A Third Tank On Our Hill? Lithium & Vanadium Update

Morning Miners!

It is 5:21 AM. Why is the Colonel up a little earlier than usual? I get excited anytime I read something new on the strategic metals that could have a major impact on the future prosperity of Northern Nevada and Eureka County. The truth is I can't wait to pass this news along to you. Grab a cup and let's get to work.

Suppose I were to tell you that someday there may be a new tank by our water tanks on the hill; that this tank stores not water but electricity for our town. My story goes on to tell about similar tanks near wind and solar farms throughout the Western states supplementing more conventional sources of energy derived from clean coal, natural gas and nuclear power stations. Our tank is a power leveling substation in this vast grid and also serves as a reliable source of emergency power if outages occur.

You might reasonably ask, "How can you store electricity like water, Colonel?" and I would reply, "Vanadium redox batteries, pardner! 'VRB' for short." I'd also remind you that we have a pretty healthy supply of vanadium (V) right here in the southeast corner of Eureka County. Vanadium is key to making the redox battery technology work and some day the world will need a lot more of it.


Presently vanadium is used as a steel alloying agent like molybdenum for strengthening steel. It is also being seriously considered as a safe alternative to cobalt in the chemistries for lithium ion batteries. The demand for such batteries will grow from laptop and cellphone applications to use in electric and electric hybrid cars of the future.

As we have reported before, a low cost source of lithium is available in Kings Valley of nearby Humboldt County. Western Lithium (TSX-V:WLC) is currently developing that site for open pit mining of lithium carbonate. This "clay" extraction approach should offer a real cost advantage to the more common "brine" technique where lithium is produced by pumping salty water out of dry salt lakes in South America (The Foote Mineral deposits, currently operated by Chemetall in the Clayton Valley just west of Goldfield, are another example of brine extraction).

Mineweb carried a terrific Gold Report interview with Jon Hykawy, lithium analyst for Byron Capital Markets, on this subject Saturday:

The future's hot for lithium - and getting hotter (Mineweb posted 3/20/2010, interview by the Gold Report)

This article covers both the future of lithium and vandium together with explanations of automotive applications and VRBs. Expert Jon Hykawy also did an excellent industry report which is posted on the Rocky Mountain Resources (TSX-V:RKY) website. Rocky Mountain owns the Gibellini vanadium deposits in Eureka County. Here is the link to the Hykawy report:

Vanadium: the Supercharger (Byron Capital Markets)

These two are great reading and will bring you up to speed on the latest developments. Below are some additional articles by this Report on how emerging battery technologies may become very important to our State and County through the mining of lithium, vanadium and silver:

The Next Big Thing in Northern Nevada (The Eureka Miner's Market Report, 9/28/2009)

A Big Step into the Future for Eureka County (The Eureka Miner's Market Report, 10/23/2009)

A Silver Lining for the Silver State? (The Eureka Miner's Market Report, 11/16/2009)

What's in a Battery for Eureka County? (The Eureka Miner's Market Report, 11/23/2009)

More News on US Gold & Western Lithium (The Eureka Miner's Market Report, 01/12/2010)

What's up with molybdenum, the other important strategic metal in our county? Here's a wrap up of last week's price action at the close, Friday (3/19/2010):

Western Moly Oxide (FeMo65) $16.25/lb (the price reported by Infomine and tracked by Base Metals on the General Moly Website)

This is just below the Report's "magic number" for moly of $16.50/lb (Molybdenum Bounces Back to Magic Number). Here's a 1-month chart of Miss Moly and Uncle Nickel:



London Metal Exchange (LME) Futures Contracts

3-Month (Buyer) $37,000/metric ton $16.78/lb
3-Month (Seller)$38,000/metric ton $17.24/lb

15-Month (Buyer) $37,000/metric ton $16.78/lb
15-Month (Seller)$38,000/metric ton $17.24/lb

The LME 3-month contract (seller) is slightly below the the 2/22 launch price, here's a chart from then to Friday's close:



I'd say for a very new market, molybdenum futures are showing a lot of stability with only a $1 difference between the spot price for Western moly oxide and the 3-month seller contract.

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" is below 25, improving broader markets are expected; metals & miners have a smoother road with FCX above $74 (what is this?)

The GREEN light is switched back on our fuel gauge with oil below $80

An ORANGE light is ON for possible adverse regulation/legislation: Miner's claim fee, Miner taxation, Cortez Hills & mercury emissions

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

NYMEX/COMEX: Oil is down $1.94 in early trading to $79.03 (April contract, most active); Gold is down $12.4 to $1095.2 (April contract, most active); Silver is down $0.377 to $16.655 (May contract); Copper is down $0.0605 to $3.3120 (May contract); Western Molybdenum Oxide sits at $16.25

The DOW is down 44.89 points to 10697.09; the S&P 500 is down 6.80 to 1153.10. The miners are down today:

Barrick (ABX) $38.52 down 2.28%
Newmont (NEM) $50.08 down 1.34%
US Gold UXG) $2.65 down 2.93%
General Moly (Eureka Moly, LLC) (GMO) $3.16 down 2.77%
Thompson Creek (TC) $12.82 down 2.14%
Freeport-McMoRan (FCX) $77.465 down 1.33% (a bellwether mining stock spanning gold, copper & molybdenum)

The Steels are down, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $41.07 down 2.72% - global steel producer
POSCO (PKX) $115.93 down 2.16% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.79% to $1,350,174.51 (what is this?).

Cheers,

Colonel Possum

Headline photograph by Mariana Titus

Photograph of Gibellini vanadium oxide samples, Rocky Mountain Resources

Western Lithium, Gold, Silver, Copper & Oil

Morning Miners!

It is 5:59 AM. I've got a pot of Raine's Red Label TGIF coffee brewing, let's put a wrap on this week. The Report has been drilling down on on molybdenum lately with its recent launch on the London Metal Exchange (LME) and General Moly's groundbreaking announcement last Friday (A Game Changer for General Moly & Eureka County). It's high time to change bits and catch up with some of our other favorite metals and oil.

Lithium

Mineweb reported yesterday that Western Lithium (WLC.V) is seeking strategic partners to help develop a planned mine in Kings Valley over in Humboldt County. President Jay Chmelauskas says they hope to bring it on line by early 2014. Mineweb reports, "Western Lithium is betting that car makers' plans to develop electric vehicles will prove a boon to the lithium ion battery industry, lifting demand for lithium metal by two- or three-fold in the coming years." The Kings Valley massive lithium carbonate deposits can be exploited by low-cost open pit mining. Here's the latest:

Western Lithium looking for strategic partners for Nevada mine (Mineweb, 3/11/2010)

If you're just catching up with this exciting story here are some background articles on how emerging battery technologies may become very important to our State and County through the mining of lithium together with vanadium and silver:

The Next Big Thing in Northern Nevada (The Eureka Miner's Market Report, 9/28/2009)

A Big Step into the Future for Eureka County (The Eureka Miner's Market Report, 10/23/2009)

A Silver Lining for the Silver State? (The Eureka Miner's Market Report, 11/16/2009)

What's in a Battery for Eureka County? (The Eureka Miner's Market Report, 11/23/2009)

More News on US Gold & Western Lithium (The Eureka Miner's Market Report, 01/12/2010)

Gold & Silver

It is nearly mid-month and gold is trading at $1112/oz on the COMEX this morning. At the beginning of the month, the Colonel picked $1120/oz as a nominal price for March and I see no compelling reason to change it (The Colonel's Outlook for March). Kitco Metals sees a lot of price resistance at $1125/oz and solid support at $1110/oz. Looks like a Goldilocks to "not too hot or not too cold" month so far to me:

Kitco Metals Roundup: Gold Higher as U.S. Dollar Index Slumps (Kitco Metals, 3/12/2010)

For $1120/oz gold, I'll hold on silver price too:

The fair value of silver is $17.184 in a range of $15.944 to $18.423

This morning COMEX silver is sitting at 17.200 just a feather above fair value. Comme ci comme ça, pardner.

Copper

There have been many calling for the demise of copper price recently but it just doesn't happen. Freeport-McMoRan (FCX) keeps on ticking above $80 too, a comfortable margin above the Report's warning level of $74. For $1120/oz gold, the March numbers for copper were:

The fair value of copper is $3.2170 in a range of $2.9363 to $3.4977

COMEX copper is trading at $3.3880, above fair value but hanging comfortably in its range. The March decline in LME copper stocks is price-supportive, reversing the build-up trend earlier this year:



Oil

Oil may very well become the wild card in our deck this month jumping outside its expected range this morning on the upside. Nuts.

The fair value of oil is $76.55 in a range of $70.33 to $82.77

COMEX oil is $83.19, is there a $90 barrel sitting out there this coming Spring? I'll keep my eyes on this bad dog buckaroos.

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" is below 25, improving broader markets are expected; metals & miners are headed for smoother roads with FCX above $74 (what is this?)

The YELLOW light is switched on our fuel gauge with oil above $80

An ORANGE light is ON for possible adverse regulation/legislation: Miner's claim fee, Miner taxation, Cortez Hills & mercury emissions

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

NYMEX/COMEX: Oil is up $0.76 in early trading to $83.19 (April contract, most active); Gold is up $3.8 to $1112.0 (April contract, most active); Silver is up $0.040 to $16.995 (May contract); Copper is up $0.0110 to $3.3880 (May contract); Western Molybdenum Oxide is steady at $18.25, LME 3-month futures (seller) is $17.24; 15-month, $17.01

The DOW is up 0.23 points to 10612.07; the S&P 500 is down 1.24 to 1149.00. The miners are mixed today:

Barrick (ABX) $39.04 down 0.36%
Newmont (NEM) $50.16 down 0.52%
US Gold UXG) $2.66 unchanged
General Moly (Eureka Moly, LLC) (GMO) $3.50 unchanged
Thompson Creek (TC) $13.63 up 1.94%
Freeport-McMoRan (FCX) $80.81 up 0.39% (a bellwether mining stock spanning gold, copper & molybdenum)

The Steels are mixed, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $42.69 up 1.62% - global steel producer
POSCO (PKX) $123.55 down 0.19% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.34% to $1,360,843.55 (what is this?).

Cheers,

Colonel Possum

Headline photograph by Mariana Titus

More News on US Gold & Western Lithium

Morning Miners!

It is 6:37 AM, grab a cup and get ready for a little snow coming our way. The markets woke up grumpy this morning snapping the broader market rally of the past several days. Apparently that old bugaboo Reality crept in and put a damper on our new year surge of optimism. Aluminum giant Alcoa (A) announced disappointing results after the market close, China did a pinch of monetary tightening and the U.S. trade deficit widened more than expected in November as surging oil prices helped imports to out gain exports.

What do we do now, pardner? The ole Colonel picked up a little US Gold (UXG) on the pullback and I feel better already. In fact, yesterday's Dahlman Rose report on US Gold's prospects in Eureka County (Eureka Good News: US Gold, General Moly & POSCO) got me so fired up, I added them to the Eureka Miner's Grubstake for 2010 . A little sour news isn't going to slow us down!


For those of you that have been tracking Western Lithium's (WLC) progress in Humboldt County, there is some encouraging news on the wire this morning. Western Lithium will hold a conference call today to discuss their positive scoping study results. Here's the information if you've got a little time this afternoon:

Date: Tuesday, January 12, 2010
Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time)
Webcast: www.westernlithium.com
Dial in: 1-416-340-8018 or toll-free 1-866-223-7781
Replay: 1-416-695-5800 or toll-free 1-800-408-3053
Replay Passcode: 3211655

Their deposits of lithium carbonate in King's Valley could prove very beneficial to Northern Nevada as future electric and electric hybrid vehicles become a greater part of America's transportation story. In their words today:

"Western Lithium’s Kings Valley property has one of the largest known lithium deposits in the world, based on a historical resource estimate done by Chevron Resources of 11 million tonnes of LCE(2). The NI 43-101 compliant PAEE results for Stage I considers only 8% of the historical near-surface lithium deposit. Successful development of Stage I will allow the company to consider further expansion of production to meet anticipated growth of the lithium-ion battery industry. In December 2009, drilling was completed on the Stage II lithium historical resources and results are expected later in 2010. The company believes that its Nevada property has the potential to become a major USA-based global supplier of high quality lithium carbonate that can economically compete with other global producers of LCE." (WLC press release, 1/12/2010)

If you're just catching up with this exciting story here are some background articles on how emerging battery technologies may become very important to our County and State:

The Next Big Thing in Northern Nevada (The Eureka Miner's Market Report, 9/28/2009)

A Big Step into the Future for Eureka County (The Eureka Miner's Market Report, 10/23/2009)

A Silver Lining for the Silver State? (The Eureka Miner's Market Report, 11/16/2009)

What's in a Battery for Eureka County? (The Eureka Miner's Market Report, 11/23/2009)

Something for the kids and grand kids buckaroos!

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" remains below 25; smoother road market conditions expected to continue (what's this?)

Yellow light is ON for our fuel gauge with oil above $80

Yellow light is ON for possible adverse regulation/legislation: Cortez Hills & mercury emissions

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is down $1.08 in early trading to $81.44 (February contract, most active); Gold is up $0.1 to $1151.1 (February contract, most active); Silver is down $0.125 to $18.570 (March contract); Copper is down $0.0525 to $3.3885 (March contract); Molybdenum is steady at $14.25.

The DOW is down 30.68 points to 10633.31; the S&P 500 is down 6.56 points to 1140.22. The miners are grumpy too:

Barrick (ABX) $41.16 down 1.15%
Newmont (NEM) $49.26 down 1.83%
US Gold (UXG) $2.66 down 0.38%
General Moly (Eureka Moly, LLC) (GMO) $2.82 down 4.42%
Thompson Creek (TC) $14.02 down 0.43%
Freeport McMoran (FCX) $85.50 down 2.94% (a bellwether mining stock spanning gold, copper & molybdenum)

The Steels are mixed, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $46.86 down 2.34% - global steel producer
POSCO (PKX) $136.86 down 2.31% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 2.10% to $1,372,426.25 (what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

Dogs, Bears, Coyotes and a little more Lithium

Morning Miners!

It is 5:42 AM, the coffee's hot and Loquita is catching up on her beauty sleep. Dogs know things that humans don't. You realize this if you've had dogs in your life. The ole Colonel was blessed to have three; two black labs and their sidekick, La Loquita. Henry and Charley have passed on as old dogs do but I think of them quite often and they passed on many canine secrets to my small companion.

Dog owners know that their animals speak to them telepathically. Henry would often berate his master, "You know we'd have more interesting conversations if you had a better sense of smell!" Henry was bear-like, crashing through the sage with forepaws and hind legs moving in opposing lockstep. Charley was the coyote; side-stepping, serpentine, cautious and aware that a misstep in the wilds could be fatal. Henry the Bold, Charley the Protector. Working together they combined their strengths to offset their weaknesses. Smart critters those two.

Markets exhibit some of the same characteristics. For several months we have been bounding through the sagebrush to higher and higher bluffs without much concern for what dangers may lie ahead. The Dow Jones broke 10,000, the S&P raced past 1100 and commodities have been on a tear. Oil jumped above $80 and copper finally broke the $3 mark. Henry the Bold.

This week fear has returned to the marketplace and the pace is more cautious. Stock markets, oil and copper along with the precious metals are in retreat. Money is fleeing riskier assets to seek safe haven. Charley the Protector.

What's changed? One theory is that global stimulus is slowly coming to an end. Australia was the first to tighten monetary policy by raising interest rates. India and Norway are following Australia's lead and it is suspected that South Korea will be the next to hit the brakes. Fear arises as investor's contemplate a global recovery without central bank training wheels. Interestingly, there is renewed vigor for foreigners to buy U.S. debt as evidenced by a record breaking auction of 2-year Treasury notes yesterday and a rebound of the poor U.S. dollar against the euro and yen.

Is the Colonel worried? Nay, actually I'm relieved to see a little fear dampen cheap money speculation. I get scared when everything is up, up and away. We've come a long way since the March lows. Let's follow Charley Dog's lead for awhile; side-stepping, serpentine, cautious and aware that a misstep in the marketplace could be fatal.


I'll close on a positive note, lithium is back in the news. The Report has been tracking lithium and vanadium as two strategic metals that may have a big footprint in our future as the next generation of electric and electric hybrid vehicles roll down the highway:

The Next Big Thing for Northern Nevada? (9/28/2009)

A Big Step into the Future for Eureka County? (10/23/2009)

Last week there was a panel discussion at the Managing Supply Chain Risks for Critical & Strategic Metals conference in Washington. Here is a link to a Reuter's article on the meeting:

Lithium outlook bright with auto electrification

Jay Chmelauskas, president of Western Lithium Corp. (WLC), said:

"I think that the future of transportation and energy is in electrification and smart grids. For electrification to really take place, you need a number of drivers, and we are seeing these catalysts today in Beijing ... in Washington, in terms of energy independence and 'green' air quality requirements..."

and,

"Will it happen? Yes it will, but where is that inflection point? I think it is in the next five to ten years from what we see happening..." (Reuters, 10/27/09)

David L. Trueman, consulting geologist with Avalon Rare Metals Inc., stated:

"We are recognizing that lithium is perhaps the Holy Grail of the electric vehicle and variations of the electric vehicle..." (Reuters, 10/27/09)

WLC presently holds "potentially one of the world's largest strategic, scalable and reliable sources of high-quality lithium carbonate" located in Kings Valley, Nevada (Humboldt County). WLC has recently expressed interest in the vanadium deposits in Eureka County's Gibellini mining district.

That's not all bad buckaroos!

Enough talk, let's walk the walk:

4-WD is ON - the VIX or "fear index" is is above 25 ,off-road market conditions ahead (what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is down $0.79 in early trading to $78.76 (December contract); Gold is down $0.4 to $1035.0 (December contract, most active); Silver is down $0.150 to $16.390 (December contract); Copper is down $.0255 to $2.9735 (December contract); Molybdenum is steady at $11.75.

The DOW is down 29.55 points to 9852.62; the S&P 500, down 9.37 points to 1054.04. The miners are getting stomped:

Barrick (ABX) $34.83 down 3.49%
Newmont (NEM) $42.37 down 2.10%
General Moly (Eureka Moly, LLC) (GMO) $2.22 down 5.13%
Freeport McMoran (FCX) $74.86 down 3.34% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are on the mat, (a "tell" for General Moly):

Nucor (NUE) $39.78 down 3.02% - domestic steel manufacturing
ArcelorMittal (MT) $34.22 down 3.77% - global steel producer
POSCO (PKX) $106.77 down 4.16% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 2.90% to $1,154,166.02 (what is this?).

Cheers,

Colonel Possum

Photographs by Mariana Titus

Dog In Search of an Honest Metal

Morning Miners!

It is 5:51 AM, grab a cup and the ole Colonel will tell you about an unusual visitor in our break room this morning. I was letting Loquita out for her morning pee when I saw a faint and flickering light come my way. It was an old timer carrying a miner's lamp. He walked up to the shop door and asked to come in to rest a spell. I asked his name and he said, "Diogenes. It's a Greek name, miners call me Dog". After our second cup, I asked the old feller what he was doing up so early in Eureka. He smiled and said, "I'm looking for an honest metal and I think I've found it." Puzzled, I inquired what metal that might be and he laughed, "Molybdenum, my friend!"


I didn't learn too much more from "Dog" and he melted away in the early morning darkness as quickly as he appeared. Loquita followed and for a moment I wondered if I had lost my dog to another. With the first light of dawn, she came running back wagging her tail with a note tucked in her collar. I read the note and now I know what my miner friend was telling me.

The readers of the Report have watched a meteoric rise in gold since early September as our poor ole greenback continues to fall down the mineshaft relative to other currencies (Gold Breaks $1007, Attack of the Ninja Miners). Equity and oil markets have also rallied with the Dow Jones breaking 10,000 and oil jumping above $80.

Initially, the curious thing was the lack luster performance of the industrial metals. We noticed molybdenum and nickel, both key ingredients to steel production, kept trending downwards as the precious metals danced in the heavens. General Moly responded to the Report's concern with an excellent analysis of moly's price performance which we reprinted in Good Golly Miss Moly. I encourage you to read their entire response which concludes:

"So when we look at the [molybdenum] price declining from the mid $17/lb to the mid $15/lb over the past couple weeks, we suspect one or more of the following is at play. First, the Chinese could be done accumulating their stockpile of moly and thus demand has been reduced. Or, second, some incremental [molybdenum] production from either China or the western world could be coming back online, increasing relative supply."

My takeaway from this line of argument is that moly price is following the expected laws of supply and demand. Even though it took another jog down to $11.75 last week, I suspect moly continues to obey supply/demand fundamentals as miners (supply) and the global steel community (demand) seek equilibrium in the global recovery.

Perhaps not so for other metals and that brings us to Dog's note. He suggested I look at nickel, zinc and copper which have been fairly range bound during the precious metal rally. Lo and behold, it appears that these metals have now caught "gold fever" too. Here is a one-month chart of nickel, zinc and copper rising as molybdenum falls.


What's going on? The Wall Street Journal has an interesting view on copper which broke the elusive $3 level only last week:

"Although the weakening dollar and the generally more positive outlook for the metals sector is certainly providing support, brokers remain confused at the gains[in copper price].

Poor physical-market conditions are failing to provide the rationale for the move in copper, a metal used in industrial applications like housing and construction. But brokers say they won't take their money off the table and go short in case they miss yet another leg up for the base metals complex.

'A wall of money is playing into the hands of market bulls,' said Ole Hansen, manager for futures and fixed income at Saxo Bank.

The latest U.S. Commodity Futures Trading Commission Commitments of Traders report showed speculative long positions have reached the highest level since January 2006. 'This trend is confirming our view that the last price increase was predominantly driven by speculation and downside risk is building up," said Eugen Weinberg of Commerzbank. (WSJ, 10/26/2009)

Ah-ha! I see what Dog is telling me. Molybdenum, a less attractive metal for speculation, is continuing along a rational supply/demand path while its more glamourous cousins (copper, nickel and zinc) are being inflated by speculators with a lot of cheap money in their pockets. Have we seen this movie before?

The Wall Street Journal article concludes:

"Few [analysts] deny that several markets, such as copper, have started to see the kind of improvement in their underlying fundamentals that would justify the current prices, but only perhaps in 2010. Privately, many see the moves as too swift, too soon, and say the divergence between the underlying and futures prices has become extreme." (WSJ, 10/26,2009)

So is molybdenum the honest metal in a crowded ballroom filling with tiny bubbles? Maybe Dog will return in several months and we can chat more over a cup of joe in Monday's early morning hours.

Have a good week, buckaroos.

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" is below 25, smooth markets expected in the near term (what's this?)

Yellow light is ON for our fuel gauge (oil over $80/barrel)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is up $0.37 in early trading to $80.87 (December contract); Gold is down $0.6 to $1055.8 (December contract, most active); Silver is down $0.018 to $17.700 (December contract); Copper is up $.0275 to $3.0620 (December contract); Molybdenum is steady at $11.75.

The DOW is down 30.38 points to 9941.80; the S&P 500, down 2.73 points to 10076.87. The miners are mixed:

Barrick (ABX) $37.51 down 0.16%
Newmont (NEM) $45.52 down 0.87%
General Moly (Eureka Moly, LLC) (GMO) $2.70 up 0.37%
Freeport McMoran (FCX) $82.08 up 0.90% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are happy, (a "tell" for General Moly):

Nucor (NUE) $44.32 up 0.34% - domestic steel manufacturing
ArcelorMittal (MT) $38.66 up 1.26% - global steel producer
POSCO (PKX) $117.69 up 4.78% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up% to $1,255,178.81 (what is this?).

Cheers,

Colonel Possum

A Big Step into the Future for Eureka County?

Morning Miners!

It is 5:51 AM. Let me pour you a cup of that famous Raine's TGIF coffee and tell you about some exciting news for Eureka County. This morning I received a news wire from Western Lithium (WLC) announcing their intention to acquire Rocky Mountain Resources. Here's the link:

Western Lithium to Acquire Rocky Mountain Resources

Why has this got the ole Colonel on his third cup of Scott's red label brand? Allow me to connect the dots. On September 28th the Report told you about Western Lithium and their lithium carbonate project in Kings Valley up in Humboldt County (The Next Big Thing in Northern Nevada?). This may become great news for Nevada because "Western Lithium is positioning itself as a major U.S.-based supplier to support the rising global demand for lithium carbonate that is expected from the increased use of mobile electronics and hybrid/electric vehicles."


In our September article we learned that WLC has potentially the world's largest source of high quality lithium carbonate which is accessible by low cost open pit mining. The more traditional technique is brine extraction used to recover lithium from salt flats. A good example of this is the Foote Mineral deposits, currently operated by Chemetall, in the Clayton Valley just west of Goldfield. Presently, Bolivia has the most known reserves of this variety but their Uyuni salt flats have a fairly poor magnesium-to-lithium ratio. Although the Chinese are trying to scoop up this resource the poor ratio makes extraction economics costly (Not So Hotsi in Potsi, Cap and Trade Stumbles, 8/18/09).

What has all this to do with Eureka County? If the WLC acquisition of Rocky Mountain Resources succeeds, they pick up their Gibellini development stage Vanadium project in the southeast corner of our county. The Gibellini mine site is south of Fish Creek in the western foothills of the Little Smoky Valley.


This is an important tie because in their words, "Vanadium has the potential to become an important element for future battery chemistries together with lithium-ion chemistries. The companies believe that a combination of Nevada based strategic metals for applications in electrical storage and other industrial uses will provide operational and corporate synergies, and accretive value to shareholders."

So folks, we may be joining Humboldt County on a long but exciting journey to the electrical future of our country, a future not dependent on foreign resources but supported by strategic materials in our own backyard. That deserves a Colonel Yee-ha for our state, our county and its future generations.

Let's wish Western Lithium and Rocky Mountain Resources the best of luck on this very important first step.

The thumbnail photo today shows a specimum of Huemulite, an
anhydrous vanadium oxysalt taken from the Gibellini Mining District.

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" is below 25, smooth markets expected in the near term (what's this?)

Yellow light is ON for our fuel gauge (oil over $80/barrel)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is up $0.10 in early trading to $81.92 (December contract); Gold is up $9.0 to $1067.0 (December contract, most active); Silver is up $0.330 to $17.875 (December contract); Copper is up $.0520 to $3.0500 (December contract); Molybdenum drops to $11.75.

The DOW is down 88.95 points to 9992.36; the S&P 500, down 3.46 points to 1082.87. The miners are crabby:

Barrick (ABX) $37.68 down 0.66%
Newmont (NEM) $45.37 down 0.33%
General Moly (Eureka Moly, LLC) (GMO) $2.74 down 2.49%
Freeport McMoran (FCX) $82.45 down 0.64% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are grumpy, (a "tell" for General Moly):

Nucor (NUE) $44.07 down 0.25% - domestic steel manufacturing
ArcelorMittal (MT) $38.11 down 1.78% - global steel producer
POSCO (PKX) $113.13 down 0.21% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 1.95% to $1,251,937.93 (what is this?).

Cheers,

Colonel Possum

Headline Photographs by Mariana Titus; "Courthouse Reflections"

The Next Big Thing in Northern Nevada?

Morning Miners!

It is 6:00 AM sharp. Grab a cup and and help the ole Colonel mount a tire so we can get this week on the road. First let's chat about some exciting news a bit north of here. This may take a while to develop but the mission of the Report is look beyond our foothills and peek in tomorrow's canyon every chance we can.


Although lithium is our lightest metal it is making a heavy footprint in modern energy storage devices. As costs come down, lithium batteries are competing more and more with the commonplace nicad and NiMH (nickel metal hydrate) variety. On a small scale this includes computers, game-playing devices and eventually power tools. Larger applications include production and future prototype electric and hybrid-electric vehicles. With the push to reduce fossil fuel emissions, the demand for lithium will no doubt increase dramatically as electric propulsion alternatives become more practical and affordable.


This August, The Report talked about the world's largest lithium reserve in the Uyuni Salt Flats of Bolivia (Not So Hotsi in Potsi, Cap and Trade Stumbles, 8/18/09). The Colonel expressed concern then that the Chinese may grab this resource in a part of South America not too fond of the United States. Here's where some of today's good news begins. Brine extraction is the technique used to recover lithium from salt flats such as the Uyuni. Although Bolivia has the most known reserves it has a fairly poor magnesium-to-lithium ratio. This ratio is used to assess the economic viability of the process with 11:1 and 12:1 considered good (lower ratio is better). The Uyuni ratio is 30:1 which is a real challenge for developing low cost lithium not to mention the political instability in the area.

The only producer of lithium in North America has a good ratio and is right here in our state. The Foote Mineral deposits, currently operated by Chemetall, are close to Silver Peak in the Clayton Valley just west of Goldfield. This site has operated since 1967 and other mining companies such as Rodinia Minerals Ltd. and Amerpro Resources are exploring for new deposits in the valley to meet future demand.


That's encouraging but the story gets even better in Northern Nevada. There is a second lithium extraction process that involves mining lithium carbonate from close to the surface hectronite clay formations. The best approach is open pit mining and that deserves a Colonel Yee-ha! Chevron did the original explorations in Humboldt County's Kings Valley which is being continued with gusto by Western Lithium. This area promises to hold the largest lithium reserve in North America. There is an exciting video about Kings Valley and the mining prospects on the Western Lithium Web site (select the "projects" tab):

Western Lithium

MineWeb carries a terrific Gold Report overview on the future of lithium:

Lithium leading the charge

And finally, Rodinia Minerals has a brief discussion on the lithium future in Clayton Valley:

Clayton Valley, Nevada

Lots of stuff to do on your Monday break buckaroos!

Enough futurama, let's walk the walk:

CAUTION: 4-WD is ON (the VIX or "fear index" above 25 for the third day, off-road conditions for markets possible, what's this?)

Yellow light is ON for possible adverse regulation/legislation (mercury emissions)

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Oil is up $0.79 in early trading to $66.81 (November contract); Gold is up $3.5 to $995.1 (December contract, most active); Silver is up$0.115 to $16.175 (December contract); Copper is up $.0335 to $2.7070 (December contract); Molybdenum is steady at $14.00.

The DOW is up 126.21 points to 9791.40; the S&P 500, up 15.94 points to 1060.32. The miners are happy:

Barrick (ABX) $36.97 up 2.29%
Newmont (NEM) $43.44 up 1.43%
General Moly (Eureka Moly, LLC) (GMO) $3.20 up 3.66%
Freeport McMoran (FCX) $68.38 up 2.53% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are happy too, (a "tell" for General Moly):

Nucor (NUE) $47.16 up 1.42% - domestic steel manufacturing
ArcelorMittal (MT) $38.32 up 3.65% - global steel producer
POSCO (PKX) $102.42 up 2.61% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 2.01% to $1,192,586.38(what is this?).

Cheers,

Colonel Possum

Headline Photograph by Mariana Titus

Hybrid vehicle photo: Newsoxy, Hybrid Electric Vehicle Advantages

Kings Valley, Nevada, photo: Western Lithium