leigh creek magnesite revisited 2010 - asx · leigh creek magnesite revisited 2010 for personal use...
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ARCHER EXPLORATION
LIMITED
ASX : AXEwww.archerexploration.com.au
Leigh Creek Magnesite
Revisited 2010
Sept 2010For
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Disclaimer
Competent persons statement
The exploration results reported herein, insofar as they relate to mineralisation, are basedon information compiled by Mr. Wade Bollenhagen, Exploration Manager of ArcherExploration Limited. Mr. Bollenhagen is a Member of the Australasian Institute of Miningand Metallurgy who has more than fifteen years experience in the field of activity beingreported. Mr. Bollenhagen consents to the inclusion in the report of matters based on hisinformation in the form and context in which it appears.
Forward looking statements
The information in this presentation is published to inform you about Archer ExplorationLimited and its activities. Some statements in this presentation regarding estimates orfuture events are forward looking statements.
Although Archer Exploration Limited believes that its expectations reflected in theseforward-looking statements are reasonable, such statements involve risks anduncertainties and no assurance can be given that actual results and outcomes will beconsistent with these forward-looking statements.
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Background
ASX Listing 14th August 2007
ASX code “AXE”
Exploration Base – AdelaideProjects – South Australia
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Leigh Creek Magnesite Revisited
• Early 21st Century - Impact of China
• Post WW2 Magnesium Market
• Magnesium Future
Leigh Creek Magnesite History
Magnesium Metal
• Geology
• Leigh Creek Magnesite Resources
Archer and the Leigh Creek Magnesite Deposits
Leigh Creek Magnesite a New ParadigmFor
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Leigh Creek Magnesite History.
1914 First documented magnesite mining
1947 FH Faulding small quantities mined for
pharmaceutical and Chemical use.
1984 -85 30,000 t to QAL(Gladstone) for water
treatment (44.7% MgO, 4.2% SiO2, 2.4%
CaO, 0.13% Al2O3, 0.16% Fe2O3)
SAMAG
1997-98
Resource diamond drilling at 5 Prospects
SAMAG 1999 Resource Estimate
April 1999 Declared SAMAG magnesium metal project a
Major Development
AXE 2010 Licence Application
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AMC a Sardine trying to give birth to a Whale
AMC Mothball Stanwell Magnesium Project June 2003
Magnesium Metal 1998-2002
Australian Magnesium Corporation QMAG
AMC Prospectus to raise $500m Oct 2001 Dow Electrolytic Process
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Magnesium Metal
• 4 times lighter than Iron and a
third lighter than Aluminium
• 4 C’s Computers, cameras, cell
phones, cars
• Superior strength to weight ratio.
• Mg is the Aluminium of the new
century
Magnesium 1998-2002F
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1959 Convair RB-36D Peacemaker U.S.A.F.
Intercontinental strategic bomber.
Contained 8.6 tonnes magnesium
saved 26 tonnes steel or 2.9 tonnes Al.
1970s BMW Rennsport motorcyle.
Magnesium engine and magnesium
gearbox castings.
Magnesium
Last
Century
From 1936 Volkswagon
1965 Beetle 20 kgms/vehicle Mg Metal
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Magnesium v’s Aluminium
Bauxite Alumina Aluminium
Al atomic No 13.
3rd most abundant crustal element Al Metal 30 m tonne pa BusinessPrice approx $2,000/tonne
Mg atomic No 12.
8rd most abundant crustal element Mg Metal 0.8 m tonne pa BusinessPrice approx $2,800/tonne
Bayer Process
Electrolytic Reduction
0
200,000
400,000
600,000
800,000
1937
1941
1945
1949
1953
1957
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
0
10,000,000
20,000,000
30,000,000
40,000,000
Al Production
Mg Production
Mg the Aluminium of the new century?
WW2For
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Electrolysis Process – Mg MetalFirst Commercial Production 1852
Beneficiated Magnesite >40%
MgO
HCl Leach
Calcium Removal
Purification Filtration
Boron Removal
Fluid Bed Drying
MgCl2 .2H2O
Magnesium 1998-2002
Electrolytic Cells
Magnesium to Casting
Cl2
Becdancour . Canada
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Magnesium Metal
ProcessesElectrolytic Reductionv’s
Thermal Reduction
KMgCl
MgCO3
H4Mg3Si2O9
MgCa (CO3)2
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0
100000
200000
300000
400000
500000
600000
700000
Other
Israel
EU
USA
Canada
Russia
China
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Other
Israel
EU
USA
Canada
Russia
China
1990 – 2009WorldMagnesium Metal Production
Nth America Plant Closures1999 Dow Texas
2007 Nork Hydro Quebec
Timminco Ontario
Before GFCGrowth 10% pa
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QuarryDolomite 20%
MgO
Gas Fired Rotary Kiln
Cool CalcinedDolomite
Ball Mill Grind and Mix
Ferrosilicon
Briquette Press
Retort Furnace
Magnesium 2010 Thermal Reduction
Magnesium Crowns
Magnesium Ingots
FeSi
Residue
Refining & Casting
Sludge
Quarry Dolomite
Retort Furnace
Magnesium Crowns
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Pigeon Process Advantages• Capital Cost <$500 /tonne annual production v Electrolytic Capital
Cost $10,000/tonne annual production
• Retorts can be added progressively - incremental expansion of
production
• Dolomite is an abundant source material
• Process has high tolerances suitable for developing nation.
• Plants are small and mobile can follow cheap energy
Disadvantages• Labour intensive
• Batch Process individual retorts typically produce < 200 kgms/batch
• Dolomite source material 20% MgO v’s 40% MgO in Magnesite
• Consumes 1.08 tonnes of FeSi/tonne of Mg.
• Plants are currently polluters.
• China’s dominance of production is a concern to consumers.
Magnesium Future Pigeon Process ?F
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Die Casting ( 40%)US Auto Mg Die CastingConsumption2000 - 75,000 tonnes2008 -34,000 tonnes
Aluminium Casting (27 %)No SubstituteAl. beverage can 1.1% Mg in can body
4.5% Mg in can top2008
Current Mg Consumption
Desulphurizing Steel ( 23%)Mg’s affinity for SulphurPrice Sensitive
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Magnesium in the 21st Century
Thermal reduction of MgO (from magnesite) with carbon.
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ARCHER and the Leigh Creek Magnesite Deposit
• Identified SAMAG Magnesite Resource Feb 2010
• License Application Feb 2010
• PIRSA Offer Aug 2010
• Expect Grant Sept 2010
• Archer 100% owner
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232KmsRail
Photo from Myrtle Springs Pit owned by MIL.
* Tenements are Exploration license applications
Regional Historic “Resources”Area Measured Indicated Inferred MgO
Pug Hill 10 10 42.7%
Termination Hill 4 5 20 42.8%
Mt Hutton 18.3 42 53 42.9%
Mt Playfair 10 10 42.7%
Witchelina 23.7 94 99 40.0%
Source: SAMAG Project Report 1999
• High quality > 42% MgO (magnesite 47% MgO)
• Low impurity magnesite chemical sediment
• Large outcropping Deposits
• Adjacent to existing rail link & infrastructure
Leigh Creek Magnesite History 1998-2000
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Magnesite Geology
Resources 6 Deposits
• Paleoproterozoic Age
• Ancient “Coorong “
• 120 kms strike length
• Multiple Beds
• Vast Resource Potential
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Magnesite Geology
Hymapper at Witchelina
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Leigh Creek Magnesite Project 1998-2000Pastoral Leasehold
Mt Hutton Pit Design Outcropping Magnesite
• Independent Resource Estimate & audit.
• Baseline Environmental Study• Geotechnical Study• EIS for 200kpa mining
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A New Paradigm For Leigh Creek Magnesite
Previous work has focused on Magnesium Metal
Magnesia (Mg0) market has expaned• Refractories supplying the Steel Industry
• Expansion into building Products (MgO)• Board – binder for bricks• Chemical applications – lateritic Ni/Co
Magnesia Market Advantages• Lower capital cost• Broad range of consumers• Magnesia is a bigger market
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Magnesium Metal
Magnesite Uses
63%
23%
14%
Refractory Chemical Metal
Refractory MgO
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Electrical Steel Grade MgO
Wastewater and Water Treatment
Electric Utilities
Agriculture
Food Grade
Pulp Bleaching
Flame Retardant and Smoke Depressant
Magnesia
CHEMICAL USES
• Lateritic Ni/Co
Chemical Precipitation of
Ni & Co from Sulphate
solutions
• MgO Board
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MgO Board
• MgO Board approved for construction in US 2003 – Florida Mold Resistant• Beijing Olympics preferred construction material - Internal & external
Brick and Binding
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Caustic CalcinedMagnesite
40,000 tpaVertical Shaft Furnaces up to 2,300oC
DeadburnedMagnesite
ElectrofusedMagnesite
10,000 tpaElectric Arc Furnaces 2,800 – 3,000oC
Chemically ActiveFillers, fertilizers, industrial, pharmaceutical
Magnesite
1000OC
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DeadburnedMagnesite DBM
Caustic CalcinedMagnesite CCM
ElectrofusedMagnesite EFM
Critical Contaminants- Product Specific
Critical Contaminants- CaO, SiO2, Fe2O3
Al2O3
Critical Contaminants- CaO, SiO2, Fe2O3
Al2O3
$ 450-590* $ 750* $ 1200*
* Indicative Only
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Product SpecificationMgCO3 MgCO3
Talc
Talc
30k tonnes 1984-85
44.7% MgO; 2.42% CaO; 4.21% SiO2
0.13% Al2O3; 0.16% Fe2O3
For DBM and EFM SiO2 and CaO are too high.
Leigh Creek Magnesite
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To Meet Refractory Specifications • SELECTIVE MINING
Mt Hutton alone 17 Beds unique mineralogy over >4 Kms
probably low SiO2 Units
• BENEFICIATIONFlotation or heavy media
Pure MgCO3
NB Historic metallurgy focused on CaO removal for Mg Metal Production
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Caustic Calcined MgO
LCM - Order of Magnitude StudyLeigh Creek Mine
200KT MgCO3
Markets
200kt Crushed MgCO3
Crushing Plant
Rail to Pt Pirie
Calcine
Mine 200kt Magnesite 800kt O&WCrush to 20mm – remove fines $3-$5/t
100kt MgOCapital $30-35m.
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OUTLOOK 2010 -11
INVESTOR PRESENTATION 2010
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