Argex Silver Aims for
www.argex.ca
Titanium and Vanadium
Michael Dehn
President & CEO
Few Capital Pool Companies (CPCs) hit
the ground running like Argex Silver
has done since acquiring 100% of the
La Blache Titanium-Vanadium Project
in mining friendly Quebec. Tied to this
is a proprietary metallurgical process
for extracting titanium, vanadium and
iron which will first be utilized in a
small-scale pilot plant processing facility
which Argex’s team is building prior
to commercial production. This plant
should be operation by this year-end
and if it proves out as expected, Argex
could be well on its way to becoming
the lowest cost titanium and vanadium
producer in the world, producing a high
quality end product. More than that,
after gearing up production, Argex be-
lieves that it could ultimately produce as
much as 30% of the world’s annual out-
put of titanium. Michael Dehn, Argex’s
newly appointed President and CEO will
fill us in on the details of his exciting
young company.
R
esource Intelligence: Argex certainly appears
to have the potential to become quite a big
player on a large market which few invest-
ors know anything about. Can you tell us how
your small start-up got here in the first place?
Michael Dehn: Argex Silver Capital Inc. was origin-
ally a CPC which entered into an agreement in
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514.788.8923
principle on November 10, 2008 to acquire all of nonmagnetic, nontoxic, biocompatible, possesses
the assets of 7013833 Canada Corp which con- good heat transfer properties and is resistance to
sisted of a group of 18 claims totalling approxi- acids, making it and its alloys useful in a wide
mately 995 ha (9.95 km2) in area with showings range of chemical, structural, petrochemical,
of iron ore, titanium and vanadium within the marine and biomaterial applications.
vicinity of the Lac La Blache area on the North
Shore of the Province of Quebec. Lac La Blache Vanadium is used as an alloy with iron to make
is situated approximately 125 km northwest of carbon steel, high-strength low-alloy steel, full-
the town of Baie- alloy steel, and tool steel.
Comeau. Also in- Auto and machinery
cluded in the deal “We believe that Argex manufacturers
nized the
recog-
toughness and
was a group of 185
claims in total- is in a pretty unique po- fatigue resistance of van-
adium alloys as far back
ling approximately
9,845 ha (98.45
sition to capitalize on a as the early 1900’s and
km2) approximately market where there is began to incorporate it
350 km north of in alloys used in axles,
Baie-Comeau on little competition.” crankshafts, gears, and
the North Shore of other critical compon-
~President & CEO Michael Dehn ents. It’s also used with
Quebec and gener-
ally referred to as the aluminum to provide
“Hanna Mining”, the required strength
“Consolidated Morrison” and “Fortin” Proper- in titanium alloys used in jet engines and high-
ties. The transaction was completed on Oct. 30, speed airframes. In an October 2008 article, Dis-
cover Magazine called vanadium “The element
2009.
that could change the world.” It could play a key
RI: So what made these claims so attractive as a role in helping to make renewable energy truly
qualifying transaction? successful because it can be used to make highly
powerful and efficient batteries which have po-
MD: Well, La Blache has an historic (non NI 43-
tential uses in large scale power grids. When
101 compliant) 78M tonne resource with grades
combined in lithium-ion batteries, vanadium has
of 20.5% titanium dioxide, 48% iron ore, and
also been shown to be effective in significantly
0.36% vanadium that was first discovered in
improving their performance. So we may also see
1952 and subsequently explored by Bersimis
vanadium in the next generation of hybrid car
Mining Company, a subsidiary of Price Pulp and
batteries.
Paper. At that time the metallurgy required to
process the ore would have been too complicated
for the technology then available, so the deposit
just sat there. Times have changed, and now
we have a very economic deposit which can be
mined and processed with new technology which
is available today.
RI: Most investors are probably not that familiar
with the uses of titanium and vanadium. Can
you give us a little background on these metals?
MD: Certainly. Few people realize the fact that
there is more titanium in the earth’s crust than
there is nickel, zinc, chromium, tin, lead, mer-
cury, and manganese combined! The key dif-
ference is that these metals are concentrated in
large, easily mined ore bodies, while titanium
ores are widely dispersed throughout the earth’s
crust. Only about five percent of the titanium
mined today is actually used in its pure metal
form while the other 95% is used to manufac-
ture titanium dioxide (TiO2), an ingredient in
paper, paint, plastics and white food coloring.
Titanium weighs 40% less than carbon steels and
can be strengthened through alloying with met-
als such as aluminum and vanadium. Titanium is
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Argex Silver
- Continued
RI: Tell us a little about the processing technology
that you now have available to make your deposit
economic at this time.
MD: As I said earlier, until recently, there was no
economic way to extract the metals from our de-
posit. We believe that the process we intend to
use could be as revolutionary for our industry as
heap leaching was for gold mining.
Metallurgists propose a closed-loop process con-
sisting of HCI (for the initial leaching step),
which is regenerated and returned to leach fresh
ore and a brine matrix (which is inert through-
out) and is also recycled to the leaching step. Ti-
tanium is removed through a hydrolysis process
followed by a screening process which produces
the final TiO2. The recuperation rates obtained
from initial testing indicates that we should be
able to extract between 90% and 95% of the ti-
tanium with a purity of 96% to 97% in the final
product. Iron, in the form of hematite, with a
purity of 66% to 70% is produced by a hydroly-
sis process on material coming out after the titan-
ium hydrolysis process. The initial tests indicate
that we should be able to recover between 95%
and 99% of the iron. The proposed process has
no emissions of greenhouse gases or toxic resi-
dues and high-value end products are created
directly from the process.
Free Revolutionary Online Investment Calculators and all 43-101 data with sources and project values www.resourceintelligence.net
RI: So where do you go from here?
MD: We are in the process of drilling now at La
Blache in order to expand the historic tonnage
there and bring it compliant to NI 43-101 stan-
dards. The previous drilling was only done to a
depth of 20m so this should not be difficult to
accomplish. Because the deposit is massive and
close to the surface we expect to be able to eas-
ily double the historic tonnage by simply drill-
ing to 40m. That, of course, remains to be seen
but there doesn’t appear to be any reason why it
won’t. We plan to drill several holes to between
150m and 250m. If we are still in economic ma-
terial at that point, who knows how much ton-
nage we may have. Concurrent with this we ex-
pect to complete a small-scale processing facility
by the end of the year where we can demonstrate
the effectiveness of the metal extraction technol-
ogy.
RI: What kind of capital requirements are you go-
ing to have in order to get into production?
MD: Our initial pilot plant is expected to cost in
the area of $100 million. The beauty of our busi-
ness model is that these will be modular in na-
ture so we can increase capacity by simply adding
more units until we have a planned 10 of these in
operation. That will also give us the ability to do
Non-exhibitor
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514.788.8923
routine maintenance or handle production prob-
lems on one plant at a time without have to shut
down the whole operation.
RI: $100 million is quite a chunk of money for a
pilot plant. So ten of these will cost you $1 bil-
lion? How are you going to finance that?
MD: Based on the investigations we’ve made and
discussions we’ve had, it appears that we should
be able to secure debt financing for virtually all of
the capital required to get into production. We
also expect to be self-financing through cash flow
fairly quickly after we begin production. We have
$4 million in the bank and will need another $5
million in equity capital this year but that is al-
ready in place through the 20 million warrants
we have out which we expect to be exercised at
$0.40. Once our stock trades above $0.60 for 20
consecutive days we can force the exercise of the
warrants.
RI: Can you summarize for investors why you
think they should take an interest in Argex?
MD: Certainly. We believe that Argex is in a pretty
unique position to capitalize on a market where
there is little competition and where we have the
opportunity to establish ourselves as one of the
major producers in the world at perhaps the low-
est production cost in the world. If we are able
to do that within our expected timeframe and
budget, we should have a very happy group of
shareholders.
Milestones
• Increase our 43-101 compliant
resource, hopefully to the 150
million tonne range
• Commission a mini-plant to test
out the extraction technology
on a small scale
• Start scoping studies - one for
the technology and one for
mining operations
• Start a pilot plant in 2011
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