Titanium digs for value in oil sands tailings

VANCOUVER — Titanium Corp. (TIC-V) sees an opportunity in the waste being created by the big bitumen business in northeastern Alberta. With backing from the federal and provincial governments, the Edmonton-based junior is aiming to commercialize its proprietary process that recovers valuable heavy minerals, bitumen, solvent and water from oilsands tailings.

The company’s strategy is to aim at the oilsands’ froth-treatment plant stage of the heavy oil recovery process involved in production circuits. Titanium’s solution involves a two-stage addition to a typical oilsands operation, including a hydrocarbon and water recovery plant, as well as a mineral separation plant.

Hydrocarbons and water would be removed from the waste tailings stream, creating a concentrate that would be sent to the mineral separation plant, where final products — including zircon, ilmenite and leucoxene — would be prepared for shipment from a railhead at Lynton just south of Fort McMurray. 

Titanium is focused on zircon markets because of a demand for the nesosilicate mineral that is used in chemicals, ceramics and associated refractory materials.

Along with driving profit, Titanium hopes its technology can make the oilsands process more environmentally friendly. The process would decrease carbon emissions caused by methane biogenesis in tailings ponds, lower freshwater consumption and generally decrease the environmental footprint of tailings ponds. 

According to Titanium, its process could result in an 80% reduction in volatile organic compound emissions, a 25% reduction in freshwater drawn from the Athabasca River and a 2% increase in high-quality bitumen recoveries.

“We continue to execute our technical programs successfully,
attract government support and demonstrate the economic and
environmental benefits of our patented technologies,” president and CEO Scott Nelson said during a first-quarter update. “The recent escalation of environmental concerns and market-access restrictions affect all players in the oilsands industry. We know that our technology can deliver solutions, and we are working constructively with the industry to finalize the route to commercial implementation.”

Two questions from oilsands producers in regards to Titanium’s approach are costs and return on investment. Titanium reckons that the process would cost $425 million to install at a typical large site, and carry a $420 million net present value and 22.5% internal rate of return, assuming price constraints of US$1,500 per tonne zircon and US$80 per barrel of West Texas Intermediate oil. Estimated operating expenditures would clock in at $50 million, which would result in annual after-royalty revenues of $200 million.

Titanium has garnered government support and funding since the project started. The Alberta government granted $3.5 million to the company in 2008, and the federal government followed up in 2010 with a $5-million grant from Sustainable Development Technology Canada (SDTC). Titanium also received a $1.4 million grant from SDTC in late 2012. 

In the most recent federal budget in late March, the Canadian government pledged $325 million in additional funding to SDTC.

“We commend the Canadian government and SDTC for their continued investment assisting innovative, clean technologies to reach commercialization,” Nelson says. “SDTC has been instrumental in [our] success in developing leading technology that we are commercializing.”

On May 16, Titanium hit a milestone in its patent process when it received the last of the three Canadian patents needed to secure its technology. The company also announced it had achieved 82% recoveries of residual bitumen from oilsands tailings streams and 98% of the solvents during pilot-plant testing. 

Nelson says the technology could recover “up to 7,000 barrels per day of currently wasted bitumen and solvent from individual oilsands operations.”

Research and development in the junior space is tricky to predict, but the company looks well-positioned to move forward, with $6.7 million in the bank at the beginning of March.

Titanium has benefited from the federal government’s continued commitment to SDTC. The company’s shares have jumped 65%, or 34¢, since the budget was announced in late March, and Titanium has received more support from the National Research Council of Canada. The company has 64 million shares outstanding and closed at 86¢ at press time, for a $55-million market capitalization.