Wednesday 26th October 2016

Resource Clips

Inescapable but obscure

Industrial minerals, their uses and opportunities, are the topic of an April 2 Vancouver conference

by Greg Klein

Industrial minerals manage to be inescapable but obscure. Like base metals, and much more so than precious metals, they’re all around us. If they weren’t, our lives would be very different. Yet investors and even end users often show little awareness of the process of finding and extracting these commodities. Organizers of an April 2 conference in Vancouver hope to change that.

The free event is part of the Industrial Minerals International Congress and Exhibition, this year celebrating its 40th anniversary in Vancouver from April 1 to 3. As usual the event brings together industry leaders, often end users who are experts in their own niche markets. A new feature, the April 2 Finance Session, “will bring financiers as well as end users together with exploration companies,” says one of the organizers, Zimtu Capital TSXV:ZC president Dave Hodge.

Consider the car, bike or transit vehicle you likely use to get around. Apart from the better known metal alloys, a number of other minerals are used to manufacture its various components. Consider the additional minerals used just to enable the manufacturing process—to build the plants, refineries, refractories, tools, machinery, computers. Consider the minerals used to find, obtain and transport those commodities.

Industrial minerals, their uses and opportunities, are the topic of an April 2 Vancouver conference

So many of the products we take for granted
rely on little-known commodities for their manufacture.

Or start all over again with a different type of product, from necessities like food, clothing and communications to luxuries like entertainment. They depend on an awful lot of industrial minerals.

“For the most part they’re considered critical commodities, in that supply is fairly tight,” explains Hodge. “In general they rarely have practical substitutes.”

According to Zimtu head of research Derek Hamill, “One of the fundamental differences between base metals or energy metals versus industrial minerals is the exchange. Usually copper will trade on a major exchange so you can follow the pricing. Oil is very similar but the price for commodities in the industrial sector is opaque. So in this session we’re trying to show people some of the commodities and their potential. I think they’ll be surprised, actually.”

Hodge adds, “As the global commodity scene tightens, it’s more important for companies that buy industrial minerals, as well as investors, to understand exploration.”

As a prospect generator, Zimtu’s actively involved in matching exploration companies with properties, often involving relatively obscure commodities, and helping build those companies. But ask Hodge if end users understand the exploration process and he laughs out loud. “Absolutely not!” he exclaims. “The two businesses are so different. In many respects industrial minerals users follow very traditional business formats where they try to make money on every transaction. Of course that’s very, very different from mineral exploration and it’s challenging for either of those two sides to understand completely how the other side operates.”

Chaired by Laura Syrett, prices editor for the authoritative journal Industrial Minerals, the Finance Session features a keynote speech by Arie Papernick of Secutor Capital Management Corp’s Investment Banking department. Hamill moderates a panel discussion featuring representatives of five companies pursuing different minerals. An informal networking opportunity follows.

“The panel will discuss topics including current developments and potential growth factors,” Hamill says. “We’ll also discuss challenges like how to calculate the net asset value of a project in an opaque pricing market and the risks people face. We’ll look at the progress of individual projects, potential end users, financing and other subjects.”

Hamill notes some growing awareness among end users already. “Especially with conflict minerals legislation in the U.S., there’s more concern about where supply comes from,” he says. “There’s security of supply issues too, when sources come from a country like China.”

Hodge sees the event offering synergies for explorers, investors and end users who can “learn how to secure a more steady supply of the very minerals they grow their business with.”

Among the companies present, Prima Fluorspar TSXV:PF has an early-stage project in northern British Columbia and an LOI to acquire the Delgerkhan mine in Mongolia, a past-producer with near-term potential.

Especially with conflict minerals legislation in the U.S., there’s more concern about where supply comes from. There’s security of supply issues too, when sources come from a country like China.—Derek Hamill, head of research for Zimtu Capital

Commerce Resources TSXV:CCE has advanced its Upper Fir tantalum-niobium deposit in southeastern B.C. to the preliminary economic assessment stage and is moving its Ashram rare earth deposit in Quebec’s Labrador Trough towards pre-feasibility.

Canadian Metals CSE:CME focuses on high-purity silica sand properties in B.C. and Quebec. Big North Graphite TSXV:NRT is test-mining and selling amorphous graphite from a joint venture in Mexico and holds flake graphite properties in Mexico and Canada.

Lakeland Resources TSXV:LK holds interests in 15 Saskatchewan uranium properties, one of them showing surface boulder samples grading up to 4.28% uranium oxide (U3O8) and some of the Athabasca Basin’s highest radon readings.

Among the conference sponsors is the Canadian Securities Exchange. James Black, VP of listings development, says that Hodge is “very passionate about this space, he thinks there’s a ton of potential in it and we’d like to be alongside those prospects letting them know what we’re doing.”

“We’re happy to look at all sectors but industrial minerals is an area that’s gaining more interest, so we like to be where the interest is. We like to support Vancouver and be front and centre when these things happen.”

The fact that Industrial Minerals chose Vancouver for its congress “is very significant,” says Hodge. “At this time in particular, with commodities in general being on the low end of the supply scale, there’s a need for exploration of all kinds of minerals, including industrial minerals. Vancouver is essentially the global centre of exploration.”

The Industrial Minerals Finance Session takes place April 2, from 3:00 to 5:00 p.m., at the Sheraton Wall Centre in Vancouver. Refreshments and informal networking follows. For free attendance, RSVP to Matt Sroka at

Disclaimer: Zimtu Capital Corp, Lakeland Resources Inc, Prima Fluorspar Corp and Commerce Resources Corp are clients of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in those companies.

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