PGM activity continues despite price slump.

Despite crashing prices in high-tech metals, exploration for platinum group metals (PGMs) in the Sudbury district continues unabated.

Palladium is trading at half of the level it reached earlier this year, with analysis attributing its precipitous drop to the downturn in the technology boom last year. But that has not cooled the while-hot exploration activity levels in the Sudbury district among junior mining companies committed to bringing their properties into production.

"This last little while there's been more junior mining exploration (around Sudbury) than I've seen in ten years here," says Mike Cosec, district geologist for the Ontario Geological Survey in Sudbury.

"Most of the money for exploration programs has already been allocated for the year," Cosec says. "You're looking at long-term exploration ventures. It's not something you can do on the current whims of the market on a day-to-day or month-to-month basic."

The price of palladium slumped to around the $444 US an ounce mark last month, continuing a downward trend that had seen the rice fall almost $100 over a 10-day stretch. Palladium was trading at more than $1,000 an ounce earlier this year, averaging around $1,041 in January. It is now trading at its lowest level in a year-and-a-half.

The price of platinum fell to $498 an ounce from $546 in mid-July. In January, it traded at $639.50 an ounce. It is believed that the demand for jewellery in Japan is keeping the price of platinum up.

Earlier this year, instability with PGM exports from Russia helped push both platinum and palladium prices to record highs. But a slowing economy and the use of other products instead of PGMs in the automotive, dental and electronic market have sent prices tumbling.

Of the dozen exploration companies in the Sudbury district, many of the more prominent outfits such as Mustang Minerals and Crowflight Minerals are continuing drilling on their River Valley, East Bull Lake and Agnew Lake properties within the Sudbury structure.

Mustang holds a 6,000-hectare property at East Bull Lake west of the city, and an 8,400-hectare tract at River Valley in a joint venture with Impala Platinum Holdings of South Africa.

In August the world's largest platinum producer, Anglo Platinum announced it was forging ahead with an $1.18-million exploration program at Agnew Lake, about 50 kilometres southwest of Sudbury. The investment is part of a new joint venture between Anglo's subsidiary Kaymin Resources Ltd., Pacific Northwest Capital Corp. and New Millenium Metals.

The field program currently underway includes geological mapping, prospecting, stripping and sampling, along with geo-physical survey and diamond drilling. The expenditure will take place over the remainder of this year, but the agreement will see Anglo Platinum spend about $6 million in exploration and development at the Agnew Lake property until late 2004.

"The junior companies who are very serious about their program and have done considerable work to date, they're in it for the long haul," says Cosec.