Friday, October 24, 2008

Elray Resources Inc. (ELRA.OB) Makes Zircon Find in Indonesia, Joint Venture Likely to Develop Deposit

Seeing a company reach certain milestones always gives an investor a solid feeling of self worth. In many ways, explorers of old were looking for the same sort of feeling, discovering something where others thought there was none. Succeeding in this quest almost makes one’s heart swell. A solid monetary reward is always nice, but sometimes an investment in a long shot maverick company can offer the same feeling.

Elray Resources Inc., a junior mining company, works from a technical perspective to identify and develop, through joint ventures, mining opportunities in Indonesia and North America. The company is currently pursuing Zircon deposits, located in Indonesia, with a joint venture partner.

In past posts, Elray Resources was described as a junior mining company, operating with sophisticated geological techniques in relatively primitive jungle regions of Indonesia. The theory was, at the time, an investor wishing to vicariously follow their dreams of panning for riches might find the company attractive. In this particular update, the company may have found signs of a strike. The company, working with its technology, has come across a deposit of sand zircon and is currently forming a joint venture to begin developing it.

Although zircon might be more commonly associated with diamonds, it has many industrial and commercial uses that offer great potential. In 2006, world consumption of zircon was estimated at approximately 1.25 million tons with an annual growth rate estimated to be in the range of 3.8% per year. Although the world economy may affect growth to a degree, its use in LCDs, aluminum castings, ceramic glazes, abrasives, electronics and many other unique applications does appear to offer a fairly stable base of growth.

Currently, Asia holds the largest demand for the mineral (47%), but other consumer product manufacturing regions are likely to enhance zircon demand as middle-class demographics increase in developing countries. Elray Resources may not have come across a “strike it rich” moment just yet, but it has certainly risen to a new level for those wishing to invest in a company exploring the path less traveled when they cannot.

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