The company recently acquired an interest in 431 sq km of iodine properties in northern Chile as part of a joint venture with North Lily Mining (NASDAQ) of Utah, and Zurfund International (VSE) of Vancouver.
Large iodine reserves are contained in several nitrate deposits in the arid Atacoma Desert region of northern Chile. According to Kap, the demand and price for iodine have been increasing over the past two years. Chile is the world’s second largest producer of iodine, which has various uses including animal feed, pharmaceuticals, coloring and photography. Japan is the other major producer.
A prefeasibility study and engineering review is being undertaken on the company’s properties by Davy McKee of Santiago.
The joint venture hopes to be able to produce about 600 tons of crude iodine per year, resulting in an annual cash flow of $5 million, assuming an iodine price of $18,000 per ton. One estimate stated that plant construction would take about six months with a total capital cost of $5 million(US).
Shares of Kap Resources have traded at around $4.45 recently on the Vancouver Stock Exchange. About 28% of the company’s six million outstanding shares are owned by President Donald Busby.
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