PHOENIX, ARIZONA–(Marketwire – Sept. 27, 2011) – VIKING MINERALS INC (OTCBB:VKML) (www.vikingmineralsinc.com). Company comments on Financial Times article August 31, 2011.
Chinese companies and investors are stepping up their purchases of industrial commodities such as copper, in a show of confidence in the global economy that stands in contrast to the turmoil in western markets.
The wave of buying is providing support for metals and minerals prices after commodities prices fell this month at worries about a double-dip. Senior executives at trading houses, mining companies and banks said Chinese consumers had used the recent drop in prices to rebuild stocks.
“China is significantly less pessimistic relative to people in the western world,” said Raymond Key, head of metals trading at Deutsche Bank. “On dips they are restocking, especially in copper.” An executive at an important Chinese trading house added: “There is no doubt some traders have been buying [copper] recently.”
The surge in copper buying benefits the largest exporting nations, including top producers Chile and Peru, and miners such as Freeport McMoRan Copper & Gold, BHP Billiton and Xstrata, and trading houses such as Glencore and Trafigura.
Viking Minerals President Charles Irizarry commented “Investors in resource companies such as Viking must keep a global perspective when looking at North American exploration companies. It is not Europe and the United States that we look at when making decisions on what to mine and where. It is countries like China (which consumes nearly 40% of the world’s production of copper) and where China’s economy and demand are heading that is important. Global production of copper simply is not going to keep pace with demand, this leads to higher copper prices and larger producers looking for new deposits. Despite economic turmoil in the western world proving up a large Copper deposit today will pay huge dividends tomorrow”
Copper prices fell to a 8-month low of $8,446 a tonne in early August, but since then prices have risen more than 9.0 per cent to $9,225 on Tuesday.
China accounts for 38 per cent of global copper demand, and as such has the power to almost single-handedly prop up the market even if companies in the west are holding back. Nonetheless, traders warned that Chinese buyers could rapidly step back from the market if they believed prices would fall further.
The buying by China marks a reversal of the trend in the first half of this year, when consumers in the country made minimal purchases of metals such as copper, choosing instead to run down their inventories as the government’s drive to tighten credit reduced their ability to import large volumes. China’s net copper imports in the first seven months of the year were down 37 per cent from the same period in 2010.
Glencore, the world’s largest commodities trader, said that so-called bonded warehouses stockpiles had seen a “significant drawdown”. It estimated that stocks have “at least halved” since the beginning of the year.
ELKO COUNTY NEVADA AREA PLAY
There are 298 mines in Elko County, Nevada, located between Reno and Salt Lake City and is a prolific copper mining area. Two of the most noteworthy mines include the Robinson Mine which is an open pit copper and gold mine that has operated continuously since 2005 producing averagely 121 to 126 million pounds per year of copper. And the Bingham Canyon Mine, which is the world’s largest open pit mine and has produced more copper than any other mine in history – approximately 14.5 million tons.
ABOUT VIKING MINERALS
Viking Minerals is engaged in the acquisition and development of near-term producing copper, gold and silver properties in the United States and Canada. Viking is focusing on developing its Dolly Varden properties in northeastern Nevada, adjacent to the Victoria Copper mine. The Large resource of copper in this area has been well documented and hosts two large operating mines – Battle Mountain and Robinson. With solid management, an experienced technical team, and a large copper-rich land position in mining-friendly Nevada, Viking Minerals is well positioned to be North America’s next great mining company.
FORWARD-LOOKING STATEMENT
This news release contains forward-looking statements that are based on Viking Minerals Inc.’s current expectations and estimates. For the complete “Forward-Looking Statement” please go to http://www.vikingmineralsinc.com/newsdisclaimer.html
