Cantex Plays the Germanium Card
On the strength and much of the money from one of the most famous prospectors in Canadian history, Chuck Fipke, Cantex came to life in 1998 with funds from his diamond discovery at Dia Met.
The company has had projects in Yemen and still has four gold projects in Nevada but their main focus is in the Yukon where in 2011 Chuck and a partner from Ekati, Chad Ulansky, believed there was an interesting area of 30,000 square km that had seen little exploration. So they picked it up.
Cantex has done the typical Yukon remote exploration story since 2012 that mostly consists of spending a lot of money on helicopters and expensive personnel during the limited exploration season in the far north. So far the company spent over $90 million CAD in total. While their results lately have been excellent they are operating in one of the most expensive regions to work in the world.
At their Massive Sulfide Project Cantex has outlined a 2.3 km strike of high-grade silver, lead and zinc. The potential 4 km strike compares favorably in grade to the world’s largest Ag-Zn-Pb mine in Australia, Broken Hill with 7 km strike and Mt Isa with 4 km of strike.
The deposit itself is similar in age and origin to that of the Sullivan Mine, Mt Isa and Broken Hill. Originally all were 1.7 billion years ago hosted in submarine clastic sedimentary rocks. Broken Hill, Red Dog in Alaska are similar in grade to that of the Massive Sulphide main zone with over 20% combined lead and zinc.
If that were the entire story it would be just another Canadian Junior with a high-grade deposit in the middle of nowhere that would cost a bundle to get into production. Over the past twenty years there were a few pops in the share price but no one has gotten rich off of owning the stock.
However, there is an advantage to having two of the top geos in Canada running the project. They are successful at thinking outside of the box. Early this year it occurred to CEO Chad Ulansky that like other submarine SEDEX deposits their property might just host some critical rare elements such as germanium and gallium.
Chad got excited at the idea and called his partner who was out in the field. He explained his theory and Chuck told him he had the same idea and had shipped half a dozen samples out for assay. They turned out to have some of the highest-grade germanium grades of any mine in the world.
That is a BFD.
Teck operates a smelter at Trail that processes the Ag-Zn-Pb concentrate from the Red Dog mine in Alaska. The ore contains between 104 and 249 g/t germanium. Teck would love to process ore from the Cantex property.
Initial study from 36 intercepts over 2.2 km of strike at the Main Zone gave values of germanium averaging 640 g/t with a total of 140 samples. Another area the company called the GZ Zone shows 690-g/t germanium.
On August 1st of 2023 China began to restrict the export of gallium and germanium in response to the incredibly heavy handed restriction by the US of exporting the latest chip making machines to China.
Since the United States was defeated in Afghanistan by a bunch of goat herders some bright spark in the Pentagon thought they should move their sights to something easier to defeat than a goat herder. So the US invited Russia, with the world’s largest armory of nuclear weapons, to have a go at Nato in Ukraine. That worked out a lot better for Russia than for Nato and Ukraine but the MIC needs feeding so the US has been sending strong signals to China that they are next up for a conflict with the US.
And while it seems to make sense when you anticipate conflict to plan on how you are going to defeat them, at the very same time they are trying to figure out how to defeat you.
While China would like to have access to the latest and greatest chip making machines, the US isn’t going to have any success making any chips without having a supply of germanium and gallium. As of now the score is 40-Love in favor of the Chinese.
On the other hand, as long as they refuse to export germanium, the price is going to skyrocket. Currently depending on which source you use for pricing, the cost per gram of germanium varies from $1.33 to $2.75. That would make the 640 grams per tonne at the Main Zone worth a minimum of $851 a tonne. That’s like adding almost half an ounce of gold in value per tonne.
But there is another side to the story that everyone is missing. The MIC has woken up to the fact that there are a number of critical elements that China has a chokehold over including germanium. The US has begun to provide grants, not loans but grants to companies who can provide access to the necessary rare elements.
With the highest-grade germanium project in the world, it may be possible to get much of the funding from Uncle Sam.
Cantex has management, heavy hitter investors and has just added some icing to the cake in the form of germanium. Adding the value of half an ounce of gold per tonne would probably make it worth mining anywhere on earth and some areas on the moon.
I like the Cantex story enough to have picked up some shares while they were still on the discount table. I suspect a major is going to want to have a piece of a company with 100% ownership of a high-grade Ag-Zn-Pb deposit with a germanium kicker.
Cantex has become an advertiser. They have just redone their presentation. It’s excellent and anyone interested in the story should peruse through it. As a shareholder I am biased so do your own due diligence.
Cantex Mine Development Corp