Mining company Mabwe Minerals is in an enviable position. The company's Dodge Mine project in Africa has tapped into a major mineral find, which Mabwe has begun aggressively mining in just the past few weeks. It's a gold mine for Mabwe, but only metaphorically since the primary mineral they're going after is actually barite, a weighting agent used extensively in the oil industry. The reason that everyone associated with the project is excited is the sheer volume of confirmed barite and other minerals that the site represents, together with the market that is waiting for it.
ASCON, an outside consulting firm, has authenticated at least 411,000 tons of barite, together with 531,000 tons of limestone, and that is based on a very small patch of the Dodge Mine site. As a result, it only hints at the total potential barite and limestone take from Dodge. Taken alone, the authenticated barite represents over $70 million at current prices, and the barite market is expected to remain basically strong. China and India, key global barite suppliers, have pushed up the price of barite in recent years. Although there are barite substitutes, such as iron ore, the effect on the barite market has been minor.
The project is being managed by veteran construction and open cast mining company WGB Kinsey & Company, with mineral distribution and shipment being handled by Steinbock Minerals and Yasheya Ltd. Confidence in the Dodge Mine operation and productive potential is so high that oil field service giant Baker Hughes has already agreed to a long-term supply contract representing 3 million tons of barite to be delivered over the course of 13 years, at approximately 220,000 tons per year, totaling hundreds of millions of dollars. The first revenue is expected this quarter.
For more information on Mabwe Minerals, visit dtg.fm/MBMI-Presentation
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