|To: Terry Maloney who wrote (738)||2/25/2012 6:13:35 PM|
|From: Whaspe||3 Recommendations  Read Replies (2) | Respond to of 5016|
|Terry, no worries.|
Regarding the mineral resource estimate, a NI43-101 is included in the PEA. In it they define an inferred estimate of 780 million tonnes grading at 573 parts per million for total rare earths (or 0.0573%). This part of the report was prepared by Jean-Guy Levaque, here is his bio:
I have worked as a geologist continuously since my graduation from university and I recently retired from the Lafarge Group in 2006 after a 25 year career. (With some 90,000 employees, the Lafarge Group is present in 76 countries and had a revenue in 2007 of 17.6 billion € with a net result of 1.9 billion €.) I started a chief geologist for North America at the Corporate Technical Center in Montreal, responsible for quality and reserves for 20 cement plants and 35 quarries producing some 20 million tonnes per year. I was also responsible for optimizing mining plans, mining techniques and updating rehabilitation plans. For the last four years, I fulfilled the same mandate from the International Technical Center in Lyon, France, responsible for South America, Africa, Middle East and developing projects in China and India. Previously, I had been senior hydro-geologist for Géomines Ltd working in Africa, West Indies and Canada. I was also Chief Engineer for Sidbec-Normines on the Fire Lake Project. I started my career with the Noranda Group in Murdochville as a geologist and chief geologist.
It is worth noting that the AMF was okay with him preparing the NI43-101 compliant resource estimate for all of the other elements in the deposit (aluminum, iron, magnesium...). And the fact that the rare earths are inferred and the cause for this is all laid out. I'm not an expert on this and there could be some further discussion or elaboration thereof that the AMF was looking for... so I'm waiting to see the revised report to find what it was that was the problem.
Regarding the energy requirements of the plant the PEA makes it clear that there is currently no natural gas supply in the Gaspe. Natural gas was used because of the ease in tracking its energy and mass balance for calculating the cost of the process. Remember that Orbite used pilot plants in Europe to test the acid recovery loop and the calcination of the aluminum chloride hexahydrate product into alumina. In addition, natural gas is an ideal energy source for this type of process. Although there are alternatives and the PEA spells these out:
On page 318 for example:
Orbite’s metallurgical smelter grade alumina Project is sensitive to fossil fuel prices as per all large scale chemical processes. A 25% increase in natural gas prices (baseline taken for the PEA) results in a 15.8% increase in the cost of alumina production. Under these conditions, the processing cost of all products considered goes up to $225/t for alumina and other value added products. At this time, there is no natural gas in the Gaspésie area, which has been identified/classified as reserves under the NI 51-101 Standards of Disclosure. That being said, due to the relatively high potential of supply in the area of the Project, Orbite should actively try to secure a long term natural gas supply contract for its future operation. Several other competing energy sources will have to be assessed at the Feasibility Study stage, including electrical with a biomass cogeneration plant and different fuel options, including piped natural gas biomethanisation, extraction wells, bunker C, light fuel, other solid alternative fuels (tire fluff, carpet fluff), etc.
My point is that Orbite's PEA clearly discloses these details, risks and assumptions. So it is unclear to me why the AMF would be so fussy at this stage, particularly when Orbite has made it clear that they will publish these analyses in the feasibility study. Once again, I wait for the revised PEA to help shed light on these matters.