Tuesday 27th September 2016

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First-mover advantages

Electra Stone sees opportunities as the first publicly traded jade company

by Greg Klein

What prompted Electra Stone TSXV:ELT to become the world’s first publicly traded company to pursue jade? For starters, president John Costigan points out a tremendous price increase. “In 2004, A-grade B.C. jade was $40 a kilo. Last year it sold for $1,800 a kilo.” Obviously something big was happening, but under the radar of other juniors. Taking advantage of British Columbia’s importance to global jade supply, Electra began acquiring properties, not to mention expertise. Now, with summer exploration slated to begin imminently, the company sees jade opportunities beyond exploration and mining.

Electra Stone sees opportunities as the first publicly traded jade company

British Columbia supplies about
75% of the world’s nephrite jade, presenting opportunities that Electra believes other juniors have missed.

“The Chinese have virtually mined out all their domestic jade,” Costigan says. “But they have an emotional and spiritual connection to this stone. It’s far more significant than an attachment to say gold or silver. The Chinese will actually use jade as a currency and as a storehouse of value, much like gold but it has a spiritual element to it. According to belief, jade, especially green jade or B.C. jade, can confer good health and good luck upon oneself.”

Of the two types of jade, jadeite is the more costly stuff, which comes in different colours from Myanmar. Dwindling supplies and a re-awakened interest in China’s traditional jade have increased consumer interest in nephrite jade, of which B.C. produces about 75% of global supply.

A-grade nephrite goes into jewelry and carvings. B-grade finds uses in furniture or architectural adornments. Costigan sees a neglected market for B-grade jade. With attributes largely overlooked by B.C. suppliers, jade’s characteristics make it an ideal dimensional stone, he says.

“First of all, it’s harder than granite or steel,” Costigan explains. “It’s non-porous so it doesn’t stain. You can get a mirror polish on this stone. Its translucency also adds to its functional value. When back-lit, you get this soft, green glow. You combine all these qualities and you have a fantastic, beautiful, strong stone that will compete with high-end marble. So it has not only functional characteristics in terms of its architectural applications, but aesthetically it’s very pleasing.”

He adds, “The Asian community has used it for walls, fireplaces, trim, tables, table legs—there’s a panorama of uses for B.C. jade that’s barely been touched.”

Already an industrial minerals company, Electra began compiling its jade portfolio earlier this year with three properties in northern B.C.’s Liard mining division. Two were acquired through staking, the 2,225-hectare Rustic project and the 478-hectare Kutcho property. Last month Electra signed a 100% option on the 1,490-hectare Polar placer jade project, about one kilometre north of the Polar Jade mine, one of Canada’s most important jade operations.

Barely south of 60, Liard’s climate allows only a short working season. Electra has a 90-day prospecting program scheduled to begin shortly, with the four-person crew working under a seasoned jade prospector. Although the campaign will cover as much of Electra’s ground as possible, Polar will get particular attention.

Should the properties become operational, relatively simple quarry or placer mining would take place. No processing would be required, Costigan says.

You combine all these qualities and you have a fantastic, beautiful, strong stone that will compete with high-end marble.—John Costigan, president of Electra Stone

With the appointment of CiCi Yim to Electra’s advisory board, the company gained the expertise of the chief gemologist and jade specialist for the 24K Gold Company. Among other accomplishments, she holds a diploma from the Hong Kong Institute of Gemology and an MBA in supply chain management from Birmingham University in the UK. Electra has also created a jade marketing team and joined the Canada National Jade Research Institute.

Longer-term goals would have the company become a vertically integrated miner with its own trading arm and manufacturing operations.

A private placement closed this month with $850,000 in convertible debentures, of which $350,000 came from Costigan and the rest from a Chinese investor. Electra hopes to close another $750,000 placement soon while waiting for a shareholder vote on another $2-million placement by an individual subscriber that would result in change of control for the company.

Revenue comes to Electra from its Apple Bay project, a chalky geyserite quarry on Vancouver Island. Also known as aluminum silica, the product is shipped to a cement manufacturer in Seattle.

Having “inherited” Apple Bay as a money-losing operation during Electra’s restructuring, Costigan says, “We made some big changes and we’ve turned the corner. Our first profitable shipment was a few months ago.”

Meanwhile Electra shares began this month at $0.10, twice their mid-May price, and have so far spent most of June doing even better, reaching a 52-week high of $0.14 on June 18 and again on June 19. Not surprisingly, the stock’s performance boosts Costigan’s confidence. “As of today we’re the only public jade company in the world,” he says. “And that gives us a lot of first-mover advantages.”


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