Words by Regina Meani.
When it was first discovered in 1863, indium was called “indigo blue” because there was a blue line in its spectrum which drew attention to its existence in zinc ores.
The metal melts at 156 degrees Celsius (°C) and boils at 2000°C. It is a soft, malleable silvery white metal and when bent produces a “tin cry.”
A sound typically made when tin and some other metals are bent, it is a type of crackling sound.
Indium is usually recovered from sphalerite, which is also known as zinc blende or black-jack, and is a zinc sulphide mineral and is commercially produced in the zinc refining process.
It is one of the earth’s least abundant minerals and there are only two notable producers of the metal in Australia, Red River Resources and Sky Metals.
Most of the metal’s consumption is as indium tin oxide (ITO) and has several applications, including as a transparent electrode in liquid crystal displays and computer and TV touch-screen (LCDs).
Windshields coated with ITO can be de-iced and de-misted, and in compounds such as indium arsenide, it is increasingly being used in semiconductors, which are mostly used in photovoltaic cells for solar energy.
Indium is also used as a low melting point alloy lead free solder and radioactive indium is used in small quantities in nuclear medical tests. Examples of this is as a radio-tracer, which highlights white blood cells and the movement of labelled proteins in the body.
During World War II, Indium was used to provide a thin film of lubrication to coat the bearings in high performance aircraft.
As the chart below highlights, the price for indium has more than doubled from its low point in January 2020.
The price has risen within a strongly rising trend channel, but when the price surged through $US230 ($313.65) spot price in August this year and broke through the $US250 barrier in September it pushed momentum into overbought.
The subsequent pause and pullback in price may continue as the metal tries to rebalance its position, but further out the indications suggest that the price has the potential to double again.
Red River Resources boasts one of the highest-grade known silver-indium deposits in Australia in the Herberton region of northern Queensland.
The company has been granted a number of tenements in the region, including the polymetallic Isabel and Orient projects. At the Orient East project, an identified alteration zone is associated with a number of higher-grade silver-indium-lead-zinc vein systems.
The share price for Red River has led a volatile path from the early 2000s, reaching a height of 67 cents in November 2007 to sink to a low point of 0.7 cents in mid-2014. From this low point the price spiralled up, pushing through resistance to halt a few months later just below 30 cents after gaining over 40 times its price.
The steepness and magnitude of the rise pushed momentum to a peak and the price entered a significant downturn which led to the price falling to support around 8 cents at the end of 2015.
From here, the price produced a triple turning point to trend higher to reach through the previous 30 cents barrier to 41 cents by February 2018.
Tumbling again, the price produced a spike reversal at 4.2 cents in March 2020 to then swiftly rise, only to be rebuffed in the 30 cents resistance zone.
The downward trend from this point was broken in mid-October 2021 and the price began consolidating its position. The oscillations may develop in the 18 cents to 28 cents range ahead of the price retesting both the 30 cents and 40 cents area resistance areas with the potential to move towards the all-time high zone.
The risk going forward would be an extension of the consolidation phase on a drop below 15 cents.
Sky Metals’ Doradilla project, located south-east of Bourke in western New South Wales, is considered prospective for polymetallic tin, copper, silver, bismuth, indium and zinc mineralisation and is part of the “DMK lIne”, the Doradilla-Midway-3KEL skarn.
Drilling by YTC Resources has confirmed the tin laterite mineralisation at the 3KEL deposit is also rich in copper, zinc, indium and bismuth.
In a similar fashion to Red River, the share price for Sky Metals has led a volatile path, which saw it peak at $3.57 in 2006 and then rollercoaster down to a multiple turning point at 2 cents between late 2105 to early 2016.
The first stage in a basing process was completed in March/April 2017 with the initial rise to 17 cents where it encountered resistance drawn from 2009 and registered overbought momentum.
The price pulled back to locate support at 4 cents in 2018 with the action serving to extend the development of the base.
When the price rose through 13 cents in February 2020 it broke away from the 13-year downward trend and completed the second stage in the base catapulting the price to 36.5 cents in the same month and then on to 43.5 cents in May of that year.
Again, the combination of resistance drawn from 2009 and this time divergent momentum saw the price halt and decline to support around 13 cents and then more recently in June this year breaking lower.
In falling to 7.7 cents in November, there are some preliminary signs that the price may have located support and a potential turning point or may indeed be close in the 7 cents area.
As we approach the end of 2021, a price move above 9 cents and followed by a confirmation move above 11 cents would indicate the potential for the stock to establish a new upward path.
Initially the price would need to overcome old resistance areas located at 13 cents and then 17 cents with higher levels at 25 cents, 35 cents and 43.5 cents. These levels may be used for trading or re-investing levels as the new path develops.
The risk to this scenario would be a failure to hold the 7-cent level with a drop towards 5 cents retuning the stock to the downward path. Such an action appears unlikely at the time of writing in November 2021.
This feature appeared in the December issue of Australian Resources & Investment.