Voyageur Minerals Aiming to Change Barite Supply Dynamic

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Wednesday, May 31, 2017

Most everyday people have probably never even heard of barite, the main source of the chemical element barium, but it is a good investment target essential to the oil and gas exploration industry and a part of more common products that touch your world daily.  7.3 million tonnes of barite were produced in 2016, with China (3.1 million tonnes), India (1.3 million tonnes) and Morocco (550,000 tonnes) being the world’s top three producing countries.

Based on averages, about 5 million of the 7.3 million tonnes of the pearly mineral produced are destined to be used as a weighting agent for drilling fluids in O&G exploration.  The rest is typically higher-grade barite used for other applications, including paints, automobile brakes and clutch plates and electronic devices.  It’s this array of uses that has analysts at Market Research Future forecasting rapid growth over the next five years.

Calgary, Canada-based Voyageur Minerals Ltd. (TSX-Venture:VM) intends to capitalize on the growth trend and change the supply chain that has Canada and the U.S. importing nearly every ounce of barite from China and India.  The company has built a portfolio of three wholly-owned barium sulfate (BaSO4) deposits in the area of Radium, British Columbia.

The barite projects are complemented by two lithium brine projects in Utah.  In mid-May, Voyageur, through its JV partner, increased its land position at the Paradox Lithium Brine Project by 218 percent, increasing its position to 2,290 hectares.  The plan is to devote corporate resources mostly to Frances Creek, the most advanced property in the portfolio, to generate cash flow, monies which then can be used to expedite concurrent exploration on the lithium and other barite properties.

The U.S. and Canada rank high on the list of the world’s biggest barite consumers, using nearly 4 million tons of barite in 2014.  With low-quality barite costing about $400 per tonne and high-grade roughly $2,000 per ton, the opportunity at hand is quite lucrative.  Work to date suggest that two of Voyageur’s projects could have barite of industrial (high) grade.

At Frances Creek, more than 2,000 meters of historical drilling delineated a strike length over 600 meters to a vertical depth of 90 meters that remains open in all directions.  An independent review of Frances Creek estimates exploration target ranges from 53,856 tonnes to 215,422 tonnes @ 95.86% to 99.26 % BaSO4.  If ongoing exploration can confirm this type of resource, it’s arguable that Frances Creek by itself is far more valuable than the $2.9 million market capitalization the company currently has.

Voyageur is gearing up to test the local barite market, applying for a 10,000 tonne bulk sample permit.  The bulk sample is an early step in the company’s goal to be generating cash flow from operations in the second half of next year.  The first sale of industrial barite also qualifies Voyageur as a first mover and the only company producing high-grade barite in Canada and the U.S.

At Jubilee Mountain, oil-field-grade barite was produced historically, with over 40,000 tonnes mined up until 2005.

As oil and gas exploration keeps increasing in the U.S., Voyageur is in an enviable position with its barite projects, especially given the advanced exploration nature of Frances Creek and the production at Jubillee Mountain as recently as 12 years ago.  At a conservative price of $1,000 per tonne of industrial barite, Voyageur management estimates that the first 12,000 tonnes produced at Frances Creeks will deliver $9.6 million in net earnings, an impressive figure for a Company which currently has a market cap of less than $3 million.

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