Another excellent post from the past...
Er0ck
Thursday, January 21, 2010 2:57:31 AM
Re: None
Post # of 140332
So, we have all heard the strong rumors about KATX forming a joint venture with Vale Inco's Canadian arm. We already know that they bought up all the land completely surrounding our "Lucky" copper property in Dec. While that is major news in it's self, that is only the small picture. We haven't really looked at what Vale is doing in Newfoundland right now, and haven't really peaced it all together to see the big picture yet....... untill now!
While Vale has on going copper mining operations in Newfoundland, their main work is at their Voisey’s Bay processing facility. They also have a big mine here. To understand the impact Vale might have on KATX, one needs to understand what they are doing at their Voisey’s Bay facility. Heres the basic background, will explain that in more detail below.
The Voisey’s Bay development consists of three major components: an integrated mine and concentrator at the Voisey’s Bay site in Labrador that will process ore from the Voisey’s Bay deposit; a demonstration hydrometallurgical plant in Argentia to confirm the technological and commercial application of hydrometallurgical technology for Voisey's Bay concentrate; and a processing facility.
What Vale is doing at their Voisey's Bay facility is pretty amazing. I will try to break it down as best I can but it is pretty complex.
The nickel industry worldwide has traditionally smelted concentrates produced from nickel, copper and cobalt sulphide ores to make an intermediate sulphide product called matte. Hydrometallurgy has been used for refining the matte to produce high purity nickel, copper and cobalt for the market. Thus, traditionally production of these metals has occurred in two steps: smelting and refining.
Basicly this means that the nickel industry has used a 2 step process to produce high quality nickel, copper and cobalt for the market. This process involves first smelting concentrates from nickel, copper and cobalt ores to make a product called "matte". This is a low quality metal product. They then use a process called "hydrometallurgy" that is used for refining the matte and the end result is a high quality, market ready nickel, copper and cobalt.
Here is where Vale comes in with it's Voisey's Bay facility and how they are doing things differently.
The new hydrometallurgical process that Vale Inco developed will be able to process the nickel concentrate directly to metal products without first having to smelt the concentrate. It will be more economical and environmentally friendly since the sulphur dioxide and dust emissions associated with a smelter are eliminated. The process will also yield more of the valuable cobalt which is lost to a great extent in the smelting process.
So, instead of having to smelt the ore concentrate first, they can take the ore and directly process into high quality metal products such as copper. This saves time, money and produces higher yeilds.
Vale has done a extensive R & D program to prove this process to be viable. They have completelly this whole process and are now ready to build the final peace of the puzzle.
Following the completion of the R&D program, Vale Inco will construct a processing facility at Long Harbour, Newfoundland that will produce finished nickel product. Based on what we know today, this facility will cost in the order of US$2.2 billion and during operations employ about 450 people. Construction of the Long Harbour Processing Plant is expected to generate approximately 5,750 person-years of employment.Initial construction of the processing plant began in April 2009 with construction wrapping up in February 2013. At present, the Voisey's Bay development has an estimated project life of about 30 years.
So their whole plan is to use their new hydrometallurgical process that they have developed at their new Long Harbour, Newfoundland facility to produce high quality nickel, copper and cobalt over a 30 year period. Their process will allow for faster processing than the old process of smelting and then refining the ore. This is a MASSIVE project, with them spending 2.2 billion ALONE just to build the new processing facility at Long Harbour.
Obviously this facility wont be completely untill 2013. So what is going on now? Well at their Voisey facility, they are still using the old, longer 2-step process of smelting and refining the metals. This is a massive facility and it has a Airstrip and a port where it can load the processed metals directly onto ships to send to market or to other processing facilitys to further refine it. So basicly that means it's easy to ship the raw ore to this place, and easy to ship it out once it's been processed.
As Birdmanbob has pointed out tonight, the Voisey facility is currently not running right now due to a labor strike. But as of yesterday, Vale and the union are going to restart talks. They need to, and mostlikely will, reach some type of an agreement by the 31 of Jan. When this happens that means the Voisey facility will be back up and running and ready for business.
So what does this mean for KATX?
So as you can see, Vales Voisey Newfoundland processing facility is a massive, long term project. The whole project is expected to last 30 years. So that means that Vale will need a massive amount of copper ore to supply these facilitys with for quite some time. Guess what, KATX not only has one massive copper property, but 2! Thats right, both Rusty Ridge and Lucky have what appears to be massive amounts of low grade, high tonneage copper which is EXACTLY what Vale is looking for. Right now, Vale has bought up all the land around lucky, which obviously means they like what they see there. Whats important about this is, the most impressive part of this whole area isn't the part that Vale bought, but the KATX Lucky property it self. Thats right, our lucky property has by far the highest copper in the area.
So all in all it makes PERFECT sense for Vale to want to form a joint venture with KATX. Not only do we have what appears to be a massive copper reserve at Lucky, we also have Rusty Ridge, which could be as big or even bigger as Lucky. I hope this puts it all in perspective and shows everyone here the "big" picture.
Vale is not some random mining company that just happens to be looking for some more copper properties. They have a massive processing facility not far from KATX's properties and are currently building a brand new, state of the art 2.2 billion dollar refining facility right by it. This is a company that has invested billions in Newfoundland and is going to need alot of copper ore for a long time. KATX has what appears to be the perfect fit for this company right now.
While this is not any "proof" of a joint venture between Vale and KATX, it is strong supporting evidence that one might be in the works or already completed.
Hope everyone finds this useful!
AI
