Tuesday 29th September 2020

Resource Clips

Neglected potential

Investors increasingly realize how industrial minerals permeate our lives

by Greg Klein

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Lacking the aura of precious metals and the prominence of base metals, industrial minerals play little-known but essential roles throughout our society. So it was largely industry insiders who attended an October 22 to 23 Vancouver conference on the subject. One afternoon was devoted to the most elusive commodity of all—money. Without that stuff, the other commodities can’t be found. Accordingly, four speakers addressed different ways of funding explorers and producers, offering insights that might also benefit retail investors.

The event was the 24th annual Canadian Conference on Markets for Industrial Minerals, hosted by Blendon Information Services. Among the attendees was Michel Dumont, a senior commodity analyst with Natural Resources Canada. Speaking to ResourceClips.com, he said the meeting is the only Canadian event of its kind, providing some of the best coverage available on North American companies.

Industrial minerals often differ from their exchange-traded counterparts because miners have to match the distinct qualities of a deposit to a specific end user’s needs, he explained. In other words, producers have to find a customer who matches the deposit, or even the other way around.

Investors increasingly realize how industrial minerals permeate our lives

The automotive industry alone uses any number of minerals,
some of them relatively obscure, for manufacture and operation.

That doesn’t make it easier for miners and explorers to find investors. End users are also misunderstood, Dumont pointed out. “People are not aware that they live inside industrial minerals end products, be it paint, ceramics, pharmaceuticals. People will take Tums and they don’t know that it’s calcium carbonate. But the calcium carbonate can also be used to make the windshield wipers of your vehicle or the linoleum tiles on the floor. A lot of people aren’t aware of their surroundings and what goes into their lifestyle. The same goes for the companies that lend money.”

Investor awareness is coming, though. Dumont credits the Industrial Minerals Association North America and its European predecessor for testifying to their products’ ubiquity.

Presentations and conversations alike focused on topics like frac sand, dolomite, hectorite, gilsonite and some of salt’s 14,000 uses. If those topics appear dry, the talk wasn’t. “We gained a reputation here in Vancouver as being the go-to guys for weird commodities,” joked Zimtu Capital TSXV:ZC president Dave Hodge. In a presentation about financing industrial commodities through public markets he asked, “How’d you like to have that title? I walk down the street and people say, ‘That’s the guy that does weird commodities.’”

Some of them aren’t so weird anymore, judging by their increasing prominence. Zimtu was well ahead of the pack with graphite. One of the company’s core holdings, Commerce Resources TSXV:CCE, has taken its Blue River tantalum-niobium project in British Columbia and Ashram rare earths project in Quebec both to preliminary economic assessment. Another core holding, Prima Fluorspar TSXV:PF, has an early stage project in B.C. and a letter of intent to acquire a past-producer with near-term potential in Mongolia.

Although industrial minerals differ from commodities like copper, gold and silver, Hodge noted, it’s still the juniors’ job to discover and develop projects.

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