Mediterranean’s Ecclestone sees money in antimony

Mediterranean Resources (MNR-T) is best known for advancing gold deposits in northeastern Turkey, but the junior also has its eye on the antimony market. This week it picked up two past-producing deposits of the metal in Spain and has plans to buy even more around the Mediterranean.

CEO Christopher Ecclestone says he isn’t interested in turning Mediterranean Resources into an antimony company and eventually plans to spin off all the antimony deposits his team collects in Europe, creating value for his shareholders.

Ecclestone — who is also a principal and mining strategist at Hallgarten & Co. and spent the 1990s in Argentina, where he founded the Buenos Aires Trust Co., an equity research firm — believes the stars have aligned in favour of the industrial metal.

In a telephone interview from London he emphasized that he only wants to acquire past-producing deposits that can be restored as producing mines. 

“We have zero interest in exploration because cash is king, and the only reason we bought these assets in Spain is because they were past-producers,” he explains. “The market has no tolerance for drilling at the moment and won’t fund it. So what we want to do is get this venture funded not by the market, but by off-takers. It’s a product where traders have been over the barrel for years, and they have been desperate to get alternative supplies.” 

Like the now-familiar tungsten story, he explains, China dominated the antimony market for decades, driving down prices and elbowing most non-Chinese producers out of the market. 

As a result, he says, “it’s not difficult to find past-producing antimony projects, frankly, because in the early 1980s the Chinese slammed the price and everyone shut down.”

What’s happened in more recent years, he says, is that prices have risen “because the Chinese have squandered their resources.” And it’s a good time to get into the sector because no one has done much work on developing alternative sources of supply.  

In terms of the antimony supply available outside of China, he says, there are really only two major producers: Mandalay Resources (MND-T) mines antimony at its Costerfield gold-antimony operation in Victoria, Australia; and Village Main Reef produces antimony at its Central Murchison mine in South Africa.

“About 7,000 tonnes a year comes from South Africa and another 5,000 tonnes a year from Australia, and that’s pretty much it in the Western world, although a bit comes out of Russia,” he continues. “There’s obviously a space here for a pure play antimony company.” 

Spain used to be the biggest antimony producer in Europe, he says, adding that one of his goals is to “reactivate the Spanish antimony industry.”

On June 4 Mediterranean Resources announced that it had acquired the Mina Pilar and the Mina Susana antimony deposits in Extremadura, an autonomous community in southwestern Spain bordering Portugal. They were unstaked and he acquired them from the government for a few thousand dollars. 

The Pilar mine, 6.5 km east of Herrera del Duque on the western slope of the Sierra de la Dehesa, was an open-pit mine that last operated between 1970 and 1977. Mina Susana is a small showing that was exploited in the past by underground mining, but little is known about its history. Ecclestone believes records may have been destroyed during the Spanish Civil War in the 1930s. 

The pit at the Pilar mine is flooded, and the plan is to dewater it and get it up and running. The company also wants to explore for gold around the pit.

As far as processing antimony is concerned, Ecclestone says, it is a fairly straightforward process. 

“Antimony is beautiful in the sense that, unlike rare earth elements, you just roast it after you concentrate it,” he explains. “Concentrating it is really easy too, so it’s a pretty elementary process. You build a small concentrator and you send it to Turkey for roasting. For a quarter of a million dollars you can buy or set-up a 200-tonne-per-day concentration-flotation system.”

If it turns out there is gold there as well, he says, “you do a deal with a smelter to get the gold credits back.”

When asked why no one else has thought of doing the same thing, Ecclestone responds that it’s because “they have to wrap their minds around it,” and that “there is not a lot of skill set.” With the exception of Mandalay Resources and Village Main Reef, very little has been mined outside of China for decades. Moreover, until fairly recently, prices did not offer much incentive. “A few years ago it was US$4,000 per tonne, then it went up to US$17,000 per tonne — and now it’s about US$10,000 per tonne,” he says.

What’s more, he says, demand is climbing for the metal because it has a new purpose in auto-industry plastics and wire coating. “For a long time antimony was moribund because it was only used to harden lead,” he says, “but what’s happened in recent years is that its big use is as a flame retardant.”

And as authorities in China — where one mine in Hunan province accounted for 30% of the global supply of the metal — are cracking down on small-scale antimony producers and backyard smelters, demand has only one way to go, and that’s up. 

“It’s the wonder metal,” he says, noting that grades at most antimony deposits run between 10% and 20%.

“A tonne of material grading 10% antimony would be the same as having a gold project with a grade of 21 grams gold equivalent per tonne,” he says. “That is unheard of these days.”