Leigh Creek Magnesite Revisited 2010

Transcription

1 ARCHER EXPLORATION LIMITED Leigh Creek Magnesite Revisited 2010 Sept ASX : AXE

2 Disclaimer Competent persons statement The exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr. Wade Bollenhagen, Exploration Manager of Archer Exploration Limited. Mr. Bollenhagen is a Member of the Australasian Institute of Mining and Metallurgy who has more than fifteen years experience in the field of activity being reported. Mr. Bollenhagen consents to the inclusion in the report of matters based on his information in the form and context in which it appears. Forward looking statements The information in this presentation is published to inform you about Archer Exploration Limited and its activities. Some statements in this presentation regarding estimates or future events are forward looking statements. Although Archer Exploration Limited believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results and outcomes will be consistent with these forward-looking statements.

3 Background ASX Listing 14 th August 2007 ASX code AXE Exploration Base Adelaide Projects South Australia

4 Leigh Creek Magnesite Revisited Leigh Creek Magnesite History Magnesium Metal Early 21 st Century - Impact of China Post WW2 Magnesium Market Magnesium Future Archer and the Leigh Creek Magnesite Deposits Geology Leigh Creek Magnesite Resources Leigh Creek Magnesite a New Paradigm

5 Leigh Creek Magnesite History First documented magnesite mining 1947 FH Faulding small quantities mined for pharmaceutical and Chemical use ,000 t to QAL(Gladstone) for water treatment (44.7% MgO, 4.2% SiO 2, 2.4% CaO, 0.13% Al 2 O 3, 0.16% Fe 2 O 3 ) SAMAG SAMAG 1999 Resource diamond drilling at 5 Prospects Resource Estimate April 1999 AXE 2010 Declared SAMAG magnesium metal project a Major Development Licence Application

6 Magnesium Metal AMC Prospectus to raise $500m Oct 2001 AMC a Sardine trying to give birth to a Whale AMC Mothball Stanwell Magnesium Project June 2003 Dow Electrolytic Process Australian Magnesium Corporation QMAG

7 Magnesium Magnesium Metal 4 times lighter than Iron and a third lighter than Aluminium 4 C s Computers, cameras, cell phones, cars Superior strength to weight ratio. Mg is the Aluminium of the new century

8 Magnesium Last Century 1959 Convair RB-36D Peacemaker U.S.A.F. Intercontinental strategic bomber. Contained 8.6 tonnes magnesium saved 26 tonnes steel or 2.9 tonnes Al. 1970s BMW Rennsport motorcyle. Magnesium engine and magnesium gearbox castings. From 1936 Volkswagon 1965 Beetle 20 kgms/vehicle Mg Metal

9 Magnesium v s Aluminium Mg the Aluminium of the new century? Bayer Electrolytic Bauxite Process Alumina Aluminium Reduction Al atomic No rd most abundant crustal element Al Metal 30 m tonne pa Business Price approx $2,000/tonne 40,000,000 30,000,000 20,000,000 10,000,000 0 Al Production Mg atomic No rd most abundant crustal element Mg Metal 0.8 m tonne pa Business Price approx $2,800/tonne 800, ,000 WW2 400, ,000 0 Mg Production

10 Magnesium Beneficiated Magnesite >40% MgO Electrolysis Process Mg Metal First Commercial Production 1852 HCl Leach Calcium Removal Purification Filtration Boron Removal Becdancour. Canada Magnesium to Casting Cl 2 Fluid Bed Drying MgCl 2.2H 2 O Electrolytic Cells

11 KMgCl Magnesium Metal MgCO 3 Processes Electrolytic Reduction v s Thermal Reduction H 4 Mg 3 Si 2 O 9 MgCa (CO 3 ) 2

12 Other Israel EU USA Canada Russia China World Magnesium Metal Production 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other Israel EU USA Canada Russia China Before GFC Growth 10% pa Nth America Plant Closures 1999 Dow Texas 2007 Nork Hydro Quebec Timminco Ontario

13 Magnesium 2010 Thermal Reduction Quarry Dolomite 20% MgO Quarry Dolomite FeSi Gas Fired Rotary Kiln Cool Calcined Dolomite Ball Mill Grind and Mix Ferrosilicon Briquette Press Retort Furnace Retort Furnace Magnesium Crowns Refining & Casting Residue Sludge Magnesium Crowns Magnesium Ingots

14 Magnesium Future Pigeon Process? Pigeon Process Advantages Capital Cost <$500 /tonne annual production v Electrolytic Capital Cost $10,000/tonne annual production Retorts can be added progressively - incremental expansion of production Dolomite is an abundant source material Process has high tolerances suitable for developing nation. Plants are small and mobile can follow cheap energy Disadvantages Labour intensive Batch Process individual retorts typically produce < 200 kgms/batch Dolomite source material 20% MgO v s 40% MgO in Magnesite Consumes 1.08 tonnes of FeSi/tonne of Mg. Plants are currently polluters. China s dominance of production is a concern to consumers.

15 Current Mg Consumption Die Casting ( 40%) US Auto Mg Die CastingConsumption ,000 tonnes ,000 tonnes 2008 Aluminium Casting (27 %) No Substitute Al. beverage can 1.1% Mg in can body 4.5% Mg in can top Desulphurizing Steel ( 23%) Mg s affinity for Sulphur Price Sensitive

16 Magnesium in the 21 st Century Thermal reduction of MgO (from magnesite) with carbon.

17 ARCHER and the Leigh Creek Magnesite Deposit Identified SAMAG Magnesite Resource Feb 2010 License Application Feb 2010 PIRSA Offer Aug 2010 Expect Grant Sept 2010 Archer 100% owner

18 Leigh Creek Magnesite History Kms Rail Photo from Myrtle Springs Pit owned by MIL. Regional Historic Resources Area Measured Indicated Inferred MgO Pug Hill % Termination Hill % Mt Hutton % Mt Playfair % Witchelina % Source: SAMAG Project Report 1999 High quality > 42% MgO (magnesite 47% MgO) Low impurity magnesite chemical sediment Large outcropping Deposits Adjacent to existing rail link & infrastructure * Tenements are Exploration license applications

19 Magnesite Geology Resources 6 Deposits Paleoproterozoic Age Ancient Coorong 120 kms strike length Multiple Beds Vast Resource Potential

20 Magnesite Geology Hymapper at Witchelina

21 Leigh Creek Magnesite Project Pastoral Leasehold Independent Resource Estimate & audit. Baseline Environmental Study Geotechnical Study EIS for 200kpa mining Mt Hutton Pit Design Outcropping Magnesite

22 A New Paradigm For Leigh Creek Magnesite Previous work has focused on Magnesium Metal Magnesia (Mg0) market has expaned Refractories supplying the Steel Industry Expansion into building Products (MgO) Board binder for bricks Chemical applications lateritic Ni/Co Magnesia Market Advantages Lower capital cost Broad range of consumers Magnesia is a bigger market

23 Magnesite Uses 14% 23% 63% Refractory Chemical Metal Magnesium Metal Refractory MgO

24 Electrical Steel Grade MgO Magnesia CHEMICAL USES Wastewater and Water Treatment Electric Utilities Agriculture Lateritic Ni/Co Chemical Precipitation of Ni & Co from Sulphate solutions Food Grade MgO Board Pulp Bleaching Flame Retardant and Smoke Depressant

25 MgO Board MgO Board approved for construction in US 2003 Florida Mold Resistant Beijing Olympics preferred construction material - Internal & external Brick and Binding

26 Magnesite Chemically Active Fillers, fertilizers, industrial, pharmaceutical 1000 O C Caustic Calcined Magnesite 40,000 tpa Vertical Shaft Furnaces up to 2,300 o C Deadburned Magnesite 10,000 tpa Electric Arc Furnaces 2,800 3,000 o C Electrofused Magnesite

27 Caustic Calcined Magnesite CCM Deadburned Magnesite DBM Electrofused Magnesite EFM $ * $ 750* $ 1200* Critical Contaminants Critical Contaminants - CaO, SiO - Product Specific 2, Fe 2 O 3 Al 2 O 3 Critical Contaminants - CaO, SiO 2, Fe 2 O 3 Al 2 O 3 * Indicative Only

28 Product Specification 30k tonnes % MgO; 2.42% CaO; 4.21% SiO % Al 2 O 3 ; 0.16% Fe 2 O 3 MgCO3 MgCO3 For DBM and EFM SiO2 and CaO are too high. Talc Leigh Creek Magnesite Talc

29 To Meet Refractory Specifications SELECTIVE MINING Mt Hutton alone 17 Beds unique mineralogy over >4 Kms probably low SiO2 Units BENEFICIATION Flotation or heavy media NB Historic metallurgy focused on CaO removal for Mg Metal Production Pure MgCO 3

30 LCM - Order of Magnitude Study Leigh Creek Mine Crushing Plant 200KT MgCO 3 Mine 200kt Magnesite 800kt O&W Calcine Crush to 20mm remove fines $3-$5/t 200kt Crushed MgCO 3 Rail to Pt Pirie 100kt MgO Capital $30-35m. Caustic Calcined MgO Markets

31 OUTLOOK INVESTOR PRESENTATION 2010