President's Message
April 26, 2012 TO OUR DEER HORN SHAREHOLDERS: With the completion of our latest Technical Report and resource estimate at the Deer Horn Property, I'd like to offer my perspective on what this development means for the company and future shareholder value. To the best of our knowledge, we have published the first and only NI 43-101 resource estimate for tellurium. Also, the Indicated and Inferred grades for tellurium rank high amongst published grades for tellurium deposits worldwide. We expect that this milestone will attract interest in the property from companies that sell tellurium or use it for manufacturing (such as solar panel makers). While tellurium prices have been under pressure this year, the long-term outlook for the metal remains positive. Not only has tellurium become advantageous for the solar panel industry, it remains an important alloy for improving the machining qualities of metal. It is also used in photoreceptor and thermoelectric devices, as a pigment and, more recently, in rewritable optical discs. New uses are being developed, including the new phase change memory chips developed by Intel. As a result, tellurium was recently identified as one of the "top five endangered elements" by metals supplier American Elements. Only eight years ago, tellurium traded for about $10/kg. The current price (after hitting a record high of over $400 in 2011) stands at around $170/kg, or the equivalent of $170,000/tonne. It's important to remember, however, that the Deer Horn Property is far more than just a tellurium project. The property contains significant gold, silver and tungsten mineralization. It is too early to know what this mix of metals means for any future mining or major company involvement. The relatively high grades of the metals discovered so far, however, along with the open nature of the veins and zones, make the property very attractive. We are particularly intrigued by Deer Horn's tungsten potential. Our work to date indicates the property may host extensive tungsten mineralization (see our November 14, 2011 news release). Tungsten prices reached record levels early this year and have since remained historically high. Tungsten was also included on the American Elements endangered elements list, while the British Geological Survey placed tungsten at number one on its 2011 list of elements ranked by unreliability of supplies. We believe that, as we explore the Deer Horn property further, tungsten will constitute a significant part of the property's value. For the 2012 exploration season, we are examining options and recommendations for further work. Our next round of exploration would likely focus on expanding the strike length of the Main Vein and Contact Zone where most of the gold, silver and tellurium have been discovered to date. We also plan to investigate the extent of the Harrison Scheelite tungsten zone. I look forward to an exciting year as we move ahead at the Deer Horn Property in 2012. Tyrone Docherty President and CEO | |