Avanti Mining Inc. (TSX-V: AVT) is a resource company which seeks to become the pre-eminent “institutional grade” mining company focused on Molybdenum. Avanti has a 100% interest in the Kitsault Molybdenum Mine, a past producing mine located in Northern British Columbia. According to a Canadian Institute of Mining, Metallurgy and Petroleum compliant resource estimate for the mine (i) an indicated resource of 158 million tonnes of ore with an average Molybdenum grade of 0.10% was found resulting in approximately 348 million pounds of Molybdenum and (ii) an inferred resource of 133 million tonnes of ore was also found, resulting in approximately 235 million pounds of Molybdenum.
With the above-described indicated and inferred resource, Avanti is sure to benefit from an expected increase in moly prices between now and the end of the year and into 2010. Moly prices have averaged slightly more than $9/lb so far this year but according to J.P. Morgan analyst Michael Gambardella, he expects moly prices to close in on $15/lb over the next several months and to average $18/lb in 2010. Gambardella’s expectations are based on the belief that “most Western molybdenum producers have little to no inventory, leaving traders scrambling–given the recent increase in demand outside China.” Gambardella further believes that the restocking by carbon and stainless steel producers in the developed world and still-healthy demand from China should lead to the next step-up in moly prices to $20/lb in the fourth quarter of next year.