News

May 06, 2009

Geodex Engages In Some Nifty Footwork In Response To A Possible Resurgence In The Tungsten Price

By Alastair Ford

News that Geodex Minerals is picking up more ground around its Mount Pleasant West tungsten property in New Brunswick prompts a quick phone call to Chris Anderson, Geodex’s business development director. Geodex has battened down the hatches as it sails on in the face of the recent economic storm, having cut costs on the ground as well as boardroom salaries. Such moves will no doubt serve to comfort any of Geodex’s investors that are themselves hard pressed. They may also go some way towards convincing potential lenders that the company is serious about its tungsten projects, and isn’t just another penny dreadful. But it’s the fundamentals for tungsten that really sell the Geodex story, as Chris Anderson knows well. The outlook for tungsten, he argues, is extremely favourable. The tungsten price did fall in the wake of the global financial crisis, but not by much more than 10 to 12 per cent. And supply remains tight. That’s why Geodex is still working on the economics at its lead project at Sisson Brook, also in New Brunswick, and that’s why it’s picking up new ground around Mount Pleasant West.

Geodex clearly, is not a company that’s going to stand still, even if markets elsewhere are somewhat frozen. The arguments in favour of tungsten are many and varied, but perhaps the most compelling at the moment is that it’s used in the manufacture of heavy-duty industrial cutting tools, and these ought to be much in demand once the world’s stimulus packages start converting into hard infrastructure spend. As Chris puts it, cutting tools are “at the outward edge of industrial growth”, and...