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Monday, June 14, 2010

All These "Resources" in Afghanistan

I saw this morning's article in the New York Times about Afghanistan purportedly having vast mineral resources http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?src=me&ref=general and I thought about it for seven hours as I drove across the Saudi Arabia of the United States, aka Wyoming. Now I am NOT a geologist, but I have lived in an extraction state for a long time. How could a dollar value be put on a resource determined largely by fly overs? Here in Wyoming, you gotta drill lots and lots of test holes and then figure out if you can get the mineral or metal out of the ground cost effectively. Just because there is lithium in a mountain playa in Afghanistan doesn't mean it can be cost effectively extracted unless it is in a slurry, as the global low cost players have in South America. Just look at all the Nevada venture lithium plays that are effectively high cost hard rock operations. Okay, the presence of China in a deal for copper tells me that they know something is in the ground over there, and it is reasonable to believe that there are other metals and minerals that typically occur near copper, so maybe that is real. All I know is to declare a value on a resource without a NI43-101 resource calculation will get you time in the SEC jail for misrepresentation. I guess that our Federal Government can make declarations just like Bre-X and get away with it. Fortunately, by the time I got home, I found this blog post of Foreign Policy. I am not alone in my skepticism on the timing and real purpose of this story. You can check it out here: http://blog.foreignpolicy.com/posts/2010/06/14/say_what_afghanistan_has_1_trillion_in_untapped_mineral_resources

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