Golden Deeps (ASX: GED) shares are up 57% today. The GED share price rise is off the back of an announcement about the germanium and gallium contents of one of their ores. This is indeed all very interesting but the GED share price reaction is ludicrous, entirely silly. There is no shortage of Ge or Ga and even if there were mining either from complex ores simply wouldn't be the profitable way to get them. This is people being stampeded into being interested by the geopolitical news rather than anything sensible about mining.
Now it is true that China has just announced curbs on exports of both gallium and germanium. It's also true that China is the major source of the refined forms of both metals, even that they're a necessary part of advanced chip making (GaAs is used in mobile phone chips for example). So, yes, in the short term there's great interest in other sources of both gallium and germanium. At which point we get this press release from Golden Deeps: “Re-examination of analytical results from diamond drillhole NSBDD0081 at the Nosib project within Namibia's world-class Otavi Copper Belt has revealed significant intersections of key rare metals Gallium (Ga) and Germanium (Ge) from surface, including:
8.70m @ 128 g/t Ga, 11.3 g/t Ge (1.84% Cu, 1.88% V2O5, 10.2% Pb, 3.6 g/t Ag) from surface - Including 3.26m @ 189 g/t Ga, 14.7 g/t Ge” Well, there we have it, right? Vast profits to be made and - well, no. A reasonable valuation of these two metals here, the gallium and germanium, is nothing.
Golden Deeps share price from ASX
The reason this is all vastly overblown - even to the point of thinking that the press release is more than a little cynical - is that there's plenty of both gallium and germanium around. If we want more we can just build little extraction plants, there's no need to go mining for anything at all. Germanium can be - and is - extracted from the fly ash from coal burning electricity plants. Gallium can be extracted from a Bayer Process plant - the place that turns bauxite into alumina. There are plenty of both of those out there which do not currently have the requisite equipment. Add it and gain as much gallium and germanium as anyone could want.
That's all going to be a great deal faster than any mining operation. And it's going to happen a great deal faster than any mining operation too. Meaning that the shortage will be well over by the time anything Golden Deeps does comes to market.
One final point, the Ge levels they're claiming. We've seen fly ash with numbers 100 times that. This claim of gallium and germanium content simply isn't relevant, making the GED share price jump a nonsense.
