cnq & vml

In Far North Qld, Australia, two tiny companies are each progressing their tungsten prospects. I suggest they have enough proven reserves to supply Japan, USA and Europe for many, many years, allowing them to become independent of China and it's progressively restrictively supply practices.

Coupled with the likelihood (IMHO) that China will become a net importer of tungsten into the future, we are looking at these two tiny companies able to supply reliably a product of known quality (after all CNQ has supplied world markets before) in sufficient quantities to allow contracts for very large amounts of tungsten to be negotiated .

I am not suggesting that a merger/takeover situation will occur in the immediate future, but to me there is a compelling case for such a situation to occur at some point. If this does happen, then we will have a not-so-tiny company with significant reserves (very likely to increase as exploration continues) able to supply reliably companies/countries that are becoming increasingly wary of China's behaviour.

I think CNQ Shareholders are on the cusp of a very, very significant mining project that offers enormous upside with (IMHO) little downside. We have Directors putting their own cash in (a positive sign I would have thought) and we have a brownfield development with the benefits that brings.

It seems to me, given the adjacent location of these two tiny companies, forward planning by both would include the scenario of a combined operation -a situation I believe would add significant value for CNQ Shareholders (and VML) for to compete would simply diminish the potential returns for both companies (and their Shareholders).

Others may well disagree, but I would have thought one larger company (down the track, well after CNQ is producing/exporting) would be a more viable scenario than two tiny ones.

Enjoy the weekend