This Star Writer works underneath my father. It is not easy to get an article in the papers anymore about mining, in fact, since 1997, it has been nigh impossible (draw your own conclusions about that one ). There IS INTEREST in writing an article about this strange little company called Patricia. It won't be all good though. Should we get it done? There might be quite an angle to it, about how the company shuns publicity though.
Precious discovery TheStar.com - Business - Precious discovery
Geologists digging for copper up north last year stumbled upon a potential motherlode of high-grade platinum
January 29, 2007
Lisa Wright
business reporter
A funny thing happened to the boys at MetalCORP Ltd. when they were looking for copper near Fort Frances last year: they stumbled on to something rare indeed.
"We were trying to advance an old copper deposit identified by Noranda back in the '60s. I said, `This looks like a rock that should have platinum in it.' And lo and behold, it was there," says Aubrey Eveleigh, vice president of exploration for the junior explorer.
"It's a humbling business. You think you know it all and then you get surprises," says the geologist of the discovery at the company's promising North Rock property.
Surprise is an understatement. While PGMs, or platinum group metals, are often found in tandem with base metals (they're all over Sudbury), it's quite unusual to find the precious metal at such a high grade when looking for ubiquitous copper – and rarer still that it turned up in northern Ontario to the degree that it could warrant building a platinum mine. Nearly all of the world's supply comes from South Africa and Russia.
"Sometimes in mining when you're looking for X you find Y. The company that found (CVRD-Inco Ltd.'s nickel deposit) Voisey's Bay was looking for diamonds," notes industry analyst Barry Allan of Research Capital Corp. in Toronto.
And what a time for an unexpected discovery in the Canadian Shield now that the market for the silvery-white metal is hotter than ever.
Joining in on the strong resources market of the last few years, platinum has been trading consistently above the $1,000 (U.S.) an ounce mark for the last year, with no signs of slipping any time soon. And it is rapidly approaching $1,200, closing at $1,174.50 on Friday, up $1.50.
Rumours of an ETF, or exchange-traded fund, that would give investors exposure to the commodity as it already does in gold and silver, sent the price of the precious metal to record levels at the end of last year.
"There are rumours that an ETF is imminent," says Jessica Cross, chief executive of London-based Virtual Metals Research and Consulting.
"There's a lot of hype around it with the metal price as high as it's been," she says.
Besides being pricey, platinum is both pretty and practical, coveted for both adornment and industrial uses, which explains why it's been historically known as the magic metal. It protects the environment too. More than one-third of all platinum supplied to international markets each year is used in catalytic converters, which are fitted to most new cars to control toxic emissions.
Physical supply has been in a deficit for eight years while demand is expected to remain robust this year despite any economic slowdown that could hurt car sales in some regions.
Some forecasters expect worldwide demand of the heavy metal to increase about 10 per cent this year as the use of catalytic converters spreads with increasingly stringent environmental legislation around the globe.
With the bullion price as fickle as it's been in the last while, you could say it's the new gold standard, enjoying more cachet than the yellow metal considering all the platinum albums, credit cards and bling out there. And unlike the run-up in gold last year, the price of the pretty metal has not settled back, making it even more alluring to investors.
"Platinum certainly is a more premium-priced commodity at the ultra-high end of the spectrum that's done quite well, and I see no evidence that's going to change anytime soon," says Allan.
At the same time, it's so rare that it's usually only found in minuscule amounts. All of the platinum ever mined would only fill your living room. Yet it's vital to the production of 20 per cent of the world's consumer goods, from eyeglasses and explosives to paint and pacemakers.
So it only makes sense that prospectors are scouring northern Ontario trying to find more of it.
"With the increase in commodity prices, there is significant platinum exploration going on in the Sudbury and Thunder Bay area," says Craig Ravnaas, district geologist for the Ontario Geological Survey's office in Kenora.
Just $2 million was spent on platinum exploration in Ontario in 1998, compared to $24 million in 2005. Exploration overall for base and precious metals in Ontario exploded to a record $345 million last year, and it's mainly being driven by the juniors.
"If it's hard and it's coming out of the ground, chances are someone's looking for it," jokes Allan of the ongoing metals bull run.
The number of active mining claims has reached record levels in the province, going from 165,000 in 1995 to an all-time high of 213,000 claims being staked, mainly in northern Ontario, in 2005.
"Exploration has really picked up and it has been every year in the current cycle because commodity prices have also increased every year. It's enabled these companies to raise money where when times were lean you couldn't raise funds to run your exploration program," says Ravnaas.
"What we traditionally had was an interest in gold and base metals, but we're seeing a lot more in platinum and diamonds lately," notes Brock Greenwell, a senior statistical analyst at the Ontario Geological Survey, which tracks data in the province's mining sector.
That's why the grading from core samples at North Rock, located 300 kilometres west of Thunder Bay, is so encouraging at 12.2 grams per tonne over 3.7 metres. By comparison, the average grade of platinum in South Africa is 4 to 5 grams per tonne, a level that's also considered high grade.
"It was pretty nice. When you hit something like that, it's pretty hard to ignore, and it's getting everyone's attention," says Eveleigh.
The find last spring took MetalCORP shares from a 35-cent penny stock to $2.35 on the TSX Venture Exchange. It closed at $1.80 on Friday.
"We've signed confidentiality agreements with four different mining companies, Canadian and South African," he says of the interest coming from the seniors.
"We're ready to hit the ground in March and drill throughout the year. Once you find it, you've got to keep with it," adds Eveleigh.
Geologist Mike Jones can relate.
After a career sprinkled with gold and diamonds and surviving the industry downturn of the late '90s, he decided to take a year off in 1999 to do some skiing in Banff. He also spent a lot of time reading about which metals were going to be hot and his compass pointed him toward platinum. Back then the average price was $380 an ounce.
"It was certainly a great time to start in the business," says Jones, chief executive of Vancouver-based Platinum Group Metals Ltd.
The junior mining company aims to be an emerging producer of the useful greyish stuff and is now focused on moving its near-surface South African joint venture with Anglo Platinum toward mine development in the Western Bushveld, where 70 per cent of the world's supply is produced.
"Platinum is an essential precious metal. It's not optional. And it's extremely rare. Gold is a business everyone knows. But the platinum business is like a parking lot. There are only so many spaces," he says.
Jones says he expects the long-term price to hover around $900 an ounce over the next 20 years.
"I think it's an excellent time to be in platinum. I don't see any fundamental changes in either production, demand or uses," says Jones.
Only about 7 million ounces of platinum are mined each year compared to 100 million ounces of gold. Louis XVI of France was so convinced of its special qualities that he proclaimed platinum the only metal fit for royalty.
Unlike gold and silver, there are no big platinum stockpiles to protect against significant supply disruptions. It takes about 10 tonnes of raw ore to produce just one pure ounce of platinum.
"It's unusual for North America to have such high-grade platinum. It's usually in South Africa," says Eveleigh.
"We didn't go there looking to get into it but it's certainly got us more focused on platinum now."
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