FinnAust Mining plc Successful Second Stage Metallurgical Testwork Completed
FinnAust Mining plc LON:FAM the AIM and FSE listed company with projects in Greenland & Finland, has told DirectorsTalk this morning about significant advances in optimising the metallurgical processes required to produce an ilmenite concentrate from the Pituffik Titanium Project in Greenland.
· Successful test work demonstrates ability to produce a gravity-separated concentrate that compares favourably against existing hard rock sources of ilmenite.
· Highly efficient separation achieved capable of maintaining a commercially pure, high-grade concentrate.
· Expected to positively affect capital and operating requirements moving forward.
· Overall composition indicates the ilmenite should be readily soluble in sulphuric acid at high process efficiency making it suitable for all digestion process options.
· All chemical analysis shows a consistent ilmenite composition across entire Project area. Elements that could adversely impact final pigment quality, particularly whiteness and yellowness, are at least comparable to existing commercial products.
· Radioactive components and acid insoluble minerals are better than industry benchmarks for sulphate ilmenite.
· Sulphate process production of titanium dioxide is anticipated to be the key growth driver for the consumption of ilmenite ores in the coming years.
· Further optimisation of the mineral separation flowsheet is expected to achieve material suitable for the chloride slag process.
· Work continues towards determining the Pituffik resource potential maiden JORC resource expected later this year ahead of commencing bulk sampling in 2017.
FinnAust CEO Roderick McIllree said, This is a big step forward in proving the commercial viability of Pituffik; metallurgical test work has shown that by using a simple gravity step we can produce a product that compares very favourably to ilmenite produced in hard rock mines. Hard rock ilmenite projects require significant capital investment however in the case of Pituffik mechanical erosion has done all the work for us. This is expected to result in some compelling economics for the Project.
This development further strengthens our view that Pituffik represents a potential source of globally traded primary ilmenite requiring a small implementation footprint allowing for rapid development.
The resource for Pituffik is expected in the next three to four months at which point we will quantify how much material we have. This will mark a significant milestone in terms of proving the Projects potential.
The Company now intends to review the mechanics of moving to 100% ownership of Bluejay Mining Limited (and hence Pituffik) on the back of this very positive development. This is a move that is in all shareholders best interests and we look forward to keeping the market updated with our progress in due course.
Allied Mineral Laboratories was contracted to complete a sighter metallurgical investigation on a composite sample from Pituffik. The composite was processed through stages of screening, gravity and magnetic separation to isolate potential products.
Wet screening was used initially to remove the oversize (+2mm) and the slimes (<63um) from the sample, these fractions equated to 8.1 and 0.6% of the feed respectively. 99.4% of the TiO2 was retained in the sand fraction.
The sand fraction was then processed through a stage of gravity separation using a wet table to concentrate the ilmenite fraction and reject the light gangue material. Two concentrates were produced, the first developed a saleable ilmenite concentrate suitable for sulphate process and compares favourably against existing hard rock sources of ilmenite.
The two concentrate cuts were combined to form the heavy mineral concentrate and subjected to magnetic fractionation using a Carpo labora
I agree with you and was until recently an investor in some might call a competitor of Finn Aust although it was in production. That company is Sierra Rutile for whom Iluka bid £215 million plus agreed to take on its debt.
Sierra Rutile (SRX) mines rutile. It has recently invested circa £80 million in constructing a new mine called Gangama. A quantity of that amount comprises debt. It produces between 120,000 to 130,000 tonnes a year but is dependant on a large workforce, In addition the country had a civil war some years ago and more recently the country suffered from the Ebola crisis.
Yet despite the debt that SRX has, the recent Ebola crisis, past political problems for the country, Iluka has offered £215 million for the company plus agreed to take on the debt of SRX.
Rutile zircon, ilmenite prices are at the bottom of the cycle. Also resources of these sands which become titanium are in relatively short supply. Titanium itself is being used to an increasing extent in oroducts; not just paint and aeroplanes but in a growing list of products.
And so there is a growing squeeze on supply of sands, plus a gradual increase in prices for the processed product. One also has to look at the accounts of SRX over the past few years. Margins have been improved by a squeeze on production costs. With sale prices now improving SRX will move into good profit. And for all those reasons Iluka want it.
But there is a fly in the deal and is the Germans are concerned about non competition have temporarily blocked the deal for competition reasons; I think that that situation may resolve itself but be that as it may some of those invested in SRX thought the take out price was too low.
Now let us look at Finn Aust (FAM). Fools Like Us is right to refer to FAM's website; there is a wealth of information on it. It is very much worth a read including the latest market research published on Wednesday. The grades of ilmenite identified and described by the company are, subject to a formal metallurgical report, extremely high.
Comparisons. If one studies the origin and creation of the sands bearing ilmenite, it seems to me that if one removes X tons of sands each year those sands will be replenished by Mother Nature. I am hoping that the JORC compliant resourced promised by the company will give a greater insight into that phenomena. To mind that is Mother Nature creating a ready source of supply of sands.
Whilst SRX can boats 80 years worth of sands, the sands of SRX have to be mined. Mines mean expensive construction. Mines and mining require teams of employees.
What does FAM have to do in place of mining. It equals dredging and removing. Replace men with boats/ships. I would submit less employees are needed. And what is more Mother Nature has already done part of the processing job for the end product.
Two other factors need to be born in mind. Greenland is a politically stable country; and it wants, as far as I am aware, to allow sensible development of mineral extraction in the country. Secondly and I feel desperately sorry for the countries and their peoples in West Africa who suffered from the Ebola crisis. Greenland as far as I am aware does not suffer from epidemics.
So all in all, I have come to the conclusion that FAM has on many counts many advantages over a producing SRX so long as its board is successful in obtaining its EIA, SIA and exploitation licence.
I like FAM to that extent I sold my relatively large holding in SRX and invested a large part of the proceeds in FAM. Just over £30 million against £215 million plus debt. It has to be a no brainer. As ever DYOR research but one can start with the company's website.
FinnAusts Greenland site is a great prospective primary Titanium source, Found in the form of Ilmenite , it's basically iron ( magnetite) & Titanium, plus a few bits and pieces of other elements.
As shown today, this is a very pure form of ilmenite- next year it will be hopefully testing an extraction of ilmenite by dredging, no big mine to build.....
I'm convinced people are just not comprehending the opportunity here ! I don't mean to patronise
but this is going to be one of the largest amounts of Mineral sands Worldwide.
It's capable to navigate 7 or so months a year, with set up and pack up time that's going to leave
5 months of nigh on 24hrs daylight to dredge out some quite stunning grades of ilmenite.
I think I slightly exaggerated the Mcap of SRX when the share price hit 80 pence - more like £425 million at the time. Yet FAM currently has a Mcap of only £35 million with no need if the plans work for a formal costly mine. Instead there will be the cost of shipping and imo there is an argument that that cost gets built into the sale price of the ilmenite or shared with the processor; in any event it will be part of the ultimate sale price so long as the price is competitive.
Therefore we could have a competitive price per tonne with an excellent purity. My view is the stock is under priced.
I like the simplicity of extracting this high grade resource.
In comparison with Sierra Rutile which is the the midst of an agreed £215 million offer, Finn Aust does not need to construct a mine per se. Instead I can see boats or ships being hired (no need to buy them) with extraction equipment rather like a giant Dyson hoovering up the sand and then sailing off to the processor before sale. May be I am being too simple but the concept is possible.
Once the necessary permits are granted, off take agreements might follow but if there is a ready market so much the better.
Back to my comparison with Sierra Rutile (SRX), many of the pis invested in that company think that the agreed offer undervalues the company at £215 million and research of SRX will tell anyone either invested in FAM or thinking of investing that in the autumn of 2013 SRX shares traded briefly at 80 pence a share valuing the company at nigh on £500 million,
And here little ol' FAM is valued at £35 million. But please anyone reading this must DYOR.
In this game you hear all sorts of statements coming from companies, in the case of
FinnAust Mining it seems to be valid. Having taken time to read the reports made by the Danish
& Greenland Geology survey it makes you realise how big this resource is - and the highest grades are found on our Licence areas.
Over 30km x 1000m and between 5 & 27m thick
is a lot of material. This was part of an even larger area.
The grades would appear to be in the top percentile of ore in the world
- the company are proposing to use a simple dredging method to acquire the ore, which sits in
shallow water & on the beach, renewed each year as the glacier scrapes more sand into
Opposite is a large airbase, & a large Deepwater port is nearby for shipping out ore, no
expensive mine blasting and crushing rock, just Hoover up the fine sand full of Titanium rich ilmenite.
We are told the Titanium levels are high & with very little by way of deleterious elements
Waiting for the metallurgy report to fully support the statements- we would appear to own
to a very valuable asset.
We have also received the first ever offshore permit issued in Greenland to carry out this sort
of work, making Exploitation licences that are needed for extraction in 2017 that much more
Also in the annual report is news about the share based purchase .( subject to G.land approval)
Of projects in Greenland covering Zinc,Lead & Nickel/ Copper on which substantial sums had been spent by Major companies preparing for drilling extremely prospective targets.
In my opinion an excellent year for the company - with a lot more upside possible.
An extract from the Chairmans report:
Pituffik is located within the broader "Thule black sand province" in North West Greenland, comprising coastlines several hundred kilometres long that contain both ilmenite and magnetite-rich regions. These regions host localised higher concentrations of ilmenite, and it is these areas that FinnAust is targeting. The Company has focused its attention on three primary target types along more than 30km of prospective coastline, Raised, Active, and Drowned beaches. Work undertaken prior to our acquisition of the Project identified two project areas within the Pituffik tenure. Moriusaq is the most advanced and has returned the highest ilmenite grades to date, whilst Interlak offers the largest volume of heavy mineral sands with grade upside potential. Importantly, the highest-grade material from the entire region to date has been identified within FinnAust's licences.
Photogrammetry, marine bathymetry and onshore and offshore sampling was completed by the previous owners, Bluejay Mining Limited ('Bluejay'), during 2015 and initial results gave an indication that it could become one of the highest grade in situ deposit of ilmenite anywhere in the world. Shortly after the transaction we delivered the results from these campaigns which positively strengthened this belief by demonstrating that the shallow marine environment hosts very large volumes of potentially high grade titanium within shallow, extensive and thick ilmenite rich sediments extending for >30km in length and 1,000m in width. With the sedimentary horizons on average more than 5m in thickness (up to a maximum thickness of 27m), the amount of known titanium mineralisation understood by the Company to be in existence at Pituffik was multiplied significantly. Three sedimentary units were identified in total with the two shallowest sequences showing visual concentrations of ilmenite. Sampling in the "Moriusaq bay" gave us an indication of the phenomenal grade potential of this area, returning opaque fractions (magnetite and ilmenite) of up to 95% of sample with 73% of that being ilmenite. Sampling was not limited to the marine environment and on the active beaches at Moriusaq, average grades of ±40% were returned. In addition to these areas are the far more expansive uplifted beaches whi
Good to continue this run, FAM is an excellent company , surrounded by opportunity in Greenland & lets not forget Finland & Austria if and when copper picks up.
Looking forward to getting the official note on grades and of course whether Grenland is happy
to allow exploitation licenses in the near term.
One good turn etc, we have had a holding in FAM for a while & prefer to stay in the stock
- we won't starve if it falls, have a feeling that while your argument has merit , it's the work season in Greenland that keeps us in.
Like the way Western Areas supported the stock, although the asset was a related party transaction ( it was Kuenzel & a.n.other who are selling it to us!) you don't see many placings at market price, and part 1 of the tale is covered by the licences now gained.
I've been following this since early 2016, being first attracted by the high ilmenite grades at Pituffik, and with having been into Savannah Resources (SAV). SAV have a potentially huge resource of heavy sands in Mozambique, with Rio Tinto having a monster-sized resource next door. But Rio haven't progressed this; and have done a deal with David Archer of SAV such that if he can demonstrate an economic pathway forward for joint development then he gains a significant percentage of Rio's holding. Market reaction to tiny SAV, as operator, doing a deal with giant Rio, was a one-day wonder....alas I was on holiday in arctic Norway and missed a mega sell opportunity! But FAM's grades blow the Mozambique heavy sands out of the water, and it is easy to understand Rio's logic!
I'm not invested yet, but prefer to wait until the bulk sampling stage is reached in 2017, or sooner if the price drifts below 4p. This has all the makings of a winner: the management are good at just that: managing the complex administrative pathways, and hiring in real experts in their individual fields, focussed all the time on the time scale, the requirements of permitting, the end product in the market place etc. I've had enough of mining explorers which are headed by a bunch of geologists, competent people in that aspect but unable properly to build a business. This is definitely one for me for the future. At the moment I am into SOU and MARL, both having near-time potentially company-making newsflow. Second half of 2017 and into 2018 will be FAM's time for me, I hope. Though I wish I had bought at 0.5p before Christmas!!
All good, going for maiden resource statement after 2016 works.
With Sierra Rutile ( SRX) going to Iluka after a takeover offer ( subject to normal conditions)
This leaves fewer Mineral Sands projects for Titanium. This could be a very good investment
The placing so for working capital are small, and at 5p was very fair for existing shareholders
It seems, so far to be a decent company with Management aligned with shareholders, plus,
Upside can come from the Finnish & Austrian assets.
"IHC's appointment for the Pituffik project is a positive development. FinnAust and IHC would work to define an optimised development solution that includes in-house wet mining equipment and high-level cost estimation for Pituffik. IHC's good understanding and global experience in operating efficient and advanced dredging equipment in all types of environment complement FinnAust's work. Recently, the company appointed NIRAS Greenland A/S and Orbicon A/S to support the completion of various permitting and regulatory work at the Pituffik Titanium Project in Greenland. FinnAust also reported positive results from an offshore survey conducted at Pituffik. The results indicated significant titanium volumes extending over a large area, which further enhanced the potential resource base." From beaufort's note out this morning on Research Tree
"Royal IHC, the Dutch dredging company is to support FinnAust Mining on the development of the Pituffik titanium mineral sands project in Greenland. Support from Royal IHC is a major advance for FinnAust as the company is able to mobilise and supply significant resources to help FinnAust in progress towards development. The ability to ship this material with relatively simple and little processing should be a key advantage for the Pituffik project. Conclusion: FinnAust is de risking the Pituffik project in a methodical process. The support of such a large dredging company Royal IHC is a major step toward the eventual development of the project.
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