Plato Drilling for Niobium At Good Hope
Niobium is one of those magic metals vital to the manufacture of stainless steel, blades for jet engines, pipelines and superconductor magnets. Most people know little about the metal. Including me. So when the management of Plato Gold (PGC-V) contacted me and wanted to advertise, I had to bone up on the metal. I'd heard of it but I didn’t know much about it.
For the past ten years the price of niobium has been stable at about $41.50 a kilo. 84% of production comes from one company in Brazil. Growth is estimated at an increase of 25% over the next five years. Much to my surprise, niobium is a $3 billion dollar market now, some three times that of graphite. The World Steel Association suggests the addition of $9 worth of niobium would decrease the amount of weight in an automobile by 100 kilos. A 0.02% addition of niobium to a ton of steel (200 grams) increases the strength by 30%.
Pipelines for oil and gas use about 20% of the niobium consumed. Automobiles use an additional 22% while steel used in construction consume 40% and stainless steel requires another 8% of the total. It seems to be magic metal with a good size market.
Due to the dominance of the one major producer, CBMM, from Brazil no new niobium mines have gone into production since the 1970s. That actually creates a lot of opportunity for a small and nimble company to find a deposit and go into production.
Plato Gold has a project called Good Hope consisting of about 4200 square ha that is highly prospective for niobium. Surface samples have been taken of over 1% Nb. Since niobium is about 40.50 a kilo, a 1% assay is worth about $500 a ton CAD. The company plans a 5000-meter drill program beginning shortly.
The share price of Plato has tripled since October to $.05. With 165 million shares outstanding that gives the company a market cap of about $6 million USD. If Plato hits the mineralized dikes they believe they have identified as being over 1% Nb, the shares will go up. If they don’t hit, the shares will sink back to $.005 as they were last year. It’s pretty much an all or nothing shot for Plato, the market isn’t going to put up with mediocre results.
I’ve talked with both management of Plato and their head technical guy. They assure me they know what they have but only the drill results will tell the real tale.
The story was good enough for me to add a position I bought in the open market and I hope they hit. Plato is an advertiser so you should do your own due diligence. I would like to see management come up with some kind of corporate presentation, the information on the website about their plans and direction is pretty sparse.
Plato Gold Corp