Friday, 12 July 2013

Jennings Capital maintains buy rating on Canada Fluorspar

Jennings Capital analyst Ken Chernin has kept his speculative buy rating and 60 cent 12-month target price intact on Canada Fluorspar (CVE:CFI), following the company's unveiling of first results from its phase 3 diamond drilling program at the Grebes Nest property in the area of St. Lawrence, Newfoundland. 
The company said Thursday there is potential to expand the structure for more than 4,000 metres along strike. The Grebes Nest vein is part of the company's St. Lawrence fluorspar project in Newfoundland, and lies about 4 km from the former Tarefare mine and less than 6 km from the former Blue Beach North mine, according to its statement.  
In total, Canada Fluorspar has drilled 21 holes on the Grebes Nest property, identifying fluorspar mineralization along a strike length of approximately 1.5 kilometres and extending to more than 170 metres in depth. 
"According to CFI, their initial interpretation of the drill results to date indicates that the mineralized structure maintains a relatively uniform strike and width within a vertical depth of approximately 100 metres within the section of the Grebes Nest target area," Chernin wrote in the emailed research note sent Friday morning. 
The first three holes at Grebes Nest are all located on the western part of the grid area, with one hole intersecting 48.68% fluorspar over 16.85 metres. The structure was intersected at around 100 metres below surface, and tested mineralization below the old shaft and pre-existing open cut on surface that was mined by a previous operator in the 1990s. 
The company has 41 known mineralized veins on its fluorspar assets in St. Lawrence, two of which – Blue Beach and Tarefare - have been drilled and vended into a partnership with French chemical giant Arkema, while drill rigs started working at its own Director Vein in January. After the rigs finished turning at Director, Canada Fluorspar moved on to Grebes Nest, with 5,000 metres of drilling planned on this vein by the end of the year. 
With the Blue Beach and Tarefare veins now being reviewed under the partnership, the Canadian company is looking to unlock the potential value of the Director Vein, as well as the Grebes Nest Vein, this year through drilling. 
Fluorspar is used to reduce the amount of energy needed to produce aluminum, and is also used for photovoltaic solar panels, but the biggest application is fluoro chemicals – which are used in products ranging from air conditioners and refrigerants to lithium batteries and the material Gore-Tex. Consumption of the mineral is expected to reach 7 million tonnes by 2015, but there is currently no domestic supply in Canada or the U.S. as these two countries rely on Mexico, the second biggest producer after China – which is expected to become a net importer soon. 

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