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Volume 7 Issu

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PublicationsMailAgreement

No.4

0845066

www.resourceworld.com

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MINING | O I L & GAS | ALTERNATIVE ENERG

INVE

ST

P

PC Go expore oPicke Crow Go Mie p.28

Exploring Albania p. 2

POTASHContributing to the Worlds Food Security

The McFaulds lakRing of fiRe

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3/48uly 2009 www.resourceworld.com

CONTENTS JULY 2009

FEATURES

The McFaulds Lake Ring o Fire6by Ellsworth Dickson

Potash contributing to the 13worlds ood security

by Jennier Getsinger, PhD, P.Geo.

PC Gold exploring old 28Pickle Crow Gold Mine

by Ellsworth Dickson

InvESTmEnT

BROKERS PICKS19

Serengeti Resources developingKwanika tonnage

by Dorothy Hoert

INSIGHTS & INVESTMENTS 20

Why Albania?

by Eric Hoesgen & Dennis Hoesgen

SPECULATIONS 22

Interest rates and precious metalsby Leonard Melman

AT THE MARKET 23

Sell in May No Way!by Rod Blake

FEARLESS TALK24

New excellence: Less awulby H.R. Tschudi

mInIng

Laurentian Goldeld/Kinross orm 23Uchi Exploration Alliance


Building Solomons 25Gold Mine

byThomas Schuster

AUSTRALIAN UPDATE 27OceanaGold records our quarters

o increased gold salesby Greg Barns

HOT ROCKS30Golden Band Resources Inc.

IMPACT Silver Corp.

Alexco Resource cleans up/explores 31Keno Hill, Yukon

by Mike Niehuser

Electra Gold acquires another 33BC coal project

OIl & gASChevron recovers rst oil 34

rom Tahiti eld

THE OIL PATCH REPORT 35Texalta Petroleum targets

both sides o globeby Joel Chury

AlTERnATIvE EnERgy

ALTERNATIVE ENERGY REVIEW 3 by Joel Bainerma

Legend Power knows how to put 3less vim in your volt

by Peter Caufe

ALTERNATIVE ENERGY IN THE NEWS 3BP Solar/SolarEdge Technologies In

Plutonic Power/General ElectriRentech In

by Joel Bainerma

DEPARTmEnTS

Editors Comments 4Its a balancing act


OFF THE WIRE 32Brett Resources Inc.Uranium Star Corp.

RESOURCE ROUNDUP 41

The Nanaimo Coal Fields

by Kathrine Moore

Coming Events 42

Reader Response Card 44Advertiser Index

EPILOGUE 46

The worlds second oldestproession?

by David Duval

10%

Cert no. SW-COC-002226

6

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4/484 www.resourceworld.com July 200

Ellsworth Dickson, Editor-in-ChiefEmail: [email protected]

T: 604 484 3800 | 1 877 484 3800 | F: 604 685 3833

February 200

April 200

July 2009Volume 7, Issue 7

Co-PublisherEditor-in-Chie

Ellsworth Dickson

Co-PublisherBusiness Development

Paul Dickson

Contributing EditorsDr. Edward Schiller

David Duval

Robert Simpson

Contributing Writers Rod Blake Peter Cauleld

Joel Chury Jennier GetsingerDennis Hoesgen Eric HoesgenDorothy Hoffert Leonard MelmanKathrine Moore Mike Niehuser

H.R. Tschudi Thomas Schuster

Australian CorrespondentGreg Barns

European CorrespondentJoel Bainerman

Art Director, Design and ProductionJocelyne Lafamme

Circulation1-877-484-3800

Advertising ManagerVancouver, BCIrene Fournier

1-877-484-3800

Calgary, AlbertaOil & Gas Advertising

Christine Perrin403-648-1793

Administrative AssistantRhonda Tobin

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World Magazine Inc., all rights reserved. No part o tmagazine may be reproduced, in whole or in pawithout the expressed permission o the publishReprints available by request at the above addressby emailing: [email protected].

DISCLAIMER:While every eort has been made to ensure taccuracy o inormation contained in ResouWorld Magazine, and the reliability o the source, tpublisher in no way guarantees nor warrants the ormation and is not responsible or errors, omissioor orward looking statements made by advertiserArticles and advertisements in Resource World Magazare not solicitations to buy, hold or sell specic secuties; they are or inormation purposes only.Opinions and recommendations made by contributoor advertisers are not necessarily those o the publishits directors, ocers or employees. Investors should

aware that risk is associated with any security, strateor investment and are advised to seek the counsela competent investment advisor beore making ainvestment, or utilizing any inormation containedthis publication.Subscription, advertising and circulation inormtion can be obtained by visiting our websiwww.resourceworld.com or contacting our oces phone: 1-877-484-3800 or by writing to the addrebelow.

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Issn 1712-253Printed in Canada by Mitchell Press

editor's commentsEl lsworth Dickson

Its a balancing act

We are all aware o how nancial transactions occur at the speed o light as buyersand sellers rom anywhere in the world purchase and sell mineral commodities. The

advent o instant worldwide electronic communications has resulted in metal prices

changing by the minute as buyers and sellers get together.

At the present time, there is a battle between commodity buyers and sellers and it is

anyones guess what the uture may bring. On one hand, we have China taking advan-

tage o low commodity prices and stockpiling huge quantities o copper, nickel,

aluminum, tin, zinc and oil, while, on the other hand, resource companies have been

closing mines which will eventually lead to metal shortages.

Meanwhile, or the rst quarter o 2009, many resource stock investors abandoned

the mining sector ater the big meltdown. This could be seen in a revealing chart in

a recent Ernst & Young mining report that showed the price/earnings ratios o many

industrial sectors. A high price/earning ratio is usually considered an indication o

investors aith in higher uture earnings. The chart showed no less than 35 industrial

sectors with higher P/E ratios than the mining industry. Obviously, or the rst three

months o 2009, investors remained bearish on mining.

However, dont be too discouraged. Turning to the ollowing page in the Ernst &

Young report, there were charts that depicted global metal consumption and produc-

tion. It was clear that, despite economic downturns occurring every ew years, metal

consumption and production have always continued to expand to meet ever-increas-

ing consumption.

The past couple o months have seen metal prices recover somewhat, in part

probably due to Chinas stockpiling, but what will happen when that country has

had its ll? The mining industry will need more than just China to sustain robustmetal prices it needs a more broad-based world economic recovery to maintain

strong metal prices. When metal prices are weak, not only do marginal mining oper-

ations shut down, nobody even wants to explore or metals that have been beaten

down in price. This, o course, impacts the chance o building uture mines that the

world will need.

Along with somewhat increased metal prices, mining company nancings have seen

a recent rise. At rst it was just producing gold companies that ound the easy money;

however, since April, there has been a shit in attitude by private placement investors.

Fear seems to be abating and investors are now helping to nance juniors. But keep

in mind that these recent nancings are at nowhere near the price levels o previous

years, resulting in less money in total being raised or exploration. So, while investors

may be getting back their nerve to a certain degree, junior miners are not out othe woods yet. In the end, it comes down to the balancing act between supply and

demand o commodities. n

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When Contributing Editor Dr. Ed Schiller wrote about the McFaulds Lake min-eral discovery in the May 2008 issue oResource World, he reported on the

staking rush that was taking place ollowing the Noront Resources nickel-

copper-platinum-palladium discovery o the Eagle One mineral deposit in September 2007.

Drill hole NOT-07-05 returned 68.3 metres grading 5.90% nickel, 3.10% copper, 2.87 grams

platinum/tonne and 9.78 grams palladium/tonne.

In a scenario reminiscent o the Voiseys Bay, Labrador, discovery by Diamond Fields,

it was diamonds that were the original target; however, it was volcanic-hosted base and

precious metals that were discovered. This has now been ollowed by another surprise

the discovery o chromium, vanadium and iron. In a recent press release, Freewest

Resources Canada reported drill hole BT-09-37 intersected 174 metres grading 34.1%

The McFaulds lakeRing oF FiRe by Ellsworth Dickso

In a series of pleasant geological surprises, exploration of the McFaulds Lake

Ring of Fire in the James Bay Lowlands of northern Ontario has resulted in

the discovery of a veritable treasure trove of many different metals.

COPPER NICKEL GOLD SILVER PLATINUM PALLADIUM COBALT CHROMIUM VANADIUM TITANIUM IRON ZINC

Let, Dr. James Mungall, PhD., Chie Geologistor Noront, at the ront right is Michael Grey,o Genuity Capital. In the middle-let is OmarMurad, o Thomas Weisel Partners and in thebackground is Craig Stanley o Pinetree CapitaPhoto courtesy Noront Resources Inc.

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chromium (Cr2O

3) at its Black Thor chro-

mite zone.

Located about 600 kilometres north o

Thunder Bay, Ontario, the McFaulds Lake

mineral play is accessed via the town o

Nakina. Situated at the end o both the

road and the railway, Nakina is about 300

road-kilometres north o Thunder Bay. As

such, the town is utilized as a staging cen-

tre by exploration companies active in the

fy-in only McFaulds Lake region. The fat

and swampy region is characterized by a

lack o outcrops as well as inrastructure.Back in 2001, hoping or another dis-

covery like their Victor diamond-bearing

kimberlite 170 kilometres to the east,

DeBeers came up with massive sulphi-

des on a McFaulds Lake area property

optioned rom KWG Resources and Spider

Resources. Not interested in base metals,

De Beers returned the claims to KWG/

Spider which investigated the discovery,

located in the Sachigo Greenstone Belt.

Some new players arrived on the scene;

however, the massive sulphide discoverydidnt trigger a staking rush. It was Noronts

Eagle One discovery that prompted the

major staking rush. Staking the geologically

avourable ground resulted in a claim map

with properties orming a ring; hence, the

Ring o Fire name. Actually, it is not really

a ring, it is more o an arc, or sideways letter

U with some outlier prospects spread out

over a wide area.

Freewests chromite discovery has

placed the McFaulds Lake region under

a new light. The very size o the discov-

ery could lead to a major chromium mine

and smelter. Chromium, or chrome, is

used or more than plating your toaster or

your cars bumper. The shiny metal is an

absolute necessity or the manuacture o

stainless steel due to its natural resistance

to corrosion.

South Arica is the worlds largest pro-

ducer o chromite ores, producing over

50% o the worldwide production o about

20 million tonnes per year. Other chro-mite-mining countries include Zimbabwe,

Kazakhstan, India, Turkey, Russia, Finland,

Brazil, Australia, Iran and Oman. Chromite

ores are converted into what is called erro

chrome to make stainless and heat resistant

steels. Up to 25% o stainless steel consists

o erro chrome. Some 90% o erro chrome

production is used to make stainless steel.

Due to the dwindling supply o erro

chrome, thanks to the booming stainless

steel industry, particulary in China, the price

o erro chrome has soared, and is beingurther pushed higher by a new tari

imposed by India on chromite exports.

Freewest management will probably have

to make some decisions with regard to how

big a mine to build, although a easibility

study has not yet been completed. I the

operation is too small, the economics wont

be optimized. I the mine is too big, food-

ing the market with erro chrome could

drive down prices.

While Freewests chromium discov

ery is exciting, so is Noronts discover

o vanadium and iron in a new type o

mineralization in the Ring o Fire at th

Thunderbird anomaly. Vanadium is used i

specialty steels to add hardness, in alloy

with aluminum and titanium or light

weight uses and in batteries. (In Septembe

Resource World will have a ull report o

vanadium.) Noront has also recently inter

sected chromite in its drilling program.

It is rather unusual or so many dieren

metals to be discovered in one region in sshort a time. Unless it has been blind luck

exploration results to date could be a sig

o many more mineral discoveries to come

Below are updates on the various explorer

active in the McFaulds Lake Ring o Fire.

Black Panther Mining Corp. [BPC

TSXV] can earn up to a 75% interest in

the Seagull/Wol Mountain propert

rom East West Resource Corp. [EWR

TSXV] and Trillium North Minerals Ltd

[TNM-TSXV]. Located about 90 kilometre

northeast o Thunder Bay and south o thRing o Fire region, exploration has discov

ered several layers o copper, nickel an

platinum group metals. To date, about $4.

million has been spent on the propert

with $150,000 budgeted or the curren

program. East West Resource has a numbe

o projects, on its own and with partners

in the McFaulds Lake and outlying areas.

Bold Ventures Inc. [BOL-TSXV] has tw

projects in the McFaulds Lake region: a

Drilling in the Norton Lake area, a joint venturebetween White Tiger Mining Corp., 51%, and

Cascadia International Resources Inc., 49%.Exploration geologist/geophysicist Bob

Middleton, P.Eng, on the let, with diamonddrillers. Photo courtesy White Tiger Mining Corp.

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50% option with Noront on the Ring Star

Project 30 kilometres north o Noronts

copper-nickel discovery and a 50/50 J/V

with Melkior Resources Inc. [MKR-TSXV]

on the West Nickel Project 20 kilometres

north o the Noront discovery.

Melkior also has a 50% interest ina 24,000-hectare claim group east o

McFaulds Lake where airborne geophys-

ics have been completed and are under

interpretation.

Canadian Orebodies Inc. [CO-TSXV]

has assembled a large property portolio

o 12 land packages. The company has a

100% interest in eight properties, a 50%

interest in three more through a J/V with

MacDonald Mines and Temex, and an 80%

interest in the Trump Project through a J/V

with East West Resource. Additional tar-

gets are also being explored in the region.

Diamondex Resources Ltd. [DSP-TSXV]

can earn a 51% interest rom private

Canada Nickel Corp. on a 725-claim group

that extends or over 250 kilometres, with

some parts within 12 kilometres o the

Double Eagle nickel deposit.

East West Resource Corp. has various

interests in 11 properties in the general

McFaulds Lake region: Feeder (KWG),

Fishhook (Noront), GP (Temex), GP2

(Temex), Magtail (100%), Max (Northern

Shield), North Trap (Temex/Gee-Ten),Norton West (Trillium North/Cascadia),

Norton East (Trillium North/Cascadia), Ox

(Gee-Ten), and Trump (Cdn. Orebodies).

Fancamp Exploration Ltd. [FNC-TSXV]

has drilled 10 holes on its McFaulds Lake

property where hole 2 (C-1) returned

3.52% nickel, 0.17% copper, 2.7 grams

palladium/tonne and 233 ppb platinum

over 0.9 metres.

Freewest Resources Canada Inc. [FWR-

TSX] continues to drill-test the Black Label

chromite zone situated stratigraphically

below the larger Black Thor chromite zone

with three rigs on the 100%-owned claims.

Drill spacing has been tightened rom

200 metres down to 100 metres along the

2.6-kilometre strike length, and down to 350

metres in depth. Early drilling at Black Label

intersected three chromite zones assayin

32.4% Cr2O

3over 37.2 metres, 14.5% Cr

2O

over 22.0 metres and 28.3% Cr2O

3over 28

metres in hole BT-08-08. Drilling into th

upper Black Thor chromite zone has returne

34.1% Cr2O

3over 174 metres in hole BT-09

37 that contains three higher-grade interval40.4% Cr

2O

3over 38 metres, 43.1% Cr

2O

over 64 metres, and 41.6% Cr2O

3over 3

metres. Black Thor has a true width o abou

50 metres and remains open along strik

and to depth. While company geologists ar

keeping their eyes open or possible nicke

copper-platinum-palladium mineralization

the current drilling will be used as part o

the basis or a NI 43-101 compliant resourc

estimate. In a related development, Freewe

has completed a private placement wit

Clis Natural Resources [CLF-NYSE, Pari

o Cleveland, Ohio to raise $5,162,500 to b

used or chromite exploration.

On the adjacent property, Freewes

50%, and partners KWG Resources Inc

[KWG-TSV], 25%, and Spider Resource

Inc. [SPQ-TSXV], 25%, are generatin

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comparable widths and grades o chromite

mineralization at the Big Daddy Project.

Clis has invested US $3.5 million in a

KWG private placement. Nineteen drill

holes have traced the chromite zone along

a 400-metre strike length which remains

open in all directions. Hole 22 intersected

34.8 metres o 42.1% Cr2O

3, 16% iron, and

0.4 grams combined platinum/palladium/

tonne. KWG and Spider can increase their

combined interest to 60% by completing a

easibility study within 18 months.

Hawk Uranium Inc. [HUI-TSXV] has

a J/V with MacDonald Mines in the six

Hawk-McNugget claims covering 1,554hectares where nickel targets have been

identied by geophysics.

International Bethlehem Mining

Corp. [IBC-TSXV] can earn to a 75% inter-

est rom East West Resource Corp. in the

Eva Kitto platinum prospect located near

Beardmore, 153 kilometres north-northeast

o Thunder Bay. This summer, new oles

will be drilled and some old ones re-drilled

in the $350,000 program.

James Bay Resources Ltd. [JBR-TSXV]

has a 19,700-hectare prospect about 30kilometres west-southwest o the Eagle One

discovery. Airborne geophysics has identi-

ed over 30 targets. Some drilling has been

completed which returned anomalous cop-

per/zinc values.

MacDonald Mines Exploration Ltd.

[BMK-TSXV], while still holding on to

some 88,000 hectares in the McFaulds

Lake region, the company is basically sit-

ting out this exploration season to ocus on

CHROMIUM

Chromium was discovered in 1797. Stainless

steel that is highly resistant to corrosion is

made by adding chromium and nickel to iron.

Chromium and ferrochromium are produced

from chromite (FeCr2O4), the only commerciallyviable ore. Making stainless steel and plating

are its main uses. Chromium is a lustrous, hard

metal that takes a high polish and melts at

2,671 C. Two thousand year old bronze cross-

bow bolts and swords from China show no sign

of corrosion as they are coated with chromium.

Spider Resources Inc. is the Pioneer Exploration Company in the James Bay

Lowlands o Northern Ontario, exploring area since 1993.

Spiders Exploration team headed up by Neil Novak is responsible or the discovery

o 3 Jurassic aged Kimberlites (MF1, MF2 and Good Friday) within a ew kilometres

o Ontarios frst diamond mine Victor, now in production, as well as fve Proterozoic

hidden Kimberlites (Kyle 1 5) located 100 kilometres to west o Victor.

Regional diamond exploration by same team lead to discovery o McFaulds Lake

VMS deposits (1 and 3) in 2002-03, as well as 8 other VMS occurrences spawning

The McFaulds Ring o Fire. Geophysical surveying and other exploration eorts as

initially conducted by Spider ormed the exploration data-set that lead to the frst

discovery o Chrome in the area in 2006 as well as the Eagle One Magmatic Massive

Sulphide Deposit.

For information, contact Neil Novak P.Geo.

Tel: 416.203.8636 Fax: 416.815.1355

304 65 Front Street, Toronto, Ontario M5E 1B5

[email protected]

www.spiderresources.com

TSX-V: SPQ

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other projects.

Mill City Gold Corp. [MC-TSXV] can

earn a 50% interest in the GP2 property

held in a J/V between East West Resource

and Temex Resources Corp. [TME-TSXV;

TQ1-Frankurt]. The property is located 50

kilometres southwest o the Noront discov-eries. Earlier drilling has returned 0.15%

copper over 80 metres with several higher

grade intervals. Mill City is testing a num-

ber o targets. Temex has various interests

in 375,400 acres o claims.

Noront Resources Inc. [NOT-TSXV]

controls 100% o about 48,600 hectares

and has joint ventures comprising another

68,000 hectares. The company has com-

pleted a NI 43-101 compliant resource

estimate at Eagle One, discovered the

Eagle Two nickel-copper deposit and

made two high-grade chromite discover-

ies the Blackbird One and the Blackbird

Two. Indicated resources (massive + dis-

seminated) at Eagle One currently stand

at 1,834,000 tonnes grading 1.96% nickel,

1.18% copper, 0.15 grams gold/tonne,

1.12 grams platinum/tonne, 3.91 grams

palladium/tonne and 3.81 grams silver/

tonne. Inerred resources (massive + dis-

seminated) are pegged at 1,087,000 tonnes

grading 2.39% nickel, 1.27% copper, 0.13grams gold/tonne, 1.37 grams platinum/

tonne, 4.50 grams palladium/tonne and

4.21 grams silver/tonne. For these esti-

mates, a cut-o grade o US $115/tonne

net smelter return was used.

In late April 2009, Noront announced

the discovery o two mineralized zones

o vanadium, titanium and iron at the

Thunderbird Anomaly. In the A Zone,

drill hole NOT-09-2G21 intersected 0.36%V

2O

5(vanadium), 2.77% TiO

2(titanium)

and 24.72% Fe3O

4(iron) over 178 metres.

The B Zone returned 0.36% V2O

5, 2.66%

TiO2

and 23.58% Fe3O

4over 99.64 metres.

Noront has planned a metallurgical study

to examine the best extraction method or

these metals.

On the chromium ront, Noront reported

intersecting 21.5 metres o massive chro-

mite at the Blackbird area averaging

41.56% Cr2O

3in hole NOT-09-1G130. In

addition, hole 1G104 cut 25.1 metres aver-

aging 36.82% Cr2O

3, including 5.2 metres

o 40.61% Cr2O

3.

At the present time, Noront has ve drills

turning. Two rigs in the Eagle One area are

drilling to expand the known resources,

two other rigs are testing the Blackberry

area and one is drilling in the Oval Lake

area targeting geophysical anomalies. The

company expects to have a NI 43-101

resource estimate or the chromite deposits

in Q3 o this year. Down-hole geophysicswill also be carried out at Eagle One.

Northern Shield Resources Inc. [NRN-

TSXV] has several prospects south and

southeast o the Ring, including th

Highbank Lake, Eastbank, Wabassi Nos

1 & 2, Cain & Abel, Hale Lake and Fring

targets. Till sampling at Eastbank, wher

a drill program is planned, has returne

chromite grains. At Highbank, wher

Impala Platinum Holdings Ltd. can earn 60% interest, a platinum soil anomaly ha

been discovered and drilling is planned.

Probe Mines Ltd. [PRB-TSXV] hold

claims avourably located adjacent t

Nortons Eagle One discovery and other

directly on strike rom the Black Thor, Bi

Daddy and Blackbird chromite discoverie

Probes 100%-owned Tamarack propert

hosts a one-kilometre strike length o

untested ultramac intrusive rocks locate

northeast o the nickel and chrome dis

coveries where a summer drill program i

planned. Geophysical programs were car

ried out in 2007 and 2008.

Probes 100%-owned Victory propert

covers the interpreted southeast extensio

o the McFaulds Lake volcanic belt. Th

company plans to drill-test selected geo

physical targets this summer. Probe als

has a 50/50 joint venture with Noront on

property situated between the Black Tho

and Big Daddy chromite discoveries o th

Freewest and Freewest-Spider-KWG J/VAirborne geophysics has identied anoma

lies. Exploration continues.continued on page 4

EXPLORATION OF PRECIOUS AND BASE METAL PROPERTIES IN CANADA

Investor ContaCt Cli shllw | tl.: 604 922 2030 | www.wfgup.cm | 2489 Bllu au, W vcu, BC

tsX-v: WtC | tsX-v: BPC | tsX-v: IBC

n Lk

sgull

e Ki

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EEveryone needs NPK. Its not a stock trad-

ing symbol, but a ormula or enhanced

ood productivity nitrogen, phosphorus,

potassium the essential triumvirate o

ertilizer. Even during an economic down-

turn, the increasing world population

needs ood. Plants eaten by people and

domestic animals (raised or meat and dairy

products) are dominantly cereals (grains o

the grass amily: mainly rice, wheat, and

corn, as well as oats, rye, barley, sorghum,and wild rice) and legumes (beans, soy-

beans, peas, peanuts, etc.), which, when

consumed in combination provide a bal-

anced protein diet. Other important grasses

to the economic system are sugar cane and

bamboo. Productivity o all crops can be

improved with appropriate applications

o modern ertilizer in addition to main-

taining good soil, using best management

practices, and arming wisdom developed

over millennia o human agriculture.

Where does ertilizer come rom? N,

or nitrogen, makes up 79% o air and is

xed in soil by legumes in conjunction

with soil bacteria, and can be added to soil

rom organic waste. P, or phosphorus, a

main component o phosphate minerals in

bones, can be mined rom phosphate rock

such as the Permian Phosphoria Formation

o western North America. K, or potassium

is derived rom potash.Potash is the name given to various

potassium salts and compounds used in

ertilizer. Originally derived rom wood

ash in a simple lye-making process that let

white powder in a big pot, hence the name

pot ash, now most potash comes rom

mineral sources. Potash is generally mined

as KCl (potassium chloride, or muriate o

potash, aka MOP), the mineral sylvite,

which occurs abundantly and naturally in

extensive strata o evaporated Paleozo

epicontinental seas in the subsurace o

southern Saskatchewan, along with th

more common mineral halite (NaCl, or tab

salt). Potash is oten measured and reporte

in tons o K2O equivalent, or which 1 to

KCl = 0.63 tons o K2O.

Most lode salt mines contain ore o th

evaporite rock sylvinite, an aggregate o

sylvite and halite +/- clay, anhydrite, o

dolomite (water insolubles); high-gradsylvinite contains more than 30% K

2

equivalent. Associated minerals includ

magnesium-bearing carnallite (giving potas

ore its reddish colour). Extensive evapori

strata were deposited in the Paleozoic Era. I

Canada, the Elk Point Basin o Saskatchewa

ormed in the Devonian, and potash mine

in the Maritimes in Carbonierous basin

whereas in Europe the Zechstein basin

hosting salt mines o Germany, Poland, an

POTASHContributing to the Worlds Food Security

by Jennifer S. Getsinger, PhD, P.Geo.

Drilling operations at Western PotashsMilestone property in southeast SaskatchewanPhoto courtesy Western Potash Corp.

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Austria, ormed in the Permian, like the

Kama Basin in the Perm area o Russia. Potash

can also be mined rom modern evaporites

or brines, in similar geological environments

to lithium deposits and brines (inland tec-

tonic basins), such as the Dead Sea, Albertaoilelds, or Andean salars.

In the August 2008 Resource World, an

article on potash reported that demand

had increased so ast that prices soared

rom about $200/tonne in 2007 to about

$1,150/tonne by 2008 (with higher esti-

mates or 2009 and beyond). Exploration

companies started looking toward develop-

ing new potash mines. Demand or potash

is driven not only by population explosion

(the need to eat), and by increasing income

(a desire to eat well), but also by urbaniza-

tion (reduction in arable land) and the use

o oil-alternative biouels. I more crops are

grown or uel and animal eed (to satisy

higher meat consumption), and i there is

less land to grow crops, then higher pro-

ductivity rom less land area is desirable.

Thereore, it was reasoned rom positive

projections that the demand or potash

would continue to rise.

How has the past years economic

weather changed these predictions? Whathasnt changed is that people are still eat-

ing and growing grains and beans, and

the main non-North American markets

or potash are still China, India and Brazil.

However, all over the world people are

spending less money, and that includes

the entire agribusiness sector, rom mega-

corporations to amily armers. What this

means or the ertilizer business is that the

predicted demand or NPK slowed down.

Prices or N and P ell, precipitating unex-

pected losses. However, according to sourcessuch as Citigroup Global Markets Citi

Investment Research rms January 2009

report on Potash Prospects, because the pot-

ash industry is relatively consolidated, the

price remained somewhat high and even

though sales weakened, companies concen-

trating in potash still came out ahead.

The major potash producers reduced

production o inventory to meet the lesser

demand, and attempted to hold rm on

pricing. Citi orecasts a price o $650/tonne

in 2009 and $600/tonne in 2010, with an

average price o about $400/tonne over the

long term. While these are much lower than

the $1,000+ per tonne potash prices o a

year ago, they are still better than pre-2008

prices, and the prognosis is good or conti-

nuity. Perhaps the worlds middle class will

not atten up quickly enough or speculators

to make a ast buck on potash, but the ood

and hence ertilizer industry remains astable bet or the long term.

The potash business is dominated by

eight main producers in only a ew coun-

tries, with yearly production o about 30

million tonnes. Canada remains the num-

ber one world potash provider with its

Canpotex marketing group consisting o

Saskatchewans Potash Corp. [POT-TSX;

POT-NYSE], Mosaic [MOS-NYSE], and

Agrium [AGU-TSX; AGU-NYSE], together

making up 35% o 2008s global potash

capacity (Fertecon, as reported by Citi).Belarusian Potash Co. exports potash rom

Belaruskali and Uralkali [URKA-MM], and

International Potash Company exports

potash rom Russias Silvinit [SILV-RU].

These three companies made up 29%

o global potash capacity in 2008, with

Germanys Kali & Salz (K+S) [SDF-

Frankurt] at 10% and Israels ICL [ICL-Tel

Aviv Stock Exchange] at 8%. The remaining

17% potash capacity comes rom a combina-

tion o smaller producers such as Intrepi

Potash Inc. [IPI-NYSE], the largest produce

in the USA, which produces 8.5% o Unite

States consumption, and 1.5% o worl

consumption, and Arab Potash Compan

(APC) [APOT-Amman Stock Exchang

in Jordan, which is a major supplier to th

Middle East, Asia, and Arica. Major potas

consumers are China, North America, India

Russia, and Brazil.

The largest known potash reserves are iCanada (>50%), Russia/Belarus (~30%

and Germany (9%), with smaller amount

in other countries, including signicant pro

duction rom the Dead Sea area. The Germa

reserves are estimated to last 40 more year

whereas Canadian potash longevity is, so a

inestimable (reserves estimated at 75 billio

tonnes o KCl, according to the Canadia

Encyclopedia online). The Vancouver Sun i

May 2009 quoted Kelvin Dereski, presiden

o the Saskatchewan Mining Association

saying that 2008 mining production iSaskatchewan, largely due to potash, wa

valued at a record $9.7 billion positionin

the province as the No.1 mineral-producin

jurisdiction in Canada.

Until the 20th century, almost all worl

potash was supplied by burning wood t

ash and by European salt mines, but Worl

War I sparked new mineral resource di

coveries in North America, among them th

mines o the Carlsbad area o New Mexico

8/14/2019 RW 7-7 online


USA, active in the 1930s. It wasnt until

deep drilling or oil in 1943 penetrated

evaporite strata in central North America

that the huge potash reserves beneath

southern Saskatchewan were revealed, as

most o the potash-bearing rock is oundat depths between 1,000 and 3,000 metres.

Some potash extraction in Saskatchewan is

by underground mining, and some is by

solution mining, depending on depth o

the potash-bearing strata and also subsur-

ace temperatures.

Although the larger companies seem to

have a production advantage, there is still

room in the uture o potash or new dis-

coveries and mine development, especially

considering actors o convenience, prox-

imity, and changes in demand not only or

ertilizer but also the other uses o potash,

such as glass making, health products, and

chemical applications.

Canadian resource companies with

interests in potash

Agrium Inc. [AGU-TSX; AGU-NYSE],

headquartered in Calgary, is an integrated

agricultural retailer, providing NPK nutri-

ents rom source to consumer. Its fagship

potash acility at Vanscoy, near Saskatoon,produces 1.8 million metric tonnes o

potash annually.

Alix Resources Corp. [AIX-TSXV] and

Geo Minerals Ltd. [GM-TSXV] acquired

areas prospective to potash in Saskatchewan

and Manitoba in July 2008, but appear to

have intersected and explored coal seams

near Wapawekka Lake instead, according to

a news release by Michael England (dated

April 30, 2009). On June 11, 2009, Alix and

Geo announced acquisition o a lode gold

quartz property in the Yukon, but have notreleased any news o their Saskatchewan

potash prospects since July 2008.

Allana Resources Inc. [AAA-TSX] is a

Canadian company with 100 million tonnes

o NI 43-101 compliant inerred potash

resources in its Dallol property in a his-

torical potash mining area o the Danakil

Depression o Ethiopia. (See the write-up

on Allana in June 2009 Resource World.)

Athabasca Potash Inc. [API-TSX] is

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World-class shallow depth potash

Inferred Resource of 105 million tonnes at 21 % KCl

Potentially lowest CAPEX and lowest OPEX potashproject in the world

Amenable to Solution Miningand Solar Evaporation

Located in one of the largest evaporite

basins with known potash mineralization

TSXV: AAA Farhad Abasov, President/CEO: 416 309-2691 www.allanaresources.com

advancing its Burr Project in Saskatchewan

near PotashCorp.s Lanigan Mine with

a pre-easibility study, and recently

announced NI 43-101 measured and indi-

cated resources o 425 million tonnes

potash, and an additional 187 million

tonnes inerred. It holds 23 potash leaseson almost 7,000 square kilometres o

property.

BHP Billiton Ltd. [BHP-NYSE] in a J/V

with Anglo Potash Ltd., in 2006 acquired

about 7,000 square kilometres o potential

potash mining property near Saskatoon,

and intends to open the rst new potash

mine in Canada in 30 years, the Jansen

Lake Project, o which it now owns 100%.

Director Gordon Graham plans to involve

local First Nations and Metis. The mine is

slated to open in January 2015, with ull 8

million-tonne yearly capacity by 2026.

Canasia Industries Corp. [CAJ-TSXV],

in addition to gold properties, has the

Eyehill Creek Potash project in Alberta,

where geophysical studies have suggested

subsurace potash strata not ar west

rom Saskatchewans Unity potash mine.

Exploration work is now underway on

their 20 permit areas.

Channel Resources Ltd. [CHU-TSXV]

has analytical results that suggest pot-

ash might easibly be co-produced withlithium carbonate rom brines at their

Fox Creek project in the Alberta oilelds,

according to Cyrus Ameli. (See June 2009

Lithium article in Resource World.)

Conederation Minerals Ltd. [CFN-

TSXV], headed by Lawrence Dick, PhD,

P.Geo., recently announced a joint venture

with Magna Resources Ltd. (they each

own 50% o American Potash LLC) to

option U.S. potash prospects in Utah and

Arizona. Although the properties are not

named specically in the June 3, 2009,

news release, they are located within the

Paradox Basin and Holbrook Basin, like the

prospects oered by Ringbolt Ventures.

Grizzly Diamonds Ltd. [GZD-TSXV]

announced in June 2008 its subsurace min-

eral permits along the Saskatchewan-Albert

border that include rights to potash mining

It is currently reviewing geophysical dat

and planning potash drilling programs. Las

year, Shear Minerals Ltd. [SRM-TSXV

signed an option with Grizzly, but no pot

ash news has been reported since.Lara Exploration Ltd. [LRA-TSXV] ha

been granted potash exploration license

encompassing about 14,000 hectares i

Sergipe State, northeast Brazil. The claim

are adjacent to and cover the extensions o

the potash-bearing sedimentary basins o

Vales producing Taquari-Vassouras potas

mine.

MagIndustries Corp. [MAA-TSXV

announced agreements or nancing Phas

I exploration on its Kouilou Potash Projec

in the Republic o Congo, a greeneld

development with a design capacity o

600,000 tonnes o potash, hoping to b

the newest potash acility in Arica. Th

main potassium mineral is carnallite (als

containing magnesium), and the expecte

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process is solution mining.

Orocobre Limited [ORE-ASX] has a

resource 4.4 million tonnes o potash at its

Olaroz lithium-potash project in northwest

Argentina based on 5.32 tonnes o lithium

carbonate being equivalent to 1 tonne o

lithium and 1.91 tonnes o potash beingequivalent to one tonne o potassium.

Passport Metals Inc. [PPI-TSXV] is

drilling (diamond drill and reverse cir-

culation) its 100%-optioned Holbrook

Basin, Arizona, potash property, where

the salt layers occur in the Permian Supai

Formation. Downhole geophysics will

also be carried out. Historic drilling has

returned potash values ranging rom

11.05% to 14.59% K2O.

Potash Corporation o Saskatchewan

was ormed in 1975. Now known as

PotashCorp., the largest ertilizer com-

pany in the world, it provides NPK with

a commitment to grow and a strategy o

putting potash rst. An interactive map

on its website shows world agriculture

and ertilizer markets by country. It has

ve potash mines in Saskatchewan, one

in New Brunswick, a nitrogen gas acility

in Trinidad and part ownership o several

international potash producers.

Potash One Inc. [KCL-TSX] recently

updated NI 43-101 estimated resources onits 400 square kilometre Legacy Project near

Regina (adjacent to Mosaics Belle Plaine

solution mine property) to 29 million tonnes

o measured potash resources, 222 million

tonnes o indicated potash resources, and 852

million tonnes o inerred potash resources.

In January 2009, Potash One and the ormer

Potash North Resource Corp. announced

a merger which was approved by the BC

Supreme Court in April 2009. In mid May,

Paul Matysek, President, announced Robert

Friedland will be Chairman. Mr. Friedland

will advise the company on its selection o

strategic nancing partners. Potash One had

SNC-Lavalin complete a preeasibility study

or a 2.5-million tonne/year potash solution

mine. Capital cost is US $1.877 billion or a

initial 40-year mine lie with a 3.3-year ater

tax payback. IRR would be 30.1%.

Raytec Metals Corp. [RAY-TSXV] plan

to sell its Saskatchewan potash interests t

Angus Ventures Corp. [AGN.H-TSXV] an

Encanto Potash Corp., which will merg

under the name Encanto Potash. Raytewill then earn in or a 51% interest an

Encanto may repurchase the 51% interes

Raytec will make $6.5 million available o

exploration. The Spar property is reporte

(NI 43-101 compliant) to have an indicate

resource o 12.24 million tonnes o K2O

and is undergoing geophysics.

Ringbolt Ventures Ltd. [RBV-TSXV]

sustaining agricultural growth by mak

ing its potash prospects in Utah (Lisbo

Valley, Paradox Basin) and Arizon

(Holbrook Basin) a priority, along with on

uranium property in Canada. New direc

tors came on board in November 2008, an

are seeking investors in order to continu

the path toward developing their prospec

tive potash assets in the U.S.

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Sidon International Resources Corp.

[SD-TSXV] in December 2008 received the

10 potash mineral permits over 870 square

kilometres in the Vermilion area o Alberta

or which they applied in July 2008; how-

ever, in 2009 it appears that their main

activity has been undraising.The Mosaic Company produces muri-

ate o potash rom its solution mine at Belle

Plaine and two other mines in Saskatchewan,

the Colonsay and the Esterhazy (one o the

largest potash mines in the world), and

exports potash through Canpotex, also pro-

viding phosphate, to help the world grow

the ood it needs. Mosaic recently won a

National Environmental Education award

or its work educating school children in

Florida, where it mines phosphate rock.

TNR Gold Corp. [TNR-TSXV], eatured

in the June 2009 Resource World lithium

article, has acquired 100% interest in

Argentinas Mariana brine property, located

in an Andean salar or salt lake. President

Gary Schellenberg and John Harrop,

P.Geo., report that historical sampling has

reported signicant lithium, boron, and pot-

ash levels in brines and sediments in the

salar. Processing surace salts is much less

costly than underground mining or these

elements.

Trigon Uranium Corp. [TEL-TSXV],part owner o Intercontinental Potash (ICP),

is exploring and studying easibility o poly-

halite mining in New Mexico in addition to

ICPs other potash properties in Colorado

and Utah. Polyhalite, a hydrated sulate o

potassium, calcium, and magnesium, would

provide an organic, non-chloride, slow-

release, and multi-nutrient ertilizer.

Vale S.A. [VALE-NYSE], ormerly Inco,

one o the largest mining companies in the

world, bought Rio Tintos Canadian potash

holdings near Regina early in 2009.

Vulcan Minerals Inc. [VUL-TSX], while

exploring or oil near Newoundland, dis-

covered its Flat Bay Potash/Salt project in

the Carbonierous Maritimes Basin (Bay St.

George Basin) at the southwestern corner

o Newoundland. It expects to produc

de-icing salt there, ater assessing the po

ash (so ar analyzed up to 20.4% K2O) an

halite resources. Altius Minerals Corp

[ALS-TSX], with investment partner Spro

Resource Corp. [SCP-TSX], has begun po

ash exploration in the Bay St. George BasinCornerstone Capital Resources Inc. [CGP

TSXV] advertises its Codroy property, at th

southwestern corner o Newoundland, as

potash prospect, but it is also exploring o

uranium and copper in the area.

Western Potash Corp. [WPX-TSXV

AHE-FSE] reports positive drill result

rom its 500 square kilometre Mileston

property southeast o Regina on the sam

trend with Mosaics Belle Plaine producin

solution mine and adjacent to propertie

held by Potash One, BHP, and Vale (Ri

Tinto). John Costigan, VP o Corporat

Development, says that Western Potash

drilling in new areas, targeting signican

heat anomalies where the cost o solutiocontinued on page 4

1.07 BILLION LBS* OF INDICATED RESOURCES9.66 BILLION LBS* OF INFERRED RESOURCES

ROCHER DEBOULE MINERALS CORP.

www.rdminerals.ca [email protected]

TSX-V: RD Ph. #: 604-531-9639Open-pit Manganese face

Resource

Classificaton

Tonnes

(Billions) %Mn Pounds

Indicated 10,865,929 4.46% 1,068,307,976

Inferred 96,933,724 4.52% 9,661,091,721

* Summary of National Instrument 43-101

THE LARGEST LOW-GRADE RESOURCE OF MANGANESE IN THE U.S.

Manganese $1.10/l

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Under the direction o David Moore, President and CEO,

Serengeti Resources Inc. [SIR-TSXV] acquired 100% own-

ership o the Kwanika Project through staking between

2004 and 2006. The Kwanika Project is located in north-central

British Columbia about 140 kilometres northwest o Fort St. James

and lies in close proximity to the well serviced mining communities

o Prince George and Smithers. It is situated in a large porphyry cop-

per-gold belt geologically reerred to as the Quesnel Trough between

Northgates Kemess Mine, which produces 300,000 ounces o gold

annually, and the Mt. Milligan deposit, reported to contain 5.6 mil-

lion ounces o gold and 1.7 billion pounds o copper, currently being

developed by Terrane Metals and Goldcorp.

The Kwanika Project consists o two mineralized areas known

as the Central Zone and the South Zone. Prior exploration on

the property occurred between 1966 and 1995 during which

time a historic resource (non NI 43-101 compliant) o 36 mil-

lion tonnes grading 0.20% copper was estimated on the South

Zone. Exploration conducted by Serengeti during 2005 and 2006

included airborne and ground geophysics as well as drill programs

that resulted in the discovery hole K-06-9 that intersected 111.1

metres grading 0.69% copper and 0.54 grams gold/tonne in the

Central Zone in December 2006. Since that discovery, Serengeti

has expanded the central area o high-grade, copper-gold miner-alization using drill hole spacings designed to support a resource

calculation. The company completed 56,000 metres o drilling in

123 holes by August 2008. Some o the drilling highlights include

Hole K-07-15 that cut 328.3 metres grading 0.61% copper and

0.72 grams gold/tonne and Hole K07-29 that intersected 48.6

metres o 0.75% copper and 2.5 grams gold/tonne. Hole K-07-28

encountered a 322-metre interval o porphyry-style copper-gold

mineralization that graded 0.40% copper and 0.40 grams gold/

tonne. A 240-metre interval in Hole K-08-62 produced 1.28%

copper and 1.41 grams gold/tonne.

A NI 43-101 compliant resource estimate conducted on the

Central copper-gold zone at the Kwanika Project was released inlate February 2009. The estimate is based on 78 drill holes total-

ing 40,784 metres that were drilled between 2006 and 2008. The

resource estimate was based on a 0.25% copper equivalent cut-

o grade and outlined 182.6 million tonnes o indicated mineral

resources grading a 0.47% copper equivalent or a 0.71 grams

gold/tonne equivalent containing 1.62 million ounces o gold and

1.15 billion pounds o copper. Inerred mineral resources o 28.5

million tonnes grade 0.32% copper equivalent or 0.49 grams gold/

tonne equivalent and contain an additional 0.2 million ounces

o gold and 120 million pounds o copper. A higher grade zone

based on a 0.40% copper equivalent contains 75.1 million tonne

o indicated mineral resources grading 0.42 grams gold/tonne an

0.41% copper. An environmental scoping study and preliminar

metallurgical studies have been completed.

Serengeti has approved a $3.1 million program or 2009. Th

company will be drilling high priority targets to expand th

known mineralized zones and to search or new zones around thCentral and South Zones o the Kwanika Project. Follow-up dri

programs will also take place on other highly prospective prop

erties in the Quesnel Trough. Joint venture partner Newcre

Mining Limited o Australia is ully permitted to conduct

$1.5 million ollow-up drill program to test copper-gold targe

on the Croy Bloom-Davie Creek property this year. The Mil prop

erty, a 50/50 joint venture with Fjordland Exploration In

[FEX-TSXV], will be drilled as well as the 100%-owned Choo an

Osilinka properties, also located in the Quesnel Trough.

Serengeti is well unded to advance its projects with a workin

capital o approximately $8.6 million in the treasury. n

(CIPF) Dorothy Hoert has been an Investment Advisor

20 years with a ocus on the Mining Sector. The inormatio

contained in this article was obtained rom sources believe

to be reliable; however, we do not represent that it is accurate or com

plete. This report is provided as a general source o inormation an

should not be considered personal investment advice or solicitation

buy or sell securities. The views expressed are those o the author an

not necessarily those o Wolverton Securities. Wolverton Securities ha

not perormed any investment banking or this company in the last 1

months. Ms. Hoert can be reached at 604-662-5271.

Serengeti Resources developing Kwanika tonnage

Kwanika Resource Block Model Feb 2009 >0.25% Cu Eq Cut-olooking East

broker's picksDorothy Hoffert

8/14/2019 RW 7-7 online


insights & investmentsEric Hoesgen & Dennis Hoesgen

What is the rst thing that comes

to mind when you think o

Albania? Tough to say isnt it?

This is because very little has been known

o this country in the last 100 years, up

until very recently. Today, the country is

starting to attract a signicant amount o

oreign investment; it also led Europe in

GDP growth in 2008.

I (Eric) traveled to Albania in May o 2008

and was truly amazed at the development

and beauty o this country. Oddly enough,

my cell phone had better coverage in north-

ern Albania than in some parts o British

Columbia, which was impressive. Now, you

might be wondering what I was doing in the

mountains o Albania. Please read on.

The country boasts 450 kilometres o

gorgeous coastline and a cuisine comprised

o Greek, Italian and Turkish infuences

nations that had each occupied Albania

at dierent times throughout history, leav-ing their mark on Albanian culture. The

pizzerias almost make you eel like you

are in Italy.

The culture o Albania has evolved over

hundreds o years. While the country is cur-

rently still recovering rom the politics o the

Communist Party o Albania that ended in

the early 1990s, it is making great strides to

eventually join the European Union.

Albania is actually more stable than

one would think, having a parliamentary

democracy. Tirana, the nancial capitalo the country, is home to approximately

895,000 o the countrys 3.6 million people.

Free-market reorms have opened the coun-

try to oreign investment, especially in the

development o energy and transportation

inrastructure. Also, as o January 1, 2008,

Albania implemented the 10% fat per-

sonal and corporate tax system, one o the

lowest in Europe. The country is staunchly

pro-West and is a new NATO member.

This brings me to the key reason I went

to Albania; I was interested in seeing what

the climate was like or investing there. A

sector that is getting a great deal o atten-

tion in the country is exploration and

mining, largely due to the success o only

one or two companies. A new mining law

was passed in 1994 as well, specically

geared towards attracting new oreign-

investment. The stability o the Mining

Law, the excellent tax environment and

the avourable geology has the resource

world getting increasingly excited.

Historically, Albania started as a cop-

per producer in the late 1920s and 1930s,

but stopped when World War II broke out.

Things didnt get going again until the 1950s

and 1960s, when the Soviets, occupying

the country at the time, carried out exten-

sive exploration programs. Those programs

uncovered many o the known deposits

throughout what is known as the Mirditadistrict. A junior company by the name o

Tirex Resources Ltd. [TXX-TSXV] acquired

this crown jewel o Albania approximately

two years ago. The Mirdita District is 344

square kilometres, covering most o the tra-

ditional Albanian Mining District.

Following this, Tirex began conducting

the rst ever modern exploration program

in the country, a move that has given

the company rst-mover status in this

geologically-rich country. In 2007, Tirex

conducted the rst airborne geophysicalsurvey in Albania which uncovered 102

geophysical targets, most o which are pre-

viously undrilled and unknown. The Tirex

exploration and development team believe

that Mirdita has the potential to become

one o the worlds great volcanic massive

sulphide (VMS) districts hosting many

large economic deposits. Since ormation,

the company has raised $25 million in

capital and has drilled more than 15,000

metres, resulting in some excellent grade

o copper, zinc, gold and silver mineraliz

tion over wide widths in three separat

areas o the district.

Its not very oten that an opportunity t

acquire an entire district comes along an

Tirex is working to turn this good ortun

into a signicant win or both shareholde

and or the people o Albania who want

large and prosperous mining industry t

uel economic growth and advancement.

In addition to generating attention i

the eld with some rather spectacula

drill intersections, Tirex has also estab

lished a reputation or completing ver

unique nancings. In act, in 2008 Tire

brought the $20 billion European Bank o

Reconstruction and Development (EBRD

on board in what was their rst eve

nancing o a mineral exploration com

pany anywhere in the world.

One comment we get requently is thact there are ew investment opportun

ties with exposure to Albanian exploratio

companies. And with Tirex well into the

program, what are the options i you wan

to invest into something at the groun

foor? There is only one that we know o

and its a company by the name oVolcan

Metals Corp. [VOL.P-TSXV]. This is a sma

junior on the TSX Venture Exchange wit

big plans. It seems they have acquired wha

they consider yet another VMS District i

Albania, the Gjegjan Property.Volcanic Metals is led by an interestin

group o people who all have very successu

track records o creating shareholder valu

but who have been drawn together or th

rst time due to the signicant potenti

at Gjegjan. The board consists o Micha

Iverson, CEO who was a ounder o Fortun

Silver Mines, Rock LeFrancois who is th

President o Niogold, Jason Schare wh

is a Managing Director o March Canad

Why Albania?A ew Europea miera rotier i opeig up or exporer

8/14/2019 RW 7-7 online


Bryan Slusarchuk who is the CEO o Tirex

Resources, and Gary Freeman who is

President/CEO o Pediment Gold.

The Gjegjan property is located in north-east Albania and consists o two separate,

but near contiguous, property blocks cov-

ering a total area o 173 square kilometres.

The permit orms a three-kilometre wide

strip that stretches or 75 kilometres

through the Surroj, Arre Molla, Pregje

Lure and Mbasdeja areas.

The property straddles a 75-kilometre

long segment o the Volcano-Sedimentary

sequence exposed on the eastern margin o

the Mirdita ophiolite belt. The sequence is

recognized to be very prospective in host-

ing copper-rich VMS deposits and past

exploration by the Albanians uncovered

a deposit that turned into a major pro-

ducing copper mine or the government.

Exploration eorts to uncover additional

deposits were hampered by a lack o mod-

ern exploration techniques, equipment

and the severe isolationist policies o the

government. Volcanic will conduct the rst

ever large scale and modern exploration

program in this prospective setting.Logistically, the property can be accessed

easily due to the recently completed 700

million highway rom Kukes to Durress

(essentially, rom the property boundary

to the port city), with its grand opening

this month. It makes the driving time rom

the property to the capital only two hours

on a our-lane highway. This is an incred-

ible improvement as it was triple the time

in the past.

The northeast part o the property, located

east o the town o Kukes, encompassesthe ormer Gjegjan copper mine, which is

excluded rom the permit. Gjegjan is recog-

nized as one o the richest historical copper

producing assets in Albania that is hosted

within the Volcano-Sedimentary sequence.

Geological mapping o the Kukes area

was conducted by the Albanian Geological

Survey (AGS) in the mid to late 1950s, with

varying results. The Gjegjan copper-rich

massive sulphide horizon was intersected

in 1959 in a water well hole.

At least ve sulphide occur-

rences were documented along

two distinct areas within theVolcano-Sedimentary sequence.

Values o up to 7-8% cop-

per were obtained rom the

horizon.

Mining operations rom underground

and open pit extended rom 1961 to 1993,

when the countrys industry collapsed due

to political reasons. During this period,

the Gjegjan Mine produced a total o 4.4

million tonnes averaging 3.30% copper.

Remaining reserves were estimated at

61,000 tonnes grading 2.56% copper.

The Gjegjan sector remains a principle

exploration target as VMS deposits are

known to occur in clusters and no other

deposits were ound during past state-run

exploration. Much like Tirex, Volcanic will

be conducting the rst ever large scale and

modern exploration in the area surround-

ing the Gjegjan Deposit.

Volcanic Metals is currently halted

pending a qualiying transaction. Initial

geophysical work has been completedaround the historical deposit area. O sig-

nicant interest is the exploration potential

underneath a limestone cap in the vicinity

o the known historical deposit.

One thing that we have learned via

Tirex is the signicant diculties the

past Albanian state-run programs had in

terms o technical drilling issues, such as

penetrating to deeper depths. They regu-

larly drilled only 2 metres per day in areas

where Tirex now gets 50 metres per day.

The equipment they were using was quiteantiquated. Thereore, the areas Volcanic is

targeting to develop multiple new drill tar-

gets are relatively unexplored by previous

Albanian explorers.

We consider this to be a very attractive,

early stage opportunity or speculative

investors. The stock will hopeully come

back to trade early July pending exchange

approval. Following on Tirexs success,

which we think will be substantial this year,

Volcanic could oer substantial upside o

speculative investors in our opinion. n

This article is solely the work o the author

Although the authors are registered investmen

advisors at Canaccord Capital, this is not a

ofcial publication o Canaccord and the autho

are not Canaccord analysts. The views, (includ

ing any recommendations) expressed in th

article are those o the authors alone and are no

necessarily those o Canaccord. Inormation

this article is drawn rom sources believed to b

reliable, but the accuracy and completeness o

the inormation is not guaranteed, nor in provid

ing it, do the authors or Canaccord assume anliability. The holdings o the authors, Canaccor

its afliated companies and holdings

their respective directors, ofcers and employe

and companies with which they are associated, ma

rom time to time, include the securities mentione

in this article. For more inormation regarding th

article, contact Dennis Hoesgen (Dennis_Hoesgen

canaccord.com) or Eric Hoesgen (Eric_Hoesgen

Canaccord.com) at Canaccord Capital (Memb

CIPF) 604-643-7705.

Brian Slusarchuk, CEO o Tirex Resources, examines diamond drill core rom the 344square kilometre Mirdita property in Albania. Photo courtesy Tirex Resources Ltd.

This unusual-looking instrument is used orhelicopter-borne electromagnetic surveys.

Tirex Resources was the rst company to utilizeairborne geophysics in Albania; Volcanic Metalswill be the second one. Photo courtesy TirexResources Ltd.

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M

ovements in interest rates, particu-

larly long-term rates, can be saidto be the net distillation o a num-

ber o important actors being continually

evaluated by the entire nancial community.

And, in my opinion, movements in long-

term rates can have a proound eect on

precious metals investments.

One o the most important components

o long-term interest rates is the expecta-

tion o uture moves in the underlying

rate structure. As the late Proessor o

Economics, Murray Rothbard, discussed

in his text, Man, Economy and State,

...What happens i the interest rate is

expected to change in the near uture? In

that case, there will be a similar process as

in the case o speculation in commodities.

Speculators will bid up the interest rate

in the expectation o an imminent rise

or bid down the rate in the expectation

o a all. (my emphasis)

Regarding the U.S. Treasury 30-year

bonds, we have seen both directions during

the past two years. It can readily be seenon the accompanying chart that rates held

between 4% and 5% or most o 2007 and

2008, then they ell sharply in late 2008 to

barely 2.5% as the U.S. government ratch-

eted up its moves to drive interest rates

lower and also announced that the Federal

Reserve Board would begin purchasing

U.S. government debt with money created

by what they called quantitative easing,

which many interpret to mean monetiza-

tion o debt.

However, despite the positive talk

rom government and the act that short-term rates had been driven down toward

actual zero, a remarkable transormation

took place. The long end o the interest

rate market abruptly turned higher early

in 2009 and has now recovered the entire

decline o the past two years as rates rose

sharply rom 2.5% to over 5% in just a

ew months.

Our goal then is to identiy why this

change o direction took place and whether

it is not only likely to continue into the

uture, but may even accelerate.

We believe that anticipated rates o

uture infation are the most important

single component o movements in interest

rates since, as a minimum, investors would

hope to at least recover the purchasing

power o their unds when they close out

their investments. Thereore, as the antici-

pated rate o infation would rise, so would

the amount o interest demanded by inves-

tors beore committing unds. Next, in the

modern-day context, one o the drivingorces behind anticipated rises o infa-

tion is the degree o nancial stimulation

undertaken by government in general and

the United States in particular, as well as

the eects o the nancial imbalances cre-

ated by the recent avalanche o stimulus

and rescue programs undertaken by that

government.

The gures are startling indeed. During

the past year, the estimated budget decit has

swollen rom less than one-hal trillion U.S.

dollars to $2 trillion. Americasnational debt has grown rom

US $9.4 to US $11.4 trillion.

The Federal Reserves Monetary

Base has doubled and the level

o Federal Reserve assets has

shot up by an unprecedented

130%.

Many economists believe

that the incredible rise in the

level o these gures augurs

or uture infation unless the Obama-le

government gains control over the sitution, reins in the growth o governmen

expenditures, and begins the reverse tr

rom soaring to alling budgetary decit

But will it? I have my doubts.

During recent months, we have hear

o commitments to create millions o ne

jobs; to introduce government-sponsor

national medical insurance programs; t

re-regulate the entire nancial structur

to rescue important players in the aut

banking, mortgage insurance and gener

insurance industries; as well as spen

trillions on inrastructure projects whi

somehow saving millions o homeowne

rom oreclosure proceedings and that

just a partial list. In addition, many stat

and municipalities are acing hundreds

billions in operating decits and the ed

eral government will be called upon

help in that direction as well

In short, I believe that conditions are i

place which will likely contribute to risin

infation-based interest rates, not allinto increasing money creation, not dimin

ishing; and increasing weakness in th

U.S. dollar, not strengthening. Historically

rising infation, escalating money creatio

and a weakening U.S. dollar have provide

exceptionally bullish backgrounds or th

precious metals markets.Thereore we loo

or growing upward pressures, not on

sustainable at present, but acceleratin

into the uture, or the price structures

the monetary precious metals. That is th

speculation.n

This material is taken rom sources believe

to be reliable and is provided or inormatio

only. Any investment decision should be mad

only ater prior consultation with investme

proessionals. Leonard Melman is a fnanc

and political writer who ocuses on issues rela

ing to the resource sector. Mr. Melman lives

Nanoose Bay, British Columbia, Canada an

can be reached at [email protected]

speculationsLeonard Melman

Interest rates and precious metals

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Sell in May No Way!

Ill bet that you smiled when you opened

your investment statement or May. This

is o course a complete reversal or manyo my clients who actually spared them-

selves the pain and didnt even open their

statements last all. And its all because

this resource market seems to continue to

attract new investors who have pushed the

TSX Venture Exchange up by another 115

points to 1,124 in May or an impressive

gain on the month o 11.4%!

Theres an old market adage that says we

should sell in May and go away, which

reers to the markets tendency to peak in

the spring. The rule o thumb is to get into

cash by early May and then wait out the

summer doldrums beore re-entering in the

all as the market rebuilds or the coming

year. In the more ocused case o resource

stocks, it has proven very prudent over the

last number o years to sell your positions

just as the annual Prospectors & Developers

Association Conerence takes place in early

March, as it seemed that the enthusiasm or

investing in resource issues peaked at thattime. However, had we sold at the PDAC

this year, when the Venture Exchange was

at about 830, we would have made a nice

19.1% rom the markets low o 697 in

December, but we would have let a very

painul 35.4% on the table, with perhaps,

more to come.

What Im trying to show here is that with

investing, especially resource stock invest-

ing, we cant be complacent and just rely on

what worked in the past, as every cycle o

every market can be dierent, sometimes or

the worse, but so ar this year, very much

or the better. As I write this column in mid

June, the Venture Exchange is still up rom

its close at the end o May, but it is looking

a bit suspect or a correction. So Im taking

partial prots on my leading positions t

build up cash, while keeping a core pos

tion, as I dont want to be completely ou

o this market as it may still have some leg

Im looking to redeploy some o those prointo sectors that have lagged behind, suc

as uranium and natural gas that have so a

this year ailed to ollow crude oil higher. I

short, Im locking in prots and rotating m

portolio to protect my downside, but Im

staying with a youthul bull resource mark

that has outperormed even the most opt

mistic o talking heads expectations.

Lock in prots and create capital ye

Rotate your account yes. But sell th

May and go away no way! n

Rod Blake is an investment adviser at Canac

cord Capital Corp. He can be reached at

604-643-7567 or [email protected].

Member CIPF

at the marketRod Blake

LAURENTIAN GOLDfIELDS/KINROSS fORM

UCHI ExPLORATION ALLIANCE

Andrew Brown, President/CEO, reportsLaurentian Goldfelds Ltd. [LGF-TSXV]

and Kinross Gold Corp. [K-TSX; KGC-

NYSE] have signed a letter o intent to orm

an alliance to carry out a $500,000 generative

exploration program in the Uchi geological

subprovince o Ontario and Manitoba (the

Uchi alliance). The project will target the

prospective Red Lake, Rice Lake and Pickle

Lake greenstone belts. Under the terms,

Kinross and Laurentian will invest $400,000

and $100,000, respectively, to nance one

year o early-stage exploration to identiynew gold targets, which can be extended

upon mutual agreement.

Kinross can create a joint venture with

Laurentian on a 50/50 basis in any o the

projects identied and acquired. Kinross

can increase its interest to 75% on each J/V

property by nancing $1.5 million o uture

expenditures over two years rom the date

the J/V is ormed. The alliance is subject to

signing a denitive agreement.

Laurentian has also ormed a three-year

exploration alliance with AngloGold

Ashanti Ltd. [AU-NYSE; AGG-ASX; ANG-

Joburg], which includes a subscription byAngloGold to a $400,000 private placement

in Laurentian.

Chris Lodder, Greenelds Exploration

Manager: Americas, o AngloGold states,

AngloGold has chosen to work with

Laurentian in several new rontier areas

o Canada because o the teams ability to

design, implement and conduct explora-

tion in an innovative and ecient manner,

which generates new Greenelds drill proj-

ects rapidly.

In year one, AngloGold will provide$700,000 or exploration, including at least

$500,000 or generative exploration eorts

in ve selected areas in Quebec, Ontario

and Saskatchewan, to identiy new grass-

roots gold exploration projects, and up to

$200,000 or upgrading targets within por-

tions o Laurentians 100% owned Grenville

Project, about 200 kilometres east o Val dOr,

Qubec. The Grenville Project is an early-

stage exploration property modeled ater

AngloGolds Tropicana deposit, Wester

Australia.

In year two and three, at AngloGold

option, AngloGold may und an addition$4,700,000 to ollow up on year one result

Upon spending $5,400,000 over three year

AngloGold will earn a 60% interest in eac

project under the alliance with Laurentia

retaining a 40% interest. AngloGold ma

then increase its interest to 75% in any pro

ect by unding any exploration through t

completing a NI 43-101 compliant, inerre

gold resource, within three years o the earn

in period. Any assets acquired during th

earn-in period that do not progress to a join

venture will revert 100% to Laurentian.Laurentian has urther increased it

land position in Van Horne Township

near Dryden, Ontario, with an option on

single patented claim within the boundar

ies o its existing Van Horne property. La

year, Laurentian geologists collected gra

samples along a our-kilometre trend, eigh

o which assayed better than 15 gram

gold/tonne, including one as high as 124.

grams/tonne. More work is planned. n

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fearless talkH.R. Tschudi

Some see green shoots. Others see theshoots already brown. The dier-

ences amongst economists are wider

than ever. In light o a short shel lie, poli-

ticians are portraying optimism as a way o

proessional principle or not knowing any

better. In or the long haul, as entrepreneurs,

we are hopeless optimists. However, i com-

panies keep piling up decits, increasing

debt loads are the consequences. Wishul

thinking will then lead to unavoidable

deaults. While well managed companies

such as Alcoa engage in drastic reductions

in capacities and have cut their work orce

substantially, others hope that the experi-

ence o short recessions hold true this time

around as well.

Politicians are already declaring victory

only that things are much dierent now.

Governments across the world seem to be

engaging in said optimism and placing their

bets on a recovery just around the corner.

Meanwhile they are piling up unprecedented

peace-time debt. At ultra-low interest rates,that debt comes cheap and it is said inter-

est rates provide the silver lining. It made

adjustable rate mortgages (ARMs) much

more aordable to the extent that the dis-

posable income in the U.S. has increased by

8% easy to achieve ater the disposable

income was near zero or years.

It is interesting what Americans are doing

with their new-ound relie. While they used

credit cards during previous recessions, this

time around they seem to be more sensible

by reducing debt and increasing savings.Do they know something that govern-

ments dont know? My take is that, rather

than looking at disposable income, they are

looking at their defating pay cheques a

sure-re indicator o nancial worries.

Consequently, entire industry sectors

remain subdued, automotive manuacturers

and their supply chains, transportation on

ground, water or air, apparel, consumer elec-

tronics, construction, nance, recreation,

travel, publishing, primary, even entertain-ment and education. It logically ollows that

prices are under pressure and, sure enough,

the latest statistics show producer prices

dropping, however slightly.

However, there is a silver lining in

base metal prices. Aluminum, copper and

nickel are way o their lows rom only

a month ago. Also, energy prices have

soared recently in anticipation o an eco-

nomic recovery. These actors indicate that

there is some sort o a foor that has been

reached, i only temporarily. What oth-

ers celebrate as a new excellence, I would

term as merely less awul.

It seems that agriculture and health care

are part o the ew stable sectors, relatively

speaking, and it might be a good idea to

revisit investments into agriculture and

its related industries such as potash, or

example.

The bigger picture does not look all that

encouraging, though. Many industries hang

on to the governments umbilical cord, eitherdirectly or indirectly. And governments

throughout the world are reaching their

breaking point o just not being able to do

more to stimulate the economy. I a recovery

does not kick in during the ourth quarter

o 2009, Europes automated stimuli in the

orm o unemployment insurance and subsi-

dized shorter working hours will start to run

dry. In my opinion, Americas ill-designed

stimulus plans will be ineective beore any

sizable recovery can take hold. The U.S. bet-

ter not depend on exports to Europe, which,because o its own dependency on exports,

European export gures are alling aster

than in the U.S. Thus, i the timing is o,

we are to brace or another oncoming storm.

We should be careul beore laughing at the

crumbling authority in Iran over its election

and economic woes and be more cautious in

arrogantly declaring victory or democracy.

Social unrest is oblivious to organiza-

tional orms o societies, but more receptive

to high unemployment. The darkest cloudare coming rom raising interest rates tha

were a comort centre or the two r

quarters o 2009. It will not only undo th

gains in disposable income that resulte

rom ARMs, but it will add more nancia

concerns to all those that renanced prop

erties using ARMs.

Apart rom the interest rate threat, ther

are two main psychological actors in pla

that have changed the name o the gam

back to where it was three decades ago. Fir

and oremost, responsible citizens seem t

have learned that living above their mean

is probably not worth their amilies allin

apart over nancial stresses, particularl

when acing lower income. Secondly, bank

nally seem to have gotten the message tha

handing out credit to those that cant pay

back isnt such a great idea ater the Pon

Scheme o repackaging shady debt has com

to light. They will need some time to com

up with the next scam.

While governments engage in praisinthemselves or having stemmed o the grav

est nancial crisis in this generation wit

trillions o dollars in near-zero percent loan

and bailouts, they might be well advised t

put all the options on the table or an eco

nomic restructuring. It should soon dawn o

everybody that the level o economic activ

ity o the past decade was a mere illusio

based on bad credit. The world has to thin

about returning to living within its mean

In terms o GDP, it is not all that awul it

just less excellent. n

H.R. Tschudi is an economist and entrepre

neur in Vancouver, BC. You can fnd mor

political and economic columns by H.

Tschudi in www.earless-society.com an

leave comments. This material is taken rom

sources believed to be reliable and is pro

vided or inormation only. Any investmen

decision should be made only ater prior con

sultation with investment proessionals.

New excellence: Less awful

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BuildingSolomonsGold Mineby Thomas Schuster

Australian Solomons Gold Ltd. [SGA-

TSX] is close to bringing the Gold Ridge

Mine back into production on the island

o Guadalcanal. Guadalcanal is part o the

Solomon Islands chain in the South Pacic.

The islands were named by a Spanish

explorer who, on nding alluvial gold on

Guadalcanal in 1568, believed he had ound

the source o the biblical King Solomonsgold. In truth, the gold he had discovered

near the mouth o the Matepono River

originated upstream, on what is now the

Gold Ridge Mine site.

The Solomon Islands orm part o the cir-

cumpacic Ring o Fire and are within an

active subduction zone. There are numer-

ous other gold deposits in the region that

are related to the same system o subduction

zones, including the Lihir Mine on Lihir

Island (22 million oz.), the Porgera Mine on

PNG (+7.8 million oz.), the Emperor Mine on

Fiji (+12 million oz.) and the Panguna gold-

copper mine on Bougainville Island (25.6

million oz. gold/6.5 million tonnes copper).

Australian Solomons Gold was incor-

porated in 2004 with the primary goal o

acquiring 100% interest in the Gold Ridge

Gold Mine. The mine was originally built

by Ross Mining in 1998, but only operated

or 22 months beore it was abandoned dueto ethnic tensions on Guadalcanal. Only

210,000 ounces o gold were produced dur-

ing this time. Extensive inrastructure still

exists on-site including diesel generators,

a tailings storage acility and a processing

plant plus related haul roads and ancillary

buildings.

The project currently boasts a NI 43-101

probable reserve containing 1.15 million

ounces gold hosted within 19.5 million

tonnes averaging 1.8 grams gold/tonne.

Measured and indicated resources tally to1.54 million contained ounces averaging

1.7 grams/tonne and an additional inerred

resource adds 455,000 ounces at 1.8 grams/

tonne.

Pending successul nancing, commercial

production is scheduled to resume Q4 2010 at

a rate o 136,000 oz/year (124,000 oz/year lie-

o-mine average). Estimated cash costs are US

$419/oz. the rst three years and US $468/oz.

over the seven-year mine lie. The mine plan

envisions 6,850 tonnes/day rom our depo

its: Valehaichichi, Kupers, Namachamat

and Dawsons. These deposits lie withi

a diamond-shaped, hydrothermally-altere

zone measuring 2.5 x l.4 kilometres an

trending north-northeast. Geologically, the

are low-sulphidation, intrusion-related ep

thermal gold deposits and display man

similarities with other Pacic Rim deposits

The easibility study, completed Apr

2007, estimates metallurgical recoveries 82% with a lie-o-mine strip ratio o 1.5

to 1. The Ater Tax Internal Rate o Retur

o the project is estimated to be 27.5%

based on a US $850/oz. gold price.

Australian Solomons anticipates the ull

permitted mine can be restarted at a pr

production capital cost o US $101 million

The company expects to raise hal o th

through debt nancing. Towards that en

arrangements are progressing with sever

multi-lateral agencies. In April this ye

a member o the World Bank Group, thInternational Finance Corp. (IFC), signed

ormal Mandate Letter to invest up to US $3

million in the project; US $25 million will b

in the orm o a project debt acility and th

remaining US $5 million will be equity.

Australian Solomons believes the mine h

much more to oer in terms o addition

gold resources and has proven this throug

its Charivunga Gorge discovery.

The Charivunga Gorge prospect is

MINING

Aerial view o Gold Ridge processing plantacilities, December 2006. Photo courtesyAustralian Solomons Gold Ltd.

8/14/2019 RW 7-7 online


located between the Namachamat

and Kupers deposits and mineralizatio

has been traced or strike length o abou

350 metres. It remains open to the nort

and southwest as well as up and down dip

Australian Solomons Gold believes it maeven extend beneath the Valehaichichi p

situated to the north. Gold mineralization i

the central portion o the Charivunga Zon

has been ound to extend rom surace t

360 metres vertical depth.

Highlights o the most recent Charivung

drill results are as ollows:

Hole 167 cut multiple intersections o

mineralization between 271 and 386 metre

down-hole including; 11 metres averagin

2.74 grams gold/tonne, 25 metres o 2.46 g/

26 metres averaging 2.16 g/t, 10 metres o

1.63 g/t and 16 metres averaging 6.85 g/t.

Hole 168 intersected gold mineralizatio

closer to the surace, starting at 52 metre

and ending at 212 metres down-h

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