ORT.A article in National Post........
financialpost.com
Orbite claims aluminum breakthrough
Nicolas Van Praet, Financial Post · Jul. 22, 2011 | Last Updated: Jul. 22, 2011 5:09 AM ET
MONTREAL . Richard Boudreault thinks he can dislodge a century-old technology in the aluminum business. The question is whether more investors will join him for the ride.
The founder and chief executive of Quebec junior miner Exploration Orbite VSPA has already developed a patented technology for producing alumina, the fine white powder used to make aluminum metal, by leaching it from clay. Now he says he believes that process can be used to pull alumina from traditionally used bauxite rock, giving his company a potentially vast pool of licensing revenue from bauxite refiners all around the world.
Orbite announced Thursday that it has successfully extracted alumina from samples of Guinean bauxite in repeated laboratory tests. Independent engineers with chemical process consulting firm Seneca reviewed the findings and confirmed the "strong extraction potential."
The results lead Mr. Boudreault to believe that his method could become a viable and cheaper substitute for the existing Bayer process.
"It does increase our reach enormously," Mr. Boudreault said in an interview. "The fact that it's been tested and proven and demonstrated is all good stuff. I think we're becoming a meaningful competitor to the Bayer process, even with bauxite."
To understand the significance of the statement, one has to understand that the Bayer process has for more than 100 years been the main industrial method of refining bauxite to make alumina. No one has been able to find a practical and widespread commercial replacement, much like no one has been able to match the century-old internal combustion engine powering the majority of cars on the road in terms of reliability and price.
Orbite shares closed at $3.57, up 9%, on the Toronto Venture Exchange Thursday. They've traded between 13¢ and $5.69 over the past 52 weeks.
Mr. Boudreault, a Cornell University physicist, has won the backing of several institutional investors as he steers the junior towards a potentially radical breakthrough - making aluminum's raw material on a commercial basis from clay. The company owns mineral rights to 3,500 hectares of land in the GrandeVallée area of Quebec's Gaspé region, where such clay is abundant.
Adapting its technology successfully to bauxite marks "a significant milestone," said Matt Gowing, an analyst at Mackie Research Capital Corp. "The news opens up the door for potential licensing agreements for Orbite as owners of bauxite properties should approach the company to engage in discussions to this end."
Each licence the junior is able to sell could represent $1.77 per share in pretax net present value for Orbite, Mr. Gowing estimates. He rates the shares a "speculative buy" with a target of $8.50.
Orbite's Cap Chat plant in northeast Quebec is now in the midst of a six-month test phase to assess its ability to crank out one tonne per day of metallurgical alumina. The aim is to optimize production ahead of a feasibility study planned in the second half of the fiscal year.
One of the main selling points of Orbite's processing technology is that it produces no known toxic byproducts, Mr. Boudreault said. By contrast, the Bayer process, which involves heating bauxite ore in a sodium hydroxide solution and purifying it to alumina through several physical phases, generates an iron-rich waste product known as red mud, which can't be disposed of easily.
Companies that make alumina from bauxite are spending tens of millions of dollars to research new ways to manage red mud. Concern over the environmental impact of the mud peaked last year after a sludge spill at the Ajkai Timföldgyár alumina plant in Ajka, Hungary. A piece of a reservoir dam collapsed, releasing about a million cubic metres of liquid waste that flooded nearby towns. Nine people were confirmed dead and 122 people injured.
nvanpraet@nationalpost.com |
