Arianne to focus on high-grade phosphate

It’s been a busy month for Arianne Phosphate (DAN-V, DRRSF-O). In mid-May the Quebec-based junior officially changed its name from Arianne Resources, and announced it had sold off its non-phosphate assets to focus on its flagship open-pit phosphate project at Lac à Paul.

Arianne’s Lac à Paul project is located 200 km north of Saguenay-Lac-Saint-Jean. The area was initially explored for nickel, and phosphorous wasn’t discovered until the late 1990s, when the price of the mineral was too low for a profitable operation. The project became conceivable economically in 2008, when global demand for cereal pushed up phosphorous prices.  

Attributes of the 250 sq. km Lac à Paul property include existing road and rail infrastructure that can get the product to export markets, and hydropower from two nearby hydropower-generating stations. The Port of Saguenay is a year-round deepwater port that supports capesize vessels.

Results of recent pilot-scale testing at Lac à Paul confirmed commercial scalability of column flotation that could achieve 39% phosphate (P₂O₅) concentrate with a 90% recovery rate.

The junior explorer says the igneous deposit would yield a concentrate grade of 39% P₂O₅, which would make it one of the most sought-after phosphate concentrates in the world, in demand from high-value industrial, animal feed and food-grade phosphate product producers.

In-situ grades for phosphate deposits run anywhere from 4% to 39% P₂O₅, but not every deposit can be used in a marketable concentrate because of deleterious elements, and a marketable concentrate needs a minimum of 28% P₂O₅.

Arianne expects to complete a feasibility study on the project in the coming months. Construction is planned next year with production following in 2016.

Highlights from a prefeasibility study demonstrated that production from an open-pit could produce 3 million tonnes of 39%  P₂O₅ apatite concentrate for 17 years using a conventional truck-and-shovel, crushing, grinding and flotation operation. At an assumed concentrate price of US$175 per tonne, the operation could pay back the total capital cost of US$814 million in just under four years.

Arianne has 77 million shares outstanding, and over the last year the company has traded in a range of 80¢ to $1.42. At press time, its shares traded at $1.25.

Phosphorous — along with the nutrients nitrogen and potassium — is used in commercial fertilizer and is vital for food production. According to 2012 figures from the U.S. Geological Survey, of the world’s estimated 67 billion tonnes of phosphate rock reserves, about 50 billion are in Morocco. Other countries with more than 1 billion tonnes in phosphate rock reserves are China (3.7 billion tonnes), Algeria (2.2 billion tonnes), Syria (1.8 billion tonnes), Jordan (1.5 billion tonnes), South Africa (1.5 billion tonnes), the U.S. (1.4 billion tonnes) and Russia (1.3 billion tonnes).