Suppliers News (January 29, 2007)

BioteQ heads Down Under

Another day, another treatment plant.

That seems to be the story for Vancouver-based BioteQ Environmental Technologies (BQE-V, BTQNF-O), which recently reported that it has signed a contract with Australian company Birla Mt Gordon to build a water treatment plant at the Mt Gordon copper mine in Queensland, Australia.

BioteQ has water treatment plants in Canada, the U.S., Mexico, Dominican Republic, China — and now Australia.

Mt Gordon, located near Mt. Isa in Queensland, produces copper concentrate from underground mining and conventional flotation circuits. Mine drainage from waste dumps and low-grade stockpiles contains copper, nickel, cobalt and other metals that require treatment prior to discharge into the environment.

BioteQ plans to build one of its ChemSulphide plants to recover copper, as well as nickel and cobalt. The plant will meet local discharge regulations.

The plant will be designed to treat about 2.2 billion litres of runoff per year containing roughly 1.2 million lbs. copper, 75,000 lbs. cobalt and 21,000 lbs. nickel. After the metals are recovered, the water will be discharged or recycled on-site.

BioteQ would not say how much the plant will cost, but a similar plant at the Dexing copper mine in Jiangxi province, China, cost $3.5 million. BioteQ says the Mt Gordon plant will be more akin to the one at Xstrata’s (XTA-L) Raglan copper-nickel operation in northern Quebec. That plant cost $1.6 million in 2003.

The deal in place requires BioteQ to build, own, and operate the plant in exchange for all of the revenue from the sale of recovered metals — until the capital cost of the plant is repaid. BioteQ will also get an agreed-on percentage return on its capital investment.

Once the plant is paid for, the net revenues from metal sales — gross revenue less certain costs and royalties — will be shared equally with Birla.

The plant will likely be finished in late 2007.

The Mt Gordon project will be managed by Mike Adams, a consulting metallurgist under contract with BioteQ and based in Perth, Australia.

Focused on the mining industry, BioteQ treats acid-contaminated water through the use of its patented BioSulphide and ChemSulphide processes.

AMEC to build big BC moly mine

Adanac Molybdenum (AUA-T, AUAYF-O) has hired London-based engineering firm AMEC (AMEC-L) to build a $450-million mine in B.C., near the province’s border with Alaska.

Detailed engineering and working drawings for Adanac’s Ruby Creek molybdenum project should take about 13 months to finish.

Construction will begin in mid-2007, with commissioning scheduled for late 2008 and commercial production for the first quarter of 2009.

Ruby Creek is a low-grade, bulk molybdenum deposit located 22 km northeast of Atlin, B.C.

The deposit hosts proven and probable reserves of 143.7 million tonnes grading 0.059% molybdenum, or about 187 million contained pounds.

The feasibility study reviews a projected 21-year mine life from an open-pit operation. A milling rate of 20,000 tonnes per day is expected to yield average recoveries of 89% and produce 167.4 million lbs. molybdenum. Open-pit development will employ a low modelled strip ratio of 0.95:1.

Average operating costs over the first five years are estimated at $11.61 per tonne milled (about US$5.87 per lb. of molybdenum), falling to $8.05 per tonne milled from years six through 21.

Molybdenum is added to steel for use in pipelines, aircraft, missile parts, and other specialty purposes. Adding molybdenum to steel gives it greater strength for heavy service, and in heat-resistant alloys.

Owing mostly to demand for steel in China, prices for molybdenum have increased to about US$25 per lb. at presstime from US$3 per lb. in 2000. During the past 17 months, moly has risen 350%, outpacing gold, silver and copper.

AMEC is no stranger to working in some of Canada’s most remote places. In the past 10 years, AMEC has done engineering and construction work at nearly 50 mining projects, including De Beers’ Snap Lake diamond mine in the Northwest Territories, and Teck Cominco’s (TCK.B-T, TCK-N) Red Dog gold mine in Alaska.

Of note, Adanac is an anagram for Canada.

AMEC has more than 20,000 employees worldwide.

Canadian Arrow signs SRK

SRK Consulting will complete a resource estimate for Canadian Arrow Mines’ (CRO-V) Kenbridge nickel deposit in northwestern Ontario.

Historical data from surface and underground drilling was recorded and placed in a digital database which will help SRK determine the size of a National Instrument (NI) 43-101-compliant resource.

The resource estimate will underpin a scoping study that will ultimately determine the economic viability of Kenbridge.

“Establishing an updated NI 43-101 compliant resource is the next step and, consequently, is a very high priority for the new year,” says Dean MacEachern, the company’s vice-president of exploration.

The scoping study with the resource estimate is expected to be done in the first half of 2007.

Canadian Arrow recently optioned four nickel-copper properties in northwestern Ontario, including the Chief Peter Lake, Eva Lake, Kawene and Abiwin, all situated near Atikokan, Ont., which is perhaps best known for its prolific iron mines of the 1950s.

Formed in 1974, SRK Consulting now employs more than 600 people on six continents. SRK is owned mostly by its staff.

Orica wraps up Minova deal

Explosives, paint and chemicals firm Orica has cleared all the hurdles necessary to complete the $857-million acquisition of U.K. mining chemicals provider Minova.

Minova will operate as a standalone company for two years and then it will be folded into Orica’s Mining Services division. Minova managers will report directly to Graeme Liebelt, Orica’s managing director and chief executive.

Orica said in October that the deal includes an additional $13 million in acquisition costs.

Minova supplies specialty chemical products — including resin capsules, powders and injection chemicals — for use in stabilization and ventilation systems in underground mines and other engineering projects such as tunnelling.

Its sales are mostly in Europe, the U.S. and Australia.

Orica says, however, that Minova has a foothold in high-growth markets such as Russia, Kazakhstan and China where there was an increasing focus on the efficiency and safety of underground mining.

Orica recently bought parts of Dyno Nobel’s commercial explosives business.

Orica’s Orica Mining Services unit offers commercial explosives, initiating systems and blast-based services to the mining, quarrying and construction industries.