Morning Miners!
It is 5:31 AM. Have a cup of joe and let's look for something other than gold and molybdenum in "them thar hills" to the north of town. Last month I promised to do a followup on one of earth's rarest elements, rhenium. What peaked the ole Colonel's interest was a recent statement by Kennecott project manager, Doug Stauffer, of their Bingham copper mine in Utah, "The rhenium market is a growing high-margin market and we're looking to become a stable and secure producer of that material." (Rhenium - Will the Sun Shine on One of Earth's Rarest Elements?, Eureka Miner's Market Report, 4/29/2010)
Bingham is primarily a copper mine but they boast good prospects for molybdenum and other metals such as rhenium that exist within their copper porphyry. Rhenium is a key ingredient in nickel-based super-alloys used in the components for jet engines. I wondered at the time whether there may be some other uses for this curious transition metal in the emerging alternative energy industry. As the 4/29 article suggests, the Chinese have demonstrated some research interest in rhenium to improve the light absorption properties of organic photovoltaic cells used to convert solar energy to electricity. At that time I wondered if a global expansion of solar farms that use large-scale organic solar arrays may provide another commercial use for rhenium.
When I get this far down on the "what if?" mineshaft, the Colonel likes to ask the experts for a sanity check. This boils down to two basic questions: (1)is there enough rhenium in our backyard to justify commercial exploitation and, (2) what shapes the real future demand for Miss Moly's kissing cousin? (rhenium is a transition metal kitty-corner to molybdenum on the periodic table of the elements)
I asked Tim Arnold, Mt. Hope Project Manager, for his thoughts on question #1. An early assay report on General Moly's Mt. Hope, one of the world’s largest and highest-grade deposits of undeveloped molybdenum (Mo), indicated that rhenium (Re) may exist in parts per million (PPM) concentrations. This may seem insignificant but rhenium has an average concentration of only 1 part per billion (PPB) in the Earth's crust. Along with gold (Au), rhenium belongs to the nine rarest elements on earth. Gold is about 4 times more abundant so PPMs of this stuff is nothing to ignore. This chart shows the relative abundance of Mo, Au and Re in relation to other metals on a logarithmic scale:
This was Tim's response to the Report,
"We very definitely will be looking at Rhenium. It is such a scarce element, that it is hard to identify as an 'ore', because the samples taken are typically in PPM or PPB. That is why we will be doing more investigation once we have a molybdenum concentrate. Rhenium floats along with the moly, so we will be able to see it there, and then extract if it makes sense."
I posed the second question to Dr. Jon Hykawy of Byron Capital Markets, a leading analyst on clean technologies/alternative energy and the metals they employ (see note 1 for a brief resume) We first met Dr. Hykawy in the March 22nd Report - A Third Tank on Our Hill? Lithium & Vanadium Update. He was less enthusiastic about the commercial use of rhenium in organic cells:
"...the [solar photovoltaic] technology used really dictates what other metals are required. Almost every organic cell design needs some form of metal dopant, but I have seen them requiring everything from rhenium to lead to really exotic stuff. I would put my money on something that used lead over something that used rhenium, just on a price basis."
However, Dr. Hykawy offered this valuable insight:
"But, I would also be pretty excited about rhenium anyway. It is refractory as all get out, and as more stringent regs come into effect for jet engines and their fuel efficiency and emissions, the only way to make these things work that much better is to run them at higher and higher temps, and alloys containing rhenium are a big part of that."
A consistent theme of this Report is the importance of strategic metals to the future of Northern Nevada and Eureka County. I think from the above responses we can add rhenium to our watch-list of important metals on our horizon, pardner.
By the by, COMEX gold broke $1220 this morning as concerns about European sovereign debt returned to the marketplace. Silver followed and is now in $19 country. I can collect my bet that the latter would occur before Memorial Day - Yee-ha!
Enough talk, let's walk the walk:
4-WD is ON - rough roads in the marketplace; the VIX or "fear index" is back in 30 territory; metals & miners are on shaky timber with benchmark FCX trading in the low $70s below its 200-day average of $75 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment
The YELLOW light returns for Stable Markets with the VIX above the 30 level again (what's this?)
The GREEN light returns for Investor Confidence with the possibility of a >10% correction in the broader markets possible but less likely
The GREEN light remains turned on our Fuel Gauge with oil below $80 (although this may only be a brief respite)
A ORANGE light is ON for possible adverse regulation/legislation: Mine Safety Violations, Miner's claim fee, Miner taxation, Cortez Hills, mercury emissions &
General Moly Mt. Hope Water Rights
Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)
NYMEX/COMEX: Oil is down $0.61 in early trading to $76.19 (June contract, most active); Gold is up $21.8 to $1222.6 (June contract, most active); Silver is up $0.563 to $19.115 (July contract); Copper is down $0.0545 to $3.1735 (July contract)
Western Molybdenum Oxide sits at $17.75, LME moly 3-month seller's contract sits at $18.14
The DOW is down 66.36 points to 10,718.78; the S&P 500 is down 8.82 to 1150.91. The miners are mixed:
Barrick (ABX) $45.91 up 4.55%
Newmont (NEM) $57.66 up 3.91%
US Gold (UXG) $3.84 up 5.21%
General Moly (Eureka Moly, LLC) (GMO) $3.95 down 1.00%
Thompson Creek (TC) $11.28 up 0.18%
Freeport-McMoRan (FCX) $71.36 down 1.57% (a bellwether mining stock spanning copper, gols & molybdenum)
The Steels are down, (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $35.69 down 3.54% - global steel producer
POSCO (PKX) $103.33 down 3.52% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is down 0.33% to $1,404,773.05 (what's this?).
Cheers,
Colonel Possum
Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market
Note 1: (Mineweb) Toronto-based Jon Hykawy, who earned his PhD in physics (University of Manitoba, 1991) and an MBA (Queen's University, 1997), spent four years in capital markets as a clean technologies/alternative energy analyst before being named lithium analyst at Byron Capital Markets in August. Jon began his career in the investment industry in 2000, originally working as a technology analyst concentrating on the lithium space. Jon has become a valuable resource on everything about the light, silver-white metal-from supply and demand to exploration and production. He has extensive experience in the solar, wind and battery industries, conducting significant research in the areas of rechargeable batteries, from alkaline to lithium-ion to flow batteries.
Headline photograph by Mariana Titus
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