Colt Resources Inc. (TSX-V: GTP) (OTCQX: COLTF) (FRA: P01) COLT is the largest lease holder of mineral concessions in Portugal country. Colt’s shareholder base, management and advisory team have a broad international scope.
Tabuaço Tungsten Project is 100% owned and located in in northern Portugal. The high grade nature of the mineralization confirms Tabuaço to be one of the highest grade, undeveloped tungsten deposits in Europe.
Four drills are operating at the project at present to expand current resources and identify new mineralized areas. The mineralization, hosted in shallowly dipping skarn units, remains open for expansion in several directions.
Roskill Information Services - Tungsten: Market Outlook to 2016 (10th edition)
In early November 2008, Roskil Information Services provided their 10th Edition outlook on Tungsten. This report provides both the history and the favorable outlook for Tungsten
Roskill noted that the tungsten market in the 1990s was characterised by oversupply from China and low prices, which meant that most western producers ceased production, as prices were well below costs of production.
Roskill indicated in its Tungsten history that as the Chinese government began the process of controlling its tungsten industry in early 2000 onward through the imposition of production and export quotas, and the removal of export rebates on tungsten products prices escalated.
During these years of excess supply, stockpiles of tungsten were built up by producers and also governmental organisations. These stockpiles overhung the tungsten market and tended to act as a brake on price rises. Most of the material contained in these stockpiles has now been sold and trends in tungsten prices have correlated more closely to the underlying supply/demand fundamentals since 2005/2006.
Roskill Notes that Tungsten exhibits strong market fundamentals
The onset of the global recession in 2009 saw tungsten prices fall sharply. Between the end of 2008 and beginning of 2010, prices for Chinese APT fell by just over 20%, with a similar fall in European prices. Of this price fall, approximately 92% took place in the first half of 2009, with the second half of the year showing early signs of stability. As the global economy started to improve from the fourth quarter of 2009, demand for tungsten also increased. The general improvement in economic sentiment saw prices increase steadily throughout 2010 and the rise in prices accelerated in 2011 as supply of tungsten had struggled to meet the recovery in demand.
The relatively strong fundamental position in the tungsten market is illustrated when tungsten price trends are compared to trends in similar metals such as cobalt, nickel and molybdenum. The fall in tungsten prices was significantly smaller in 2009 than for the other metals , with tungsten prices dropping a maximum of 25%, compared to 70% for nickel, 68% for molybdenum and 43% for cobalt (index = January 2007).
The recovery in tungsten prices since the credit crisis and economic recession in 2009 has also been much stronger.
While tungsten prices in July 2011 were at 180% of the level recorded in January 2007, prices for cobalt, nickel and molybdenum were all still below the levels of January 2007, with price indices of 64, 64 and 58 respectively.
This would seem to be a clear indication that supply of tungsten is relatively tight as prices held up when demand was depressed and have increased strongly now that consumption of tungsten has recovered to pre-crisis levels.
New tungsten projects look to ease the tight supply situation
Primary tungsten output increased steadily from 35,650t W in 1998 to just over 56,500t W in 2008, an average growth rate of 4.7%py. Despite the steep drop in demand for tungsten in 2009 output of tungsten increased further to an estimated 61,500t W. This was almost entirely due to an increase of 7,500t W in China, where consumption of tungsten continued to increase despite the economic problems elsewhere in the world. Production jumped again to almost 70,000t in 2010 on the back of a further increase in Chinese output.
Historically, primary production has not been sufficient to supply market demand and has been supplemented by sales from stockpiles. The largest of these stockpiles was located in the former Soviet Union, but is now thought to be exhausted.
The US strategic stockpile continues to be drawn down at the rate of around 2 – 3,000tpy.
From 2011, mine production of tungsten is likely to grow relatively strongly as a number of tungsten projects are due to come on-stream after being delayed by the credit crisis. The majority of the new projects are scheduled to come on stream between 2013 and 2015, but it is always possible that these timelines could slip further meaning that the significant increase in tungsten output would come in the 2014 to 2016 period.
Roskill forecasts that mine output of tungsten could grow from 72,000t W in 2011, to around 100,000t W by 2016.
Tungsten prices may not have peaked
Tungsten prices rose strongly throughout 2010 and most of 2011, as most of the economies outside China recovered from the credit crisis-induced recession and demand for tungsten increased in parallel. At the end of September 2011, prices for Chinese APT had reached US$450-460/mtu, compared to US$330/mtu at the beginning of the year and US$200/mtu at the beginning of 2010. APT prices are now well above the previous peak of US$300/mtu in June 2005.
Roskill expects to see a market fluctuating around an equilibrium level, but forecasts the market to be in deficit in both 2011 and 2012, before new supply enters the market.
Given the current levels of APT prices, Roskill expects that the average for the whole of 2011 will rise to a forecast US$430mtu by the end of the year. Very few of the significant new tungsten projects are expected to deliver any substantial tonnages of tungsten in 2012, so the market will be relying on existing producers to cope with any growth in demand. As a result, Roskill predicts a further tightening in supplies of tungsten and, therefore, further price rises, with an average APT price of US$475/mtu.
Prices are expected to ease between 2013 and 2015 as the bulk of planned new tungsten production capacity is expected to enter the market. Demand for tungsten is expected to continue to grow to 2016 and beyond, putting further pressure on the supply side and requiring more new capacity.
Market outlook to 2016, 10th edition from Roskill Information Services Ltd, 54 Russell, London SW19 1QL, England.
See: http://www.roskill.com/tungsten
National Instrument 43-101 Resource Estimate Highlights
- Indicated resources total 760,000 tonnes with an average grade of 0.58% WO3.
- Inferred resources total 1,330,000 tonnes with an average grade of 0.57% WO3.
The initial estimate has been focused on a portion of a larger zone of mineralization that remains open.
Link Here to : Table (Table 1 in November 7, 2011, COLTF Press Release) which summarizes the in-situ Mineral Resource, stated at a 0.3% WO3 cut-off grade, within the defined mineralisation models.
In total, two domains were estimated, namely the upper and lower skarn units.
The estimate is considered to have reasonable prospects for eventual economic extraction, as it is constrained by a cut-off grade derived from reasonable underground mining and processing costs.
The estimated Mineral Resources for the Tabuaço project are as follows:
- Indicated Mineral Resources of 760 kt at a mean grade of 0.58% WO3, which is the equivalent of 4,400 t of contained WO3; and
- Inferred Mineral Resources of 1,330 kt at a mean grade of 0.57% WO3, which is the equivalent of 7,600 t of contained WO3
Colt Traded on Three Exchanges
The Company is traded on three exchanges, the Canadian Venture Exchanged, it is an OTCQX Company in the United States. In Europe Colt is traded on the Frankfurt Exchange in Germany.
- TSX – Venture Exchange: Link Here – Symbol: GTP
- OTCQB: Link Here Symbol: COLTF
- Frankfurt Exchange: Link Here P01 (That is a zero in the middle)
Nikolas Perrault
President & CEO
Colt Resources Inc.
Tel: +351916150926
Fax: +15146356100
info@coltresources.com
Declan Costelloe CEng,
Executive Vice President and COO
Colt Resources Inc.
Tel: (514) 317-6301
Fax: (514) 317-6302
info@coltresources.com
Renmark Financial Communications Inc.
Florence Liberski: fliberski@renmarkfinancial.com
Bettina Filippone: bfilippone@renmarkfinancial.com
Tel.: (514) 939-3989 or (416) 644-2020
www.renmarkfinancial.com
FORWARD-LOOKING STATEMENTS: This document does not constitute an offering document. Potential investors or shareholders should not rely on the information contained in this document before making an investment decision. Certain of the information contained in this presentation may contain “forward-looking information”. Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of Colt Resources Inc. (the “Company”), or the assumptions underlying any of the foregoing. In this presentation, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or management’s good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company’s control. These risks, uncertainties and assumptions include, but are not limited to, those described under “Risk Factors” in the Company’s revised annual information form dated April 20, 2011 available on SEDAR at www.sedar.com and could cause actual events or results to differ materially from those projected in any forward-looking statements. The Company does not intend, nor does the Company undertake any obligation, to update or revise any forward-looking information or statements contained in this presentation to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.
SRK Consulting (U.S.) Inc. has been awarded a broad mandate to provide overall technical assistance to Colt in Portugal and will be producing several NI 43-101 compliant reports as projects progress (see: January 18, 2011 press release). Jeffrey Volk, MSc, CPG, FAusIMM, of SRK Consulting (U.S.) Inc., is the independent qualified person, as defined in NI 43-101, for Colt’s projects in Portugal.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or any content on this web site.
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