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HOPING TO TURN MINOR METAL INTO POT OF GOLD

Monday June 30,2008

By Andrew Johnson

A company is dialling into Aim to exploit the many opportunities provided by booming emerging-market demand for mobile phones, flat-screen TVs and other consumer goods.

Mining group Emerging Metals Ltd will focus on extracting so-called “minor metals” essential in a wide range of electronic goods and telecoms equipment.

The company has raised £13.46million from investors through a series of pre-float fundraisings, and will enjoy a market value of nearly £40million at 12dp a share when it floats on Aim tomorrow.

Emerging Metals has attracted heavyweight backers, notably co-chairmen Stephen Dattels, who founded UraMin and sold it to French uranium company Areva for $2.5billion (£1.3billion) last year, and emerging markets investor Jim Mellon, who runs Regent Pacific.

Chief executive Mitch Alland says prices of minor metals have been soaring over the past few years due to demand from countries such as Brazil, Russia and China.

The bulk of the world’s supply of minor metals comes from China. Prices have received a recent boost from the Chinese government’s decision to impose export restrictions to conserve supply for domestic consumption.

“If we take one of the metals, germanium, prices have risen from $300 per kg in 2002/03 to $1,400 per kg today,” says Alland.

He adds that other metals, such as indium, iridium and gallium, have enjoyed similar price surges.

EML believes it will be in a position to produce minor metals cheaply. As the metals are by-products of mining the more mainstream metals such as copper and lead, they can be found on slagpiles outside smelting plants.

The company has the rights to two slagpiles in Namibia at a smelter site run by Aim-listed copper miner Weatherly International.

EML believes one slagpile alone could hold up to 661 tons of germanium and 182,000 tons of zinc.

The company has paid Weatherly a fee plus shares for the right to exploit the slagpile.

The money raised so far will be used to conduct a feasibility study with a view to production starting in the next two years.

Alland says the group is exploring opportunities and an Aim presence would give it the ability to raise money and paper to underpin new projects, including in Europe, the US and Asia.