 Snakes in the mining business
Bob Moriarty
Archives
Apr 15, 2008
You have to watch out for the
snakes. Sometimes it seems like the streets of Vancouver are
filled with them. Oops, I meant the deserts of Arizona. How could
I have made that mistake?
Actually I had a wonderful
trip recently to the Arizona desert to see more manganese
than I ever imagined. And a Mojave
Green rattlesnake; one of the most deadly in North America.
My very good, seasoned advice to you is to stay away from the
snakes in the mining business.
Larry Reaugh founder of Adanac
(AUA) has an almost uncanny ability to see the future for metals.
He picked up the Ruby Creek moly property for pennies.
He paid 1 million shares and $96,000 for 90 claims, including
a 2% NSR from the prospectors. Of course moly was in the dumps
and no one except him saw any future for molybdenum. He's done
exactly the same thing for Rocher Deboule except this
time it's the largest known manganese deposit in North America.
Rocher Deboule
It's one of those good news,
bad news stories. The jewel of the crown is the Artillery Peak
manganese project with a historic resource reported by the US
Bureau of Mines of 100 million tons with an average grade of
10%. Since manganese is going for about $4,150 a ton, that makes
a ton of 10% manganese worth about $415 in contained metal or
just over $2 a pound. The bad news, of course, is that every
time Larry comes up with a new company, I have to hit the books
again.
I'll be as blunt as I can be.
Before I visited Artillery Peak a few weeks ago, you could have
conked me over the head with a bar of manganese and I wouldn't
know the difference between that and a baseball bat. I still
wouldn't but now at least I have some idea of what manganese
is used for; now that I've done my homework.
The deposit consists of 90
unpatented claims located in the southeast corner of Mohave County,
Arizona, some 30 miles due east of the Parker dam on the Colorado
River. Larry picked them up in the summer of 2007. He had talked
to experts in the steel business and they agreed manganese would
be the metal in the shortest supply.
Manganese is a critical metal
used in production of pig iron and steel. It competes with nickel
as a hardening agent. The price of manganese was as low as $.65
a pound 16 months ago and topped $2 a pound recently. With nickel
at $13 a pound, manganese could go up 400% and still be competitive.
90% of the world's manganese is used in the iron and steel industry.
30% of the world's production comes from South Africa and with
the power issues there; production of manganese is down almost
30%.
As an aside, the United States
imports almost all of the manganese used in our steel industry,
so a domestic source of the vital metal would be very valuable.
I was there for a day, a month
ago with Jim Marin, prospector and project manager. Manganese
deposits tend to form in stratagraphically controlled sedimentary
basins. Artillery Peak was the source of manganese mined as early
as 1917 through 1930. Production resumed in 1940 and continued
through 1945. The Federal government used to maintain stockpiles
of critical materials and bought manganese from the area up until
the end of 1955 when government stockpiles filled.
Since then manganese came from
higher-grade deposits located in China and South Africa. With
the increased demand associated with vast production of iron
and steel, the area is once again economic.
Jim Marin showed me a lot of
manganese. It's high grade and there is a lot of it. Where there
were existing mines, those areas could be opened up easily. My
suggestion to Jim and to Larry Reaugh would be to get an offtake
agreement as soon as possible and get this puppy into production.
As a result of the power issues in South Africa, the industry
is undergoing a critical shortage right now. Power is going to
be an increasing issue all over the world and Larry needs to
strike while the manganese is hot.
You could work out the math
and determine there is something like $41.5 billion dollars worth
of manganese in the Artillery Peak region but the number would
be meaningless. First of all, Rocher Deboule doesn't control
the whole area, though they continue to pick up additional land.
But by the time you got ready to produce tens of millions of
tons of manganese, the market would have changed dramatically.
In short the manganese market is hot, RD needs to get an offtake
agreement and get into production quickly.
We were early investors in
Rocher Deboule and have participated in two different private
placements. They are advertisers and we own a fair number of
shares. I like Larry Reaugh and Jim Marin and believe they can
get this into production quickly. It isn't difficult to leach
manganese; it's a very mobile metal. This could be fast tracked
into production and the company could make a lot of money, quickly.
We are biased. Naturally since
we share neither your profit nor your losses, you should take
responsibility for your own due diligence. The stock is not far
off the yearly low but the company has made a lot of progress
quickly. It's cheap and going a lot higher soon.
 Rocher Deboule Minerals
RD-V $.37 (Apr 11,
2008)
RDBHF.PK-OTCBB
32.3 million shares
Rocher Deboule website
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Apr 15, 2008
Bob Moriarty
President: 321gold
Archives
321gold Ltd
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