CANADIAN MINING PERSPECTIVES: The bright side of germanium

WAR EAGLE MINING of Vancouver wants everyone to know about germanium, a brittle, silver-white metalloid that has properties similar to silicon. It is used in a wide number of commercial applications, including fibre optics, night vision goggles, and as a semi-conductor in small electronic chips. Chances are your cell phone or BlackBerry contains germanium.

There are good reasons for savvy investors to keep geranium on the radar. "China controls the lion's share of the world's germanium reserves," according to War Eagle, "and has imposed restrictions on sales and distribution. Currently, America's stockpile of germanium is expected to be depleted within two years, and demand is only expected to increase. As a result, North American-based germanium miners seem like an attractive pick for investors."

"Germanium is playing an increasingly important role for the military and consumers, and the Chinese germanium market has a distinct lack of transparency. That could make Chinese investments seem like a risky choice," says War Eagle president Terence Schorn. "Our background and experience leaves us well positioned to lead the North American market."

He would, of course, like to invite investors to become stockholders of War Eagle. If they did, what would they get for their money? War Eagle is a junior company with a royalty interest in the Candle Lake diamond project in central Saskatchewan, a 25% share of the George's Lake gold project near La Ronge, Saskatchewan, and the MAC tantalum property (optioned to Eagle Hill Exploration) in the Northwest Territories, and of course a germanium hopeful.

The former Tres Marias zinc-germanium mine in Chihuahua, Mexico, is receiving most of War Eagle's attention these days in the hope that it can be profitably reopened. Underground exploration drilling has returned these highlights: 15.1 metres of 31.25% Zn and 100 g/t Ge; 3.86 metres of 37.74% Zn and 226 g/t Ge; 16.28 metres of 14.97% Zn and 25 g/t Ge, and 2.63 metres of 15.02% Zn and 195 g/t Ge. The average grade of the deposit is 18.76% Zn and 75 g/t Ge, using 5% Zn and 50 g/t Ge cutoff grades. These numbers all come from the fourth and 6.5 level of the mine.

Germanium currently trades at between US$1,200 and $1,300 per kilo. The mineral traded in the US$250/kg range only four years ago.

If my crystal ball could tell me that the price would continue to go up that steeply, I would want a little germanium stockpile of my own.