sentinal activity, page-3

Here's some more coverage out of US last night

http://www.jamestownsun.com/ap/index.cfm?page=view&id=D92Q7UMO0

"Company finds scarce mineral in ND coal seam"
By JAMES MacPHERSON Associated Press Writer, Aug 27, 2008 BISMARCK, N.D.

A brief mention in a half-century-old document has led an Australian company to a large and valuable deposit of high grade germanium, a scarce silicon-like mineral used in making semiconductors, transistors and fiber optic cables.

A consultant says it may be the first time a "significant" germanium deposit has been found in a coal seam in NAmerica.

Formation Resources Inc., of Bismarck, a newly formed unit of PacMag, based in West Perth, Australia, was granted a state permit in April to drill about 600 test holes for uranium in southeastern Billings County and north central Slope County, in southwestern North Dakota.

The company said about 336 test holes have been completed, and results so far have been positive for uranium and molybdenum, a substance used to harden steel. The surprising find was germanium.

China and Russia mine germanium from coal seams, said Jim Guilinger, a PacMag Metals Ltd., consultant and president of Arvada, Colo.-based World Industrial Minerals.

"It's a major find in our mind, and it's definitely a whole new wrinkle on the project," Guilinger said. "It's a lot more rare than uranium."

Guilinger said PacMag Metals tested for germanium because of a brief mention in state documents studied by company officials.

"There was a reference in a geological survey from the early 1950s that mentioned evidence of germanium in the same area where we are drilling for uranium," Guilinger said. "We looked for it, and sure enough, it was there."

The U.S. has never had a germanium mine., Guilinger said.

Australian law, unlike the U.S., requires the company to disclose results of its testing that would have a significant impact on its stock, Guilinger said. If the company had been based in the U.S., it likely would have kept the findings secret, he said.

"If this was a U.S. company, I probably wouldn't be talking to you," he told The Associated Press.

The United States used 66 tons of germanium last year, up from 22 tons in 2003, the U.S. Geological Survey says. But its domestic production has remained flat over the past five years at about 5 tons, the agency said.

Germanium in the U.S. comes from imported material, or from scrap. It is recovered as a byproduct from zinc mines in Alaska and Washington state, and is processed domestically at refineries in Oklahoma and New York, according to the USGS.

David Guberman, a USGS mineral commodity specialist, said germanium is fetching up to $1,590 a kilogram, up from $1,200 a year ago and $380 in 2003. A kilogram is about 2.2 pounds.

"The price has gone up dramatically," Guberman said.

The USGS says supplies are tight while demand is growing for such things as fiber optic networks, solar cells, night vision lenses and gamma ray detection instruments. a result of an increased focus on homeland security.

Guilinger said a depressed zinc market and smelter closures also have driven up the price.

Ed Murphy, the North Dakota state geologist, said germanium is a metalloid or a semimetal, meaning it has properties of both a metal and a nonmetal. He recalled the reference to it in the old geological survey, and said it is associated with material like uranium. But it is not found by accident, he said.

"If you weren't looking for it, you wouldn't find it," Murphy said. "It's not in your standard suite of what you would analyze."

At present, PacMag is the only company to apply for a drilling permit for uranium in North Dakota. Murphy said the addition of germanium could spur more interest from other companies.

"I think it just makes the economics more favorable," Murphy said. "With demands primarily being brought on by China and India in manufacturing, we're seeing interest in all these materials."

PacMag Metals has leased about 25,000 acres of private land in North Dakota in search of uranium. The company refers to the uranium-germamium-molybdenum drilling as the "Sentinel Project."

Guilinger said the most promising area the company has tested is a 1.5-mile long "rock outcropping," near an old Stark County mine that produced uranium in the 1960s. The land is owned by the Evangelical Lutheran Church in America, he said.

Germanium in the area "is quite pervasive and as big as uranium and molybdenum," Guilinger said.

PacMag Metals also wants to expand its search for uranium in the Little Missouri National Grasslands. The company has asked to explore on 18,000 acres of the grasslands, mostly in Slope County, using radioactive reading instruments and taking soil samples. No drilling would be involved, the company said.

The U.S. Forest Service said it would make a decision on the request early next month. If the company decides to move forward, Guilinger said it would use an open-pit mine. A processing facility would be built in the area.

Copyright © 2008 The Associated Press.