On Wednesday we introduced our new client and Featured Company, I-Minerals (IMA:TSXV). The company’s CEO is a former VP at Newmont Mining and he has help build, permit and run mines across the globe. Roughly three years ago he decided to take over the helm at I-Minerals, and help the company advance its unique Helmer-Bovill Project toward a production decision.
I-Minerals is not a grass roots play by any stretch, but it is relatively unknown in the investing world – likely because it targets a group of industrial minerals that haven’t hit the big stage in the way graphite has (also an industrial mineral).
The company is an advanced-staged development junior with two prefeasibility studies completed on its 100% owned flagship asset. This asset, known as the Helmer-Bovill Project, has seen nearly $13 million spent on exploration and development. I-Minerals currently has a market cap of roughly $18 million.
The company’s goal is to take its Helmer-Bovill Project to production. In I-Minerals’ prefeasibility technical report for the Bovill Kaolin Project (lies within the company’s flagship Helmer-Bovill Project) it was documented that the Project is a development stage open pit mining operation which will produce quartz, K-feldspar, kaolin, and once calcined (heated to about 700 °C) metakaolin, and halloysite. The detailed NI 43-101 Prefeasibility Technical Report for the Bovill Kaolin Project can be viewed by clicking here.
The key industrial minerals within the Helmer-Bovill Project are:
1. K-spar, also known as potassium feldspar: key mineral of interest for Pinnacle because the only large-scale producing mine of high quality product in North America has apparently run out of economic ore as of December 31, 2013 (read Part I on I-Minerals for details by clicking here). K-spar is used to make sinks, toilets, bathtubs, table wear, ceramic bodies and glaze, tile, technical ceramics used in the aerospace, medical and military industries.
2. Halloysite: a valuable industrial mineral. Key mineral of interest for Pinnacle with demand from technologically advanced applications, mainly in the R&D stage. An example of its uses: halloysite has been used as a petroleum cracking catalyst. Exxon has developed a cracking catalyst based on synthetic halloysite (source: http://www.chinaneolithic.com/en/Mineral/info.asp?id=250 ).
3. Quartz: high purity quartz applications potential. Used in solar glass, LCD monitors/ flat panels, specialty lighting, optics, sodium silicate, counter tops and much more.
4. Kaolin: production of metakaolin is a key material of interest for Pinnacle as it is used on bridge decks, tunnels and cooling towers. Kaolin uses are included in ceramics, paint and even toothpaste.
5. Feldspathic sand: used as filler in tile bodies, addition to concrete ready-mix, additive to asphalt and even the top dressing for golf course sands.
* Much like rare earths and graphite, K-spar and halloysite have limited high quality North American production.
Given the Helmer-Bovill Project’s multi-mineral makeup, according to I-Minerals, up to 70% of what is extracted from the Bovill Kaolin project could be saleable as industrial minerals product, leaving only 30% as waste. This is a key point given that many mines in production typically have a substantial amount of waste (dirt and other materials that aren’t used in commercial sale). Take, for example, an open pit gold mine with an average grade of 1 gram per tonne. For every one tonne of rock removed from the ground, only 1 gram is saleable material, leaving a massive amount of non-commercial product (provided there are no other by-products).
In Part I of our coverage on I-Minerals, we discussed, in detail, the budding opportunity within the high quality K-spar market – a key industrial mineral within the Helmer-Bovill Project.
Aside from two small K-spar producers, I-Minerals’ Project is the only known commercially viable high quality K-spar deposit in North America right now. And if it were to go into production, it has the potential to be the largest high quality K-spar supplier in North America.
In Part II of our coverage, the focus shifts to the opportunities within the halloysite market.
Halloysite: Not Your Typical Commodity
Simply put, halloysite is the most valuable commodity within I-Minerals’ Helmer-Bovill Project. Halloysite nanotubes can be worth as much as $3,000 per tonne. Halloysite derives its value from its tubular shape and is often referred to as a halloysite nanotube.
Not to discredit other minerals on the project, but a value of $3000 per tonne is roughly 9 times the value of high quality K-spar. Granted, the global size of the K-spar market is currently much larger than halloysite’s; but just like K-spar, there are only a few halloysite mines in the world; we found only one publicly traded company which ran a halloysite mine in North America. And just like K-spar, not all halloysites are equal. The presence of any heavy metals diminishes value as do tubes that have a comparatively “short’ length.
Applied Minerals Inc., which trades on the OTC market in the US, has established itself in the halloysite industry and recently signed an agreement with Mitsui Plastics, Inc. that grants Mitsui Plastics the right to distribute the Company’s Dragonite™ Halloysite Clay on a non-exclusive basis. Applied Minerals, from our research, owns one of the only producing halloysite mines in North America. The company states that, through its ownership of the historic Dragon Mine deposit (located in Utah), it is the premiere global source of Halloysite Clay and related technology solutions. Over the last five years, Applied Minerals’ stock price has increased roughly 500%. Its market cap now hovers around $100 million.
Much like graphite, the uses for halloysite have the potential to expand dramatically in our technologically advanced world. This makes it a speculative industry.
An issue facing end users of halloysite is that, just like graphite and k-spar, commercial halloysite deposits are quite rare.
According to the Journal of Advanced Scientific Research
“Green nanotechnology aims at developing environment safe and less harmful nano products. Halloysite clay nanotubes, nanocomposites, nano powders, etc are now emerging as trend setters in green nanotechnology. Halloysite nanotubes are eco friendly nanotubes with a lower cost than carbon nanotubes. In recent years there has been growing concern about the effect of carbon nanotubes on human health and on environment because of their potential toxic nature.”
Hundreds of patents have been filed globally which use the key material of halloysite. While many of its applications are in the R&D stage, therein lies the blue sky potential. Northstar Clay Mines LLC, one of the few North American halloysite producers – a private company – highlights some of the interesting patents filed in recent years using halloysite as a key material (you can click on each patent to learn more about it and how it uses halloysite):
Halloysite can be filled with two or more active ingredients for sequential time release applications.
Halloysite microtubule processes, structures, and compositions
When used in cosmetics, rod shaped halloysite nanotubes improve adhesion and reduce caking.
The controlled release of active ingredients from halloysite nanotubes increases safety of pharmaceuticals.
PHARMACEUTICAL COMPOSITION HAVING REDUCED ABUSE POTENTIAL
When processed, halloysite can be used to coat plastic, metal, glass and cloth.
RADIATION ABSORPTIVE COMPOSITES AND METHODS FOR PRODUCTION
Take a look at the thousands of patents filed and potential uses and applications for halloysite by visiting FPO – IP Research Communities; it is quite remarkable (click here).
Now, to be clear, halloysite’s current global market is quite small, but with so many patents and applications in the R&D stage, it has the potential to grow exponentially as it is implementable in many forms such as powders, creams, gels, lotions and sprays to name just a few. It is an extremely versatile multi-element mineral, used across various industries, with environmental and cost savings benefits. However, much like graphene, it is still in its infancy from a product development standpoint.
Imerys, the world’s leading player when it comes to industrial minerals, as you probably suspected after reading Part I of our coverage, has also established itself in the halloysite market, but its mine is in New Zealand. This creates geographical challenges if it wants to service the North American or even some European markets (given that the travel distance to transport the product could increase costs).
“Commercial deposits of halloysite is very rare…”
At I-Minerals’ Bovill Kaolin project, the same deposit with the above mentioned prefeasibility, the company received excellent halloysite testing results which were conducted by DURTEC GmbH out of Germany. DURTEC was provided with a basic halloysite product prepared by Ginn Mineral Technologies of Sandersville, Georgia using a standard wet separation technology. Key attributes of the basic halloysite product included:
- 90 % less than 2 um (microns)
- free of crystalline silica
- low levels of deleterious heavy metals
- high aspect ratio (the ratio of the length of a tube to the diameter).
Read the full detail in press release by clicking here.
After receiving excellent testing results at the Middle Ridge area of the Bovill-Kaolin deposit, I-Minerals’ President, Tom Conway, and his technical team, sought out areas with potential for increased halloysite concentrations. In 2011, the Company made an application for an additional mineral lease; and in June 2013 it received the mineral lease over what is known as Kelly’s Hump.
The company suspected that Kelly’s Hump might host another halloysite discovery…
After completing a drill program at the newly acquired land in the summer of 2013, I-Minerals received initial results from the testing of the core from the first 17 holes completed on Kelly’s Hump.
Sixteen of 17 holes intersected significant thickness of primary clay with the 17th intersecting an inclusion of country rock, masking the true thickness of the favorable lithology. Of the 16 holes that returned significant intervals of primary clay, nine returned strong concentrations of halloysite, with thicknesses ranging from 5 to 30 feet (of the total rock mass) ranging from 11% to 19%. These data show an average thickness of the halloysite-rich areas at approximately 19.7 feet with the average concentration of halloysite being 13.7%. Mr. Conway summed it up best:
“The quick success at Kelly’s Hump has been very encouraging… Not only are we seeing strong concentrations of halloysite — selectively up to three times higher than the average in the Prefeasibility Study, but the halloysite appears to be noticeably whiter than that encountered elsewhere on the property. Needless to say the results exceed all expectations.”
Click here to read the full press release.
After completing the drill program on the new discovery, just before Christmas of last year, Tom Conway, I-Minerals’ President and CEO, stated,
“The drill program was completed on time and on budget thanks to our experienced Idaho staff…We look forward to the completion of the reserve calculation and confirmation that Helmer-Bovill property hosts a unique combination of one of the largest deposits of high purity, high aspect ratio halloysite currently known, the largest high quality K-feldspar deposit in North America and abundant resources of quartz that can be readily processed into a high purity product.”
Click here to read full press release here.
The Big Picture
As mentioned in Part I, I-Minerals hired Charles River Associates out of Boston, a leading global consulting firm that offers economic, financial, and business management expertise, to conduct a study and forecast potential opportunities in the industrial minerals market (related to its deposit). Click here to read full report.
I-Minerals’ Technical Crew
From its CEO, to project manager, to its metallurgist, I-Minerals has assembled quite a technical team. You see, Hecla used to be involved in the industrial minerals business via its subsidiary, K-T Clay, which was later taken over by Imerys. Former members of Hecla are now working for I-Minerals as part of its technical team. Lamar Long, I-Minerals’ Project Manager, was previously the Exploration Manager for Hecla Mining’s Industrial Minerals division. While in that role he developed, planned and managed exploration programs for industrial minerals.
I-Minerals Metallurgical Operations Manager, Gary Nelson, also previously worked for the Hecla Corporate Office as a Senior Metallurgical Engineer with emphasis towards the industrial minerals subsidiaries. Mr. Nelson has over thirty years of diverse engineering experience at various companies with an emphasis on industrial minerals including process/project development, economic modeling, operations production supervision/management and start-up, and market development. He also spent time with Hecla at the Lucky Friday Mine in Idaho as the Environmental Manager. He is charged with the task of overseeing the completion of the ongoing feasibility study on the Helmer-Bovill property and ultimately the design and procurement of the production facility.
I-Minerals (IMA:TSXV) is a client of Pinnacle Digest’s and we own shares in the company which were purchased at $0.25, its current share price. It is noteworthy that we are biased. We don’t share in your profits or losses. Be sure to conduct your own thorough and independent due diligence as there are always risks associated with junior resource investment opportunities.
As the company progresses this winter, we will be sure to relay all developments to our members.
All the best with your investments,
RECENT HIGHLIGHTS FROM I-MINERALS
I-Minerals Sells 3,000 tons of WBL K-spar-Quartz Tailings
December 4, 2013
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