DVR plans to market low cost cyanide production process

A wholly-owned subsidiary of DVR Resources (VSE) is downsizing a system first developed by Shawinigan Chemical Company (now Gulf Canada Resources) which is still used in several countries including South Africa. DVR changed its name from Death Valley Resources after it decided to get into the cyanide business.

Commercial production and sales are expected to begin in the fourth quarter, the company says. The smaller scale plant will have a capacity of 1,000 lb of cyanide per day, versus a similar capacity on an hourly basis in the past. One of the reasons the company feels the process will be attractive is that cyanide can be produced at the mine site.

Cyanide production is based on the “fluohmic process,” a versatile system that generates cyanide by using agricultural grade ammonia and a variety of hydrocarbons, including liquified natural gas, propane, and diesel. According to DVR, the production of hydrogen cyanide is “characterized by efficient yields (25% hydrogen cyanide), by the absence of noxious gases, and by a consistently high quality product.”

On-site production offers a number of benefits, the company says. It eliminates the need to transport hazardous material over public roads, the storage of sizeable cyanide stocks at the mine, and the dissolving of cyanide in solution on site.

Studies by the company indicate the modular plant will produce cyanide at a direct cost of 27 cents (US) per lb, sharply lower than today’s cost of about $1.00 per lb. The company’s objective is to capture 15% of the existing precious metal-related sodium cyanide market over the next five years. This translates into the sale of an average of 48 modular plants per year based on the established market for cyanide and another 36 plants based on anticipated growth in the market over that period.

In February, DVR’s subsidiary, Cyano Systems Inc. (CSI), secured a licensing agreement with Gulf Canada which granted CSI exclusive rights to all of Gulf’s patents, records, costings and trade secrets pertaining to its cyanide plant developed in the 1960s. In return, CSI will pay Gulf a royalty on each modular plant sold until a total of $300,000(US) has been paid.

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