Canadian Explorer Demonstrates Extremely High Gallium Values
Gallium is one of those metals that even many commodity investors know little about, but which is of crucial or ‘critical’ importance for military semiconductors and other advanced technologies. Recently, the price of gallium shot up to its highest level since 2011, after China, which dominates the market as it does with many other raw materials, imposed export restrictions.
The price for gallium, for which there is no spot market, reached $595 per kilogram on Friday according to calculations by Fastmarkets experts, which represents a further increase of 17% compared to the last price calculation on December 11.
The People’s Republic made it more difficult to export several metals, including gallium, to the US at the beginning of the month, which is seen as a sign of rising tension in trade relations between the world’s two largest economies. According to the US Geological Survey, China was responsible for 98% of global gallium production last year.
China Dominates the Gallium Market
The market for this easily liquefiable metal is relatively small, but it has great importance in semiconductor manufacturing and is also needed for television and mobile phone screens, as well as solar cells and radar equipment.
Already in August, the Chinese government introduced initial export controls for gallium, which already caused prices to rise and significantly disrupted trade flows. According to calculations by Bloomberg news agency – based on Fastmarkets data – the price of gallium has more than doubled since then.
In fact, gallium is mainly obtained as a by-product in the production of aluminum and zinc. The average contents in the raw materials are relatively low, ranging only between 10 and 150 mg/kg depending on the source material. Not to mention that the actual yield also depends on the efficiency of the extraction process.
Canadian Junior Reports Extremely High Gallium Contents
The gallium contents that Canadian Cerro de Pasco Resources (CSE: CDPR; OTCQB: GPPRF; FRA: N8HP) recently reported from its Quiulacocha project in Peru are therefore all the more remarkable. In addition to an average silver content of 53.64 g/t, Cerro de Pasco recently reported an average content of 34.61 g/t gallium!
This is the average value from the analysis of 177 samples from nine of 40 drill holes that the company recently completed on the Quiulacocha project. However, it should be noted that this is not a typical hard rock exploration project, but Cerro de Pasco Resources is drilling on massive tailings piles.
These come from high-grade, historical mining and lay fallow for decades until Cerro de Pasco received permission this year to explore and later exploit them. The company is already conducting metallurgical studies for the production of concentrates, in which gallium and the also present critical mineral indium could play a role.
Guy Goulet, CEO of Cerro de Pasco Resources, sees in the detection of elements such as gallium and indium, which, as he explains, are crucial for advanced 5G technologies, robotics, and nuclear medicine, ‘the potential for valuable by-products in the planned concentrates.’ So it will be interesting to see if the further, still pending drill results from the Quiulacocha tailings confirm the extremely high gallium contents.
Conclusion: The analysis results of 177 samples from nine drill holes in the northern and central areas of the polymetallic tailings (Ag-Zn-Pb) represent only about 15% of the current drilling program. In other words: 85% of the results are still pending. Cerro de Pasco is expected to release the remaining samples gradually starting from the beginning of next year. The results should always be evaluated against the background of the historical partial exploration in this part of the Quiulacocha Tailings. To date, the results indicate silver grades that are 37% higher than expected. In addition to the metal grades, the pending results of the metallurgical tests are, of course, crucial for the project’s economic viability. In its preliminary calculations, Cerro de Pasco has publicly based its estimates solely on the historically measured metal grades and a metal recovery rate of 41%. Even with these figures, according to Cerro de Pasco, the project would generate an annual profit of 140 million CAD in a production scenario of 10,000 tons per day / 3.6 million tpa. Therefore, it’s worth paying attention to the metal grades and perhaps even more to the upcoming metallurgy!
