www.alkane.com.au
Alkane Resources (ASX: ALK) is a multi commodity mining and exploration company focused on the Central West of New South Wales, Australia. Alkane's shares are also listed as American Depository Receipts (ADR's). The company has built a gold resource inventory of over 1 million ounces at McPhillamys near Orange in a venture with Newmont Australia.
The Company has an advanced feasibility study in progress for the development of the Dubbo Zirconia Project which is based upon a very large in-ground resource of the metals zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements.
Alkane Resources signs JV to start production at the Dubbo Zirconia Project
Alkane Resources (ASX: ALK) has now exited a trading halt after announcing a major milestone for the company's Dubbo Zirconia Project.
A Memorandum of Understanding (MoU) has been signed with a chemical company and a trading company to produce zirconium oxychloride (ZOC) from a new joint venture facility, using zirconium chemical intermediate feed from the Dubbo project.
The MOU follows extensive dialogue and testing of samples over several years, including visits by the companies to the Dubbo site and the demonstration pilot plant at ANSTO (Australian Nuclear Science and Technology Organisation) near Sydney.
A condition of the MoU is that the companies involved are kept confidential until a commercial development is finalised.
Alkane said the proposed ZOC joint venture with these companies will allow customers to become strategically independent of the zircon supply chain, and reduce reliance on China’s dominant ZOC supply position.
The facility will be developed to be able to produce 15,000 to 20,000 tonnes per annum ZOC, which will require all of the base case production zirconium output for the project of 400,000 tonne per annum of ore, or about 50% of the expanded 1 million tonne per annum development case.
The target customer base will be for the Japanese, European and North American markets, with ZOC mainly used as a high purity feed for production of other zirconium chemicals, zirconia and zirconium metal.
At current prices, the ZOC production is forecast to generate revenues of US$50 to US$70 million annually.
This would represent 12% to 17% of projected annual revenue on the 1 million tonne per annum case, with additional MOUs on other components of production currently under consideration.
The MOU on ZOC brings closer the development commitment to the DZP expected in mid-2011, with production likely later in 2013 or early 2014.
Alkane is also progressing MOUs dealing with additional zirconium chemical and zirconia production; the niobium concentrate and ferro-niobium products; and the light rare earth concentrate and heavy rare earth concentrate.
