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Butterfingers

05/23/12 8:31 PM

#117538 RE: Newbie_Niobium #117533

"How are our rocks superior to other niobium projects going to market? "

Truth is they are not, there is a REE site that has 40 times the concentrations of Nemegesonda, the property will be vastly superior when it comes to mineral extraction.
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downsideup

05/24/12 1:57 PM

#117559 RE: Newbie_Niobium #117533

SRSR's rocks are superior...

Asking the question in relation to "other niobium projects" would best be addressed by direct comparisons, because each one is different. I'd still question your question though, in addressing "other niobium projects going to market"... as I haven't seen any others that appear to me to be "going to market". There are a number of other efforts out there trying to demonstrate they're potentially competitive at current prices, but none I've seen yet appear to have succeeded in the effort relative to Nemegosenda.

There are a couple of basic differentiators between one deposit and another that should be fairly obvious as the key factors being compared in "feasibility"... among many aspects focused on the basic mining risk and cost issues.

Maybe useful to present some of it as a simple set of questions to ask re Nemegosenda versus others that addresses those key issues ?

Primary feasibility issues include the geopolitical stability and "mining friendliness" of the location. If you invest half a billion dollars in development, and then the government decides they don't really want you to own or operate the mine you have already paid for ? It happens more often than you might think, and not just in the third world dictatorships. Ontario is about as low risk as you can get. Then, there's the nature of the pre-existing supporting infrastructure, including an existing pool of capacity in mining support infrastructure, qualified labor, access to power and transportation, all the things that make operating any business easier. If you already have access to skilled labor, mining equipment, water, power, roads and railroads, communications... suitable lodging and food nearby... that's obviously better than having to build and support capacity in each of those up from scratch. Again, Nemegodsenda is very well situated. Niostar won't need to build roads and railroads, housing for miners, or drive 600 miles across rugged terrain to replace a pencil.

More rock specific than "site" issues:

1. Is the deposit exposed "at or near the surface" or is it "deeper" ? What is the basic cost of generating access to the deposit ? Look at the Nebraska outfit (hundreds of feet below overburden, and below the water table) or the IAMGOLD deposit (also hundreds of feet deep)... and both are deep enough to make gaining basic access to the ore bodies a major cost issue.

2. How does the deposit compare to others in "concentration" ?

The proper answer to that isn't obtained from the highest values reported in samples or cores... and it is really a "three step" question with one part focused on "the average concentration of minerals in the ores" and another on "the local concentration OF the ores relative to non-ore containing materials" (whether in % versus depth, or in lateral disposition)... a third on "the bulk concentration of ore containing rocks relative to waste rock" with ore occurrences being either relatively uniform and contiguous or relatively variable and more widely dispersed. "Average" grade is a part of it... but so is asking how much non ore rock, in total, has to be moved and then moved again in being replaced to complete the extraction effort ? Separately from looking at the % in the concentration of minerals in the ores... there can be huge variation in the costs of moving rocks around that have no ores in them... necessary just to get to where the ores are, or to get the ores separated from non-ore rocks.

The % of minerals in the ore matters, the % of ores versus other rocks matters, and the geometry of the disposition of ores relative to other rock matters.

Good mineral grades in large masses in a monolithic deposit that minimizes the need for moving "other" rocks around... are way better than "higher" grades that require moving more waste rock just to get to them, and then more still to get the ores out.

Nemegosenda looks like its a winner in all those comparisons, with ores exposed at or near surface, that are reasonably uniform in average concentrations over large distances, laterally and at depth... meaning you can plan to dig one big hole most of which is ore... and not spend a lot of money like competitors do in moving a lot of rocks around for no benefit.

3. Then, you can extend the same "concentration" questions above to consider "secondary values"... given there are mineral values "other than niobium" ? Nemegosenda has variable secondary values in REE, uranium, perhaps a couple of other minerals... which might help offset mining costs, or might increase processing costs. Similar issues exist for each competitor. So, what do the various comparisons with competitors look like... and what do the numbers mean in terms of cost versus benefits... also considering all the other issues above ?

That's not as transparent an issue as it might seem. You have to have the niobium value (and deposit scale) issues in hand to justify development on the basis of the niobium. Deposits with "higher REE values" that some tout aren't necessarily a benefit... as they'll have to prove able to compete with other REE projects in justifying development, and that might not ever happen. Probably only two or three new REE producers flogging their REE stories now, are going to be able to justify the large future investments required in enabling them to make it to market... and those few are probably already well enough along in the process that most others likely won't happen without a far more compelling REE story than the other REE potentials have. Having "more REE's" doesn't mean you'll ever get funded to produce niobium... if the niobium story doesn't compete well with others in its own right.

4. Another big issue is related to those above re concentrations and the cost of separations... are the metallurgical issues... which are again a potential double edged sword. Having "higher values" of good things is good... while having higher values of things you don't want might increase the cost of the separations processes far beyond the point where there is a benefit available from higher concentrations paired with higher processing costs. Better to have distributions in minerals that make separations easy and cheap...

That is an site specific issue tied to the geology and mineralogy of the origin of each deposit... including a lot of variation that can occur within deposits... so it includes issues of sequencing in mining paired with separations capabilities and costs.

Having ores with fewer impurities, and with more obvious variations in physical characteristics in the distribution of mineral values, which can help facilitate basic separations, are both obvious advantages... relative to having a muddle in mineral distributions that mixes good stuff with bad stuff in ways that are harder to separate with simple processes. Again, a comparison with competitors, feature by feature, would be useful, but, there's a bottom line in terms of costs versus benefits that is what really matters.

A lot of things in the last two categories are hard to get direct information about. Competitors are tight lipped about their issues and costs. Customers are often the best source of information about "needs that aren't being met"... which can tell you a lot by working those problems backwards...

Another way to look at the problem... would be to recognize that "separations" and refinement processes are a MAJOR component of total product cost... a larger component even than the mining costs... so, you might find it useful to ask about ore features paired with processes... that would help minimize TOTAL cost ?

Nemegosenda appears to have ores that not only are better situated than competitors in terms of concentration, location and disposition, but that appear to have some unique advantages in relation to issues with secondary values, and distributions of minerals within the ores that should generate competitive benefits in relation to total processing costs.

I believe SRSR's rocks will prove to mean that they can produce a better product for LESS cost than competitors.

I think Niostar's mining costs will be lower than competitors. They have advantages in secondary values. I think their rocks also mean they'll have advantage in basic processing abilities others don't, that will also create competitive advantages in enabling "better" products at lower cost.