The Race to Locate High Grade Targets
High grade mineral demand and prices are rising and as a result, mining companies are investing more resources into exploring and discovering high grade targets. High grade targets are preferred as they are refer to large deposits of high grade elements, thus removing the guesswork of whether or not to commit the resources needed to extract the deposit. It is a relatively small risk for a potentially large payout. Smaller targets face more scrutiny and cost analysis to be deemed economically feasible.
High grade targets are so highly sought after that when a mining company announces they have prospects of one, their stock usually takes a big jump in relation. In the case of a junior exploration (a smaller, independent) company this can lead to securing vital funds to commit to the exploration program. All mining companies aim to locate and lay claim to the high grade targets, but especially for a junior exploration it can mean the difference between the immediate success and failure of the company.
Some of the better known and highly sought after high grade targets are:
The benefit of identifying a high grade target is the ease of locating investors to fund the exploration project. The return on investment can be many times worth the risk should the target fulfill its potential and this generally leads to investors looking to secure the rights to the project rather quickly. The amount of drilling, testing and sampling done prior to declaring the area a high grade target is extensive and serves to identify the validity of the target as much as possible prior to actual extraction.
The Causes for Demand
The military is especially quick to invest in high grade targets featuring Uranium. Securing a good supply of Uranium is essential to developing nuclear power and weapons. It is estimated that military forces have secured up to 95% of the world's Uranium stores.
Rare earths are also called "technology metals” and are a key component to nearly every single high tech device manufactured today. Demand and prices have soared to record highs and currently China is responsible for supplying 95% or more of the world's rare earths. Locating high grade deposits of rare earths outside of China is now a priority for many countries as well as companies that have a large reliance on the elements. Toyota is one of the first companies to formally invest in a mining company in hopes of securing their own private supply.
Lithium is best known for its use in Lithium-Ion batteries. These batteries are primarily used in the manufacturing of hybrid electric batteries and for high-drain, rechargeable electronic devices like laptops and cameras. The increased market for electric vehicles alone is causing demand for Lithium to skyrocket and for high grade deposits to become especially coveted.