has goldman sachs redefined precious metals s, page-19

standrew & ryana,

I feel the need to throw in my two cents worth here even tho' last time I did it, I got crucified and accused of all sorts of things.

I want to look at the strengths and weaknesses of MKY (apart from the lack of communication!)

If you are in MKY, you're in it for the bauxite (announcement imminent, maybe ore bodies identified after a lot of work, then maybe JVs or TOs). Or you're in it for the coal (details needed urgently).

You are not in it for the uranium or the thorium. Indeed the 'Wally' project is a disadvantage to MKY holders (IMO) as it will dilute the efforts of the company and soak up exploration funding on a low percentage play (IMO).

Why do I think this? Well, look at the uranium ore bodies that are being mined around the world. There are only two minerals that occur in large enough deposits to form an economic orebody. These are where uraninite (a uranium oxide) - think Ranger and Olympic Dam - is the primary mineral (but might have some minor secondary alteration minerals on the surface) and carnotite (a calcium-uranium-vanadate)- think Yellirie and Lake Way. [A carnotite mine, incidentally has the advantage of a saleable bi-product - the vanadium.]

There is, to my knowledge, not one single uranium mine in the world that is not either uraninite or carnotite (but I could be wrong). So what do we have at 'Wally'? Well, if you read the company announcements very carefully, they refer to their uranium mineralization as 'Loveringite'. Loveringite is a very rare and complex uranium mineral found in tiny quantities in only a few places in the world. I think the first occurence found was in the Jimbalana Dyke, near Norseman WA. For a good description of the composition and mineralogy of this occurrence, Google Loveringite and go to the 1967 publication by John Lovering and Bob Kleeman. They were working on very tiny grains for much of their studies.

[Now as an aside here, I am aware that just because all the world's uranium mines at present (IMO), are uraninite or carnotite that doesn't mean to say that it's impossible that an economic orebody won't be found in the future where the uranium minalization is something other than uraninite or carnotite. I'm aware that all gold mines used to be thought of as only native gold (i.e. metal) until at one very famous mine, they found that they had been throwing out a lot of the gold in the tailings as a significant amount of it occurred as gold telluride (or 'telly'). The mine? - Kalgoorlie!]

So yes, Loveringite might be the primary uranium mineral in an economic mine some time in the future - but you have to give it long odds.

Now, the thorium. There advantages and disadvantages of using thorium as a nuclear fuel. Its abundance in the earths crust is about 4 times more than uranium. Also, it only has essentially one naturally occuring isotope so you don't have to enrich it as you do uranium. As a reactor fuel, it doesn't breed plutonium (as uranium does) and is therefore regarded as good by the anti-bomb and anti-terrorist brigade.

Its disadvantages include:- it doesn't form a mineral of its own (uranium forms unraninite) and therefore doesn't occur in deposits of very concentrated grade. Also, it doesn't work! In the uranium fissioning process, the fission event produces a few neutrons which can then collide with other uranium atoms and fission them, giving more neutrons, etc. This is called a chain reaction and is why uranium is considered to be able to undergo spontaneous fission. But thorium doesn't emit enough neutrons of the right energy to keep the fission process going. [These can be supplied by an external generator to keep the chain reaction (& power reactor) going. Incidentally, this isn't such a bad thing. Because if something goes wrong, you can turn the reactor off by switching off the neutron source. You cant do this in a uranium reactor.]

There's another curious thing about thorium and its geochemical occurence. Although it doesn't form a mineral of its own, it commonly occurs in a phosphate mineral called monazite. Monazite also carries a certain amount of rare earths - in particular, cerium, yttrium & lanthanum. These are used in super magnets and in VDU screens (for the colour). It explains why people like Goldman-Sachs confuse thorium with rare earths. They often occur together but really have nothing to do with each other (chemically). In the piece by Goldman-Sachs about that little rare earth mine in California (that the Chinese wanted), the thorium was stockpiled while the rare earths was the saleable product.

I don't know that there is a big demand for thorium. Certainly, I don't know of any thorium mines. I would think that there is no chance of basing a thorium mine on what we have seen at 'Wally'. This is mainly because monazite (& therefore thorium) commonly occurs in the beach sands/heavy minerals industry. If Australia wanted thorium, we would go to the beach sand/heavy mineral miners on the east coast, the west coast and the downstream Murray valley.

If there was a world market for mining thorium, then the biggest reserves are in India - by far. Along the beaches of Kerala (south west India) there are sands extremely high in thorium. In fact they are so high, you would get your annual dose of gammas in a relatively short period of exposure.

Well, I've probably said too much. Please don't think I am either down-ramping or up-ramping. I just trying to give a view of the deposit as I see it. And I'm waiting for the bauxite announcement.