Updated 6 hours ago TORONTO (miningweekly.com) – A recent $10-million equity investment in alumina producer Orbite Aluminae, the second investment from a government source this year, underlined the fact that the firm had “turned a corner” from the challenges experienced last year, and was now focused on completing the first phase of its high-purity alumina (HPA) plant in Cap-Chat, Quebec, by the end of the year.
During a recent interview with Mining Weekly Online, newly installed CEO Glen Kelly pointed out that significant changes within the company had positioned it to better concentrate on reaching its goal of bringing the first phase of its 3 t/d high-grade alumina plant on line.
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“Quebec provincial government’s significant investment was based on comprehensive technical and financial due diligence. This sends a clear signal that we are now done with financing – we only have to execute on the project,” he said during the recent Prospectors and Developers of Canada’s international convention, held last week in Toronto.
Orbite in December completed a $16-million public offering, supplementing a $40-million private placement with US-based institutional investor Crede Capital Group, which brought the total cash raised to $56-million.
This excluded the most recent $10-million equity investment by province’s investment vehicle Investissement Quebec, which followed the company receiving a C$4-million non-interest-bearing repayable financial contribution from Canada Economic Development's Quebec Economic Development Programme in January.
Orbite last year fell victim to a budget blowout, lifting the capital needed to complete construction of the 3 t/d second phase of its HPA plant to about $105.9-million, up from the 2012 estimate of $85-million.
As a result, Kelly, who had previously served as executive VP and COO, said that several key positions within the company had been refreshed with new talent, including strengthening the board.
An engineering review was started in January to evaluate and order the required long-lead equipment to complete the HPA plant. Under these counted the calcinator, for which the company was in negotiation with various EU- and Japan-based suppliers. Kelly said that the company expected to award the tender this month, for commissioning in December, which should allow the project to achieve commercial production by 2015.
Kelly indicated that the budget for the remainder of the project had been conservatively adjusted following two independent engineering reviews, noting that he was confident that the company now is fully funded until it starts earning revenue early next year.
Kelly stressed that the company would now approach its initial plans to produce HPA, silica and separated rare earths in a more “prioritised” way, focusing first – and exclusively – on getting the HPA up and running, before scaling the operation up to 5 t/d, after which it would focus on rare earths extraction.
Orbite’s proprietary plant technology would produce HPA from aluminous clay, bauxite, fly ash and toxic red mud – without leaving waste – technology that is already drawing interest from companies around the globe, mainly to mitigate environmental impact of existing concerns or to remediate old dumps.
“The critical selling point for us is that by applying our technology, waste becomes revenue,” Kelly said.
Orbite owns the Grande-Vallée aluminous claystone deposit, from where its main input would come. Orbite’s plant and properties are located near the biggest aluminium smelters in America.
The company’s TSX-listed share price rocketed to a high of C$4.80 in 2011, after it announced that it had produced the first tonne of HPA using the company’s patented process that marked “an important technological quantum step forward”.
However, trouble implementing and commercialising its technology, overambitious growth plans and a budget blowout shook investor confidence in 2013, and on Thursday, the stock changed hands at C$0.36 a share.
Edited by: Creamer Media Reporter
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