their overall income than these profits will be taxed at 15 percent - this tax is designed to transfer a fair share of the windfall value of copper to the Zambian government.

    Do not confuse Zambia with the Democratic Republic of the Congo. Although both countries have immeasurable resource riches there is a vast difference between them, namely political risk.

    Mukuba Resources Ltd. TSX.V – MKU

    Issued and Outstanding: 55,384,054
    Warrants: 16,825,979
    Options: 2,812,083
    Fully Diluted: 75,022,116
    Cash: $4 million
    Debt: 0

    Mukuba is a Canadian mining company focused on the exploration and development of the Northcore Project, which is located in the highly prospective Central African Copperbelt region of Central Zambia. This geological phenomenon is one of the most important metallogenic provinces in
    the world, containing massive reserves of copper-cobalt, as well as gold,
    uranium, nickel, lead-zinc, iron and manganese.

    Northcore Project - licensed for copper and cobalt - encompasses approximately 2,274 square kilometres of geologically prospective ground in the Domes Region of the Zambian Copperbelt - over 95% of the known Zambian copper reserves occur in rocks of the Lower Roan Group, or in the adjacent basement complex. The Northcore Project area contains roughly 2,000 km2 of the Lower Roan Group.


     

    Geological mapping, soil sampling and investigation of the historical showings as well as ground-truthing of the geophysical survey results have confirmed historical geological anomalies and identified new anomalies - Approximately half of the Northcore Project area has been surveyed using aeromag/VTEM in the 2008 exploration program, with the remainder of the property completed by the end of the 2009 season using radiometrics and aeromag. The Company’s 2009 exploration program included drilling several of these anomalies and confirmed the presence of copper mineralization.

    In June MKU started its 2010 drill program – on the Northcore Project, located southwest of Ndola, Zambia - of up to 10,000 metres in approximately 55 boreholes and it's anticipated to be completed by November 2010. A test Induced-Polarization (NYSE:IP) geophysical survey completed across selected lines at Target 18 outlined several chargeable anomalies. A selected number of these targets will be tested by the drilling program.

     “This drilling program will test the numerous prospective targets identified in the 2008 and 2009 exploration seasons and we look forward to reporting drill and exploration results over the next 6 months.” Trevor Richardson, Mukuba’s President and CEO

    Mukuba has recently mobilized a second diamond drill rig to test various high priority targets within the Target 17 area (Northcore Project) where coincident soil geochemical and VTEM, electromagnetic conductors will be tested.

    Regional soil sampling across various new target areas is ongoing. It is anticipated that additional drill targets will be identified and selected based on the level of coincidence between the new soil geochemical survey and airborne geophysical results.

    Recently published drill results are encouraging:

     “The results are very promising since they correlate well with our previous work and represent the first eight holes of a larger planned program. In addition to confirming the presence of copper mineralization they provide the data to better understand the geological structure at Northcore and further support our belief in the highly prospective nature of the overall project area. Our technical team will continue to interpret the geological structure and mineralization style to refine drill locations for the remainder of the 2010 drilling program.” Trevor Richardson, President and CEO

    Mukuba recently obtained the right to acquire an 85% interest in the exploration license rights to the Nyimba Project near the town of Nyimba, approximately 300 km east of Lusaka, Zambia. Historic exploration records indicate there are five defined areas of mineralization within the 500 square kilometre license area. The most prospective area appears to be Chipirinyuma, where soil sampling by Minex and Rio Tinto defined a surface anomaly measuring 3.5 km by 1.2 km.

    These polymetallic deposits host zinc, with copper, lead, molybdenum, silver, and gold, and were systematically explored and partially drilled by Minex (Mindeco) - a Zambian government department - in the late 1970s and early 1980s. The Nyimba Project rights were acquired by Rio Tinto-Zinc Corporation in 1994. RZC carried out EM, magnetic and radiometric surveys as well as initial RC drilling. Exploration work on the property ceased in 1997 when Rio Tinto, along with most other mining companies, withdrew from Zambia.

    Mukuba expects to mobilize a diamond drilling rig in October of this year.

    The addition of the Nyimba Project is an exciting opportunity for Mukuba and fits well into our African exploration strategy. We remain committed to the exploration and development of the Northcore Copper Project, which is our primary focus. The Company’s current cash position will allow us the flexibility to explore and develop both properties and to increase shareholder value. The Nyimba Project is well advanced and substantial exploration work has been completed to date.” Trevor Richardson, President and CEO Mukuba

    Could a junior take part in a possible Zambian Copperbelt Boom? Could a fully cashed up, early stage greenfields exploration company with good solid management, having two large projects with excellent addresses find the “goods” and participate in a Copperbelt revival?  Only time will tell.

    The Zambian Copperbelt and Mukuba Resources TSX.V - MKU should be on every copper/cobalt and zinc/polymetallic resource investors radar screen.

    Are they on yours?

    Richard (Rick) Mills
    rick@aheadoftheherd.com
    aheadoftheherd.com

    If you are interested in the junior resource / bio-tech markets and would like to learn more please come and visit us at aheadoftheherd.com

    ***

    Richard is host of aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell.com, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Resource Investor, Calgary Herald and Financial Sense.

    ***

    Legal Notice / Disclaimer

    This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

    Richard Mills does not own shares in any company mentioned in this article

    Mukuba Resources TSX.V – MKU is an advertiser on aheadoftheherd.com



    Disclosure: no position
    Sep 28 10:39 AM | Link | Comment!
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