linmine bauxite project guyana, south america involvement in the guiana shield in 1990 1991-1992...
TRANSCRIPT
by
Norman McLeanHuman Resources Manager
Omai Gold Mines Limited
and
Vic Rozon
Project Manager
Linmine
- CONFIDENTIAL -
Linmine Bauxite Project
Guyana, South America
Omai
DoyonSleeping Giant (50%)
Niobec (50%)
PROJECTS
MINES
GROSSROSEBEL
HUAMACHUCO
CARLOTA
All amounts in US $
Cambior
Founded in 1986
Today Cambior is a gold (+550,000 oz) and niobium producer (1,550 tonnes)
All of our operations are ISO 14 001 certified
1,650 employees
Geographically diversified in two major mining camps
Canadian Shield, Quebec
Guiana Shield, South America
Total investment mines/projects to date: Cdn $1.9 billion
Listed: TSX/AMEX
First involvement in the Guiana Shield in 1990
1991-1992 Construction and pre-production of the Omai Mine $175 M
1995-1996 Omai Mill Expansion $55 M
1994-2001 Exploration Development and Feasibility Study on the Gross Rosebel Project $18 M + (Golden Star $ 16M)
Exploration/Development works in French Guiana $13 M
2000-2001 Contract mining for Linmine
Investments in the Guiana Shield
Cambior
Introduction
This study evaluates the feasibility of restructuring the
Linmine Bauxite operation, currently owned and
operated by the Government of Guyana, with the
objective of increasing the level of productivity,
efficiency and reliability as well as returning profitability
to the operation.
Linmine Bauxite Project
Operating Problems
Too large a workforce resulting in higher labour costs
High power costs and low reliability
High community expenses consisting mostly of power and water
Low availability of mine and plant equipment
Low recovery rates achieved in the plant
Dangerous working conditions especially in the plant
Dust pollution from calcination operation as well as other environmental problems.
Delays in meeting shipments and cancellation of shipments
Linmine Bauxite Project
…Operating Problems
Loss of market share
RASC sales down from 161,000 tonnes in 1997 to 62,000 tonnes in 2002
Financial losses related to high costs
Linmine Bauxite Project
Linmine Revitalization Plan
Guyana Government – Cambior Agreement
Signed June 6, 2002
New Operating Company (OBC) to be created
Ownership of OBC 70/30 (CBJ/GOG)
GOG to contribute Mineral Rights, Mining Leases and Assets (process plant, shops, etc…)
GOG to give Redundancy or Severance packages to all Linmine employees
GOG responsible for Environment Liabilities from past operations
Linmine Bauxite Project
…Linmine Revitalization Plan
Phase 1: Turnaround Phase
Conservative Plan based on Traditional Products
Refractory Grade Bauxite (RASC)
Chemical Grade Bauxite (ChGB)
Cement Grade Bauxite (CeGB)
Linmine Bauxite Project
…Linmine Revitalization Plan
Changes in Three Areas
Mine:
By changing Mining Methods and Equipment: Trucks and Shovels instead of Dragline-Bucket Wheel
Process Plant:
By investing Capital to Refurbish the Plant
Increase Recovery by Blending Material
Marketing:
By increasing Product Sales as a result of a Reliable Process Plant Operation
Linmine Bauxite Project
…Linmine Revitalization Plan
Phase 2: Expansion Phase
Establishment of new products or products that have been produced in the past such as:
Mullites
Metallurgical Grade Bauxite
Not part of this Study
Will be done with the internal cash flow
Linmine Bauxite Project
World Bauxite Production
135.7 million tonnes
• 95% used in Metallurgical Applications
• 5% used in Non-Metallurgical Applications (6.7Mt)
Metallurgical Applications
100% transformed into Alumina (99%Al2O3)
• 95% transformed into Aluminium
• 5% used in Non-Metallurgical Applications
Non-Metallurgical Applications (Bauxite)
Refractories (1.7Mt)
Abrasives (1.5Mt)
Cement (1.8Mt)
Slag Adjusters (0.6Mt)
Proppant (0.5Mt)
Bauxite Production (2000)
Linmine Bauxite Project
Refractory “A” Super Calcined Grade Bauxite (RASC)
Represents 86-89% of revenues
End markets => Steel, Glass, Aluminum, Ceramics
other non-ferrous.
Used in High Alumina Refractory bricks, and monolithics (plastics, castables, gunning)
Chemical Grade (CGB)
Represents 11-12% of revenues
End markets => Water Treatment, Sizing Agent (paper production)
Used in the Production of Aluminium Sulfate (ALUM)
Linmine’s Products
Linmine Bauxite Project
Cement Grade (CeGB)
Represents 1% of revenues
End markets => Cement and Others
Used as a source of High Alumina
…Linmine’s Products
Linmine Bauxite Project
China (export)
China (export) 700,000
China (domestic) 200,000
Brazil (export) 75,000
Brazil (domestic) 25,000
Guyana (export) 70,000
China (domestic)
Brazil (export)
Brazil (domestic)Guyana (export)
Total: 1,070,000 tonnes
Year 2002, excludes US bauxitic kaolin production
*High Alumina: Materials with an Alumina content higher than 85%
High Alumina* Refractory Production
Linmine Bauxite Project
Europe 450,000
China 200,000
USA 200,000
Japan 110,000
Others 90,000
Total: ~1,050,000 tonnes
Year 2001/2002 Estimates
Europe
China
USA
Japan Others
*High Alumina: Materials with an Alumina content higher than 85%
High Alumina* Refractory Consumption
Linmine Bauxite Project
Strong Support from Industry
Letter of Intent signed by numbers of end-users
• RHI Refractories (Austria, Chile)
• ANH Refractories (USA, Canada)
• Resco Products (USA, Canada)
• DSF Refractories (U.K.)
• Sanac & Sirma (Italy)
• Nissho Iwai (Japan)
• Tennant Limited (Australia)
• Lafarge Refractories (France)
• Magnesita (Brazil)
• St-Gobain (USA)
• Refmex (Mexico)
• General Chemical (USA)
• Plibrico (USA, Canada)
Even rival producers voiced their support
Industry Feedback
Linmine Bauxite Project
Best Quality Product Available in Market
Lower Alkali, Fe, Ti contents
Ease of Mullite Formation on Calcination
Lower Hardness and Ease of Processing
Has been Used/Known for Half a Century
Customers
Cambior’ Marketing Reputation Marketplace
Direct Relationship with Customers
Technical Support to Customers & End-users
Developments of New Products with Linmine’s Top Quality Raw Materials
Market Advantages
Linmine Bauxite Project
Mining In Montgomery Mine
Use of Trucks and Shovels with Direct Delivery of Bauxite to the Plant (no railroad)
Pit Optimization done using Operating Costs, Recoveries and Product Pricing:
TOTAL MINERAL RESERVES
Montgomery Mine
Tonnes
X1000T Al2O3% Si02%
Low Silica (0-5% Si02) 28,800 61.1 3.4
High Silica (5-10% Si02) 33,800 59.3 6.7
Total 62,600 60.1 5.2
Linmine Bauxite Project
…Geology and Resources
Mineral Inventory – Linmine and Cambior Drill Holes
Cutoffs: > 47.5% Al2O3, < 10% SiO2, < 10% Fe2O3
Resource
Category
Tonnes
(x103) Grade
%
TAl2O3
%
TSiO2
%
Fe2O3 % TiO2
Measured 7,384 59.95 5.99 1.08 2.28
Indicated 59,756 60.07 5.22 1.36 2.28
Total (Meas + Ind) 67,140 60.06 5.30 1.33 2.28
Inferred 771 61.36 2.32 2.17 2.30
Linmine Bauxite ProjectLinmine Bauxite Project
…Mining Pit Design completed for East & North Montgomery
MINERAL RESERVES
Montgomery MineTonnes
X 1,000
Al2O3
%
Si02
%
East Montgomery
Low Silica (0-5%) 370 60.9 4.2
High Silica (5-10%) 954 60.0 6.5
Sub-Total 1,324 60.3 5.8
North Montgomery
Low Silica (0-5%) 14,698 60.4 3.0
High Silica (5-10%) 5,009 59.3 6.7
Sub-Total 19,707 60.1 3.9
Montgomery Pits
Low Silica (0-5% Si02) 15,068 60.4 3.0
High Silica (5-10% Si02) 5,963 59.4 6.6
Total 21,031 60.1 4.0
Linmine Bauxite Project
…Mining Combined Reserve will provide Plant Feed for 30 Years
Mining will start in East Montgomery and progress to North Montgomery following the Dewatering of Dorabece Lake
11KM Road Mine-to-Plant to be built using material from the mining area
Overall Strip Ratio of 4.3 BCM/t for the First 15 Years
Linmine Bauxite Project
Processing facility designed to produce the calcined and dried products forecasted in sales plan:
RASC, ChGB, CeGB
Extensive Metallurgical testwork conducted in the past be various parties and by Cambior in 2002 to confirm:
High quality of refractory grade calcined bauxite
Wash plant and kiln recoveries
Future operating strategy with 50% washed and 50% unwashed material fed to the kiln
Processing
Linmine Bauxite Project
Ore Preparation
New Delivery System
New Crusher and Wash Plant
Raw Product Storage
Two Storage Areas Designed to Produce Blended Piles
New Conveyors and Mobile Hopper
Kiln 14
Totally Refurbished: Gear, Pinion, Dust Collector, etc…
New Instrumentation
90% Availability Expected
Throughput: 27.3 Tonnes per Hour of Product
Process Plant Modification
Linmine Bauxite Project
Kiln 13
Minimum Amount of Refurbishing
Will be used on an Intermittent Basis
90% Availability Expected
Throughput: 27.3 Tonnes per Hour of Product
Dryer Feed & Storage
New Feed System
…Process Plant Modification
Linmine Bauxite Project
ENVIROMENTAL IMPACT
ASSESSMENT
By Senes Consultants – Toronto Canada
Based on:
1993 EIA by Rescan
2002 Environmental Review by Adam Smith Institute
2002 Tailings Report by Golder Associates
Recent soil, water quality and waste sampling by Cambior
Linmine Bauxite Project
Environmental improvement for all acquired components
application of proven remedial technology
reasonable time for implementation (up to 2 years)
Implementation of Environmental Management Plan
Meets international performance standards
Plan and close out acquired components
Seek ISO 14001 Certification within two years
Omai Bauxite Commitments
Linmine Bauxite Project
Already exists but required to be upgraded in:
Port Infrastructures
Laboratory
Fuel Storage and Handling
Substation & Electrical Rooms
Communications
Administration Buildings
Infrastructure
Linmine Bauxite Project
Investment
Linmine Bauxite Project
Capital Expenditures (US $000)
Mining
Electrical & Comm.
Infrastructures
Processing
Tailings & Water Mgmt
Admin. & Services
Indirects
Contingency (10%)
5,382
1,359
1,943
12,412
948
270
3,560
2,700
Total 28,574
Working Capital 4,921
Feasibility Study & Financing
Total Investment
1,667
35,162
Linmine Bauxite Project
Conclusion Restructuring of the Linmine Operation is Economically
Feasible
Base Case meets Cambior’s Financial Criteria
Base Case:
Know Products: Principal being RASC
Reserves/Resources: For Over 50 Years
Mining and Process: Low Risk
Further Improvements Possible: Cheaper Fuel, Process Control
Second Phase:
New Products from the same Resource Base