Sense, Do you know what makes the Lerner techniques unique to processing of Nemegosenda ore?
A simple question to which I'll "bloviate" a less simple answer... because reality is complex, and thus hard to capture in the "too da moon" sophistry of clueless pumpers, or the opposite you see when the very same people are cluelessly bashing... ie, when that's the trade they're talking.
Basics first:
I'm not here talking the trade... rather than realistically addressing THE BUSINESS... which is what owners... who are investors, not traders... should do. So, note first, bashers and pumpers are both "manipulators"... intrinsically ignorant and knowingly dishonest... focused on the trade, and the share price, and the benefits of lying. Still, the mantras do persist and outlast the varying bogosities of the bashers and pumpers, including the bashers who are now pumpers:
Well managed rocks have far more value than stupid money, or badly managed money, has or can have. Not all rocks are equal in content or value... and not all money is equal in content or value. Risk results. Success in business is a function, first, of limiting the risks... not of pointlessly taking on more... as growing risk disproportionately obviates value, far more than it enables it. Success in "the trade" might well be only about deliberate manipulation of others perceptions of risks, and timing... and not about the reality of rocks or businesses at all. Only stupid people will fail to understand that... but, stupid people do stupid things, and almost everyone is stupid about something. Bottom line, still, rocks matter more than money, but, for good or for ill, management trumps geology... which has always been true, and will always be true.
As to the specific in your questions:
What we have available to us now re the separations issues is only narrow and limited information... mostly the historic data. We know a fair amount of money was spent, back in the day, with best in class experts focused on figuring it out back in the 1950's... and the answer they came up with is reported as generally "positive" in rough outline, for the time, but what we've seen done beyond that is not overly detailed in the reports. It's long been rumored that the company has "far more current information" than what's been published yet. We know from PR that they've engaged in at least three separate efforts, perhaps more, to re-address and extend the prior work... with the nature and the results of the additional work done being the subject of various rumors. And, I should point out, Dan Byrnes, in his effort bashing the company, had listed exactly that as one of the things he was aware the company had as a point of value they weren't talking about that he was going to be "more transparent" about. But, of course, that hasn't happened... at least, not yet.
Perhaps it will be addressed with more clarity in the next NI43-101 they publish... that being something to watch for, specifically. Initially the company did work that "validated" the prior work by duplicating some portion of it... while not coming out with much more than the extended "no barriers to extraction" verbiage.
Prior to and after that, the SRSR bashers appeared to be thinking they secretly held an axe over SRSR's head based on the historic work also addressing an issue (that really was an issue in the 1950's, that just isn't much of an issue now) with "small particle sizes" which "risk" they believed the company to be avoiding by not addressing that as a negative that needed to be addressed. Today, that "negative" from the 1950's looks far more like a unique source of potential and a significantly larger source of value, more than it appears to impose any issues as unique costs or risks...
Since then, they've done some additional work that we have been given no meaningful detail about... including that the rocks that were sent to China appear they were sent off and went into a black box from which they have not yet come out. Does that mean there is no result, still ? Or, does that mean the result is being used by China or those working with China, to benefit China, or others, without them bothering telling us the results they have ? Hmmm. It might also mean only that China doesn't actually have the cutting edge capacity in modern separations processes that they might need to do the lab work, or to best exploit the potential ?
In any case, the company has proceeded, now... to re-address the issue by making other efforts.
I'd caution those listening, not carefully enough, to the idiot pumpers that there's one obvious error it appears they're intent on fostering: The data from the 1950's provided cost information that applied in the 1950's, and it is obviously an error to expect that those costs that were valid then, would be exactly the same today, given 60 years of inflation for which you have to compensate. Quoting the 1950's cost info as if it is still current in 2015 dollars... is wildly dishonest. But, the practical message from the 1950's isn't wrong, while the science applied in separations has gotten far more sophisticated since then... meaning things that were limits back then aren't limits now. Stuff that wasn't economically extractable back then due to technical limits that have been obviated since then... is fairly simple to extract by known means now... but, with two new aspects to consider about that in modern context... one being the new aspects in the technical, the other being the new aspects in the economic. New methods, yes, but also new costs... and new benefits in the resulting values.
I'd also caution those listening, not carefully enough, to the idiot bashers that there's one obvious error that they've long been intent on fostering: The data from the 1950's provided technical information that applied the technical limits of the 1950's separations technology to report a reduced potential and a reduced value in the result of the process they'd developed then, only because of limits in separations tied to "small particle sizes" that weren't able to be physically separated "back in the day". That "problem" from the 1950's... just isn't a problem today... hence, "no barriers to extraction" applies today with significantly fewer technical barriers now than existed in the 1950's.
A third issue too often ignored here by the bashers/pumpsters: The PEA or other higher value 43-101 reports like those addressing "feasibility" really aren't documents that "declare a value" that matters a whit in isolation. The reports are not declarations of any fixed real mineral value or fixed points of value in themselves. The point of value that is the purpose of those documents is that they enable making proper comparisons between one potential source of value and another. The quality provided in greater resolution, or the utility in the greater "currency" of the data are only single issues... with it mattering as much or more that the big picture in the bottom line being revealed by the information available actually DOES compare more positively, versus others... whatever the advantages in resolution or currency are that the others may have.
From what's publicly available re Nemegosenda now, I'd say that of the "Lerner techniques" it isn't clearly apparent from what we have publicly available now that there is anything particularly unique about the methods. It looks like what they've addressed is all pretty straightforward in re-applying quite basic modern science in chemistry, along with new advantages made available in now existing modern technology in physical separations. But, what we care about in the end result isn't dependent on any value in the uniqueness in method, rather than in the uniqueness in specific application... as it matters in the bottom line result.
And with that focus... what matters is the uniqueness in process being a product of the entering argument... the rocks are unique, so they require a specific arrangement of particular process elements, physical and chemical, to address the features in the rocks that you have. That's equally true in addressing every other deposit... leaving the potential benefits of one versus another in any comparison largely depending on the nature of the variations in the rocks between one and another... but, also (including in a single instance) on the complexity and the cost of separations, which will ultimately depend on the nature of and the variation in the rocks within a single deposit. The rocks we consider as "a single deposit" really aren't single deposits in terms of their origins, or in terms of the resulting complexity that might exist... so the process developed for addressing the rocks in each deposit has to account for that complexity... at some cost. Less complexity might be a good thing... if it means only lower cost separations that provide higher quality products... and not fewer types of impurities, but in more difficult specifics, or much larger concentrations. More complexity might be a good thing... if it means both having lower cost separations that also provide benefits in multiple high value products. In making proper comparisons we have to look both at the variation within each deposit (and what that means both in technical terms of process requirements and the cost of extractions) and at the variations that exist between deposits... as we need to compare them.
But, a fourth issue ignored by bashers and pumpers alike, thus far... market demand for higher purity products is a bigger factor today, and the demand is rapidly growing... and that will be a vastly bigger factor in the future... while the cost of separations and purification is VASTLY LARGER as a cost element now than the costs of the mining and basic separations.
Ultimately, value depends on the chemistry of the rocks you have... and the complexity and cost of the processes the content of the rocks imposes on you. The cost of separations will depend on the combination of the physical features along with the specific chemistry in the rocks you have, and the process elements you have, both physical and chemical, that are required to produce optimal value products...
Potential advantage, or disadvantage, exists... both in unique rocks... and in unique process... in cost terms.
If, after doing some basic physical concentration and separation work, you are using acid to dissolve rocks in order to enable directly extracting high purity end products from a solution of dissolved rocks, and you know how to do that in fewer steps than others, using some bit of smarter and less expensive chemistry ? A first issue in how much acid you need, versus how much they'd need to do the same thing. Some rocks have "acid sinks" in them... so they'll take a whole lot more acid to accomplish the same thing. And, some rocks have impurities that others don't... which might be addressed only with great difficulty where they exist... generating comparative benefits where they're absent. The biggest advantages would necessarily accrue to the rocks without the impurity issues others have.
The largest cost in niobium production... isn't in the cost of basic mining and basic physical processing... it is in the total chain of all the processes required to produce higher purity end products from rocks. If your rocks (or better ideas) provide easier separations that remove impurities better... or if the rocks don't have them in the first place... that feature in the rocks may well be far more important than any advantages in mining costs. Of course, mining costs still matter... and open pit mining of minerals exposed at the surface is a really big cost advantage compared to minerals deep in the earth that can't be mined cheaply at the surface with an open pit.
What matters is the total cost... compared with the total value of the end product... with lower costs in mining and processing that result in producing higher value end products for less money being the ideal...
I know that the rock in the "doughnut" is very fine grained. Are the gangue components of the ore unique to the deposit or is it just that the fine grained nature of the ore make it suited to dissolution instead of flotation?
Already addressed in passing, above. What I'll add here is an effort to put it in context of what I wrote about it above in general terms. Fine grained, in the 1950's, meant "can't be separated physically at a cost that makes it worth doing". Today, better technology provides far better ability to do those kinds of separations... but, the cost issues today also occur in a different economic context, too. What if your basic separations do cost twice as much as your competitors... due to the need to address those fine particle sizes ? The answer is... it depends on whether or not those fine particle sizes, once they've been separated at higher cost, also provide real advantages in lowering the costs of other separations later in the process... which cost WAY more than the steps earlier in the process. The focus on total cost versus total value is what matters... not the specific variation in cost between one step or another, here or there. So, if you have a higher cost in addressing some fraction in small particle sizes early on... but they produce a vastly better product with fewer impurities that are easier to employ and cheaper to address in the later purification stages... then they're a net advantage, not a risk in larger costs. Even if you separate them out and then blend them back into a bulk product... and your total costs are still the same or less as the other guys... but, as a result, your end products are better, and have fewer impurity risks for the customers to worry about... you win.
Both "rocks" and the "process" you have matter... in providing advantages to one producer versus another.
Note, your focus should remain on cost relative to competitors... first... and benefits in relative value based on market prices second... to not fall into the trap the Molycorp P&D was based on... by focusing on margins based on pricing, in a bubble, instead of on viability of competition based in lower cost production.
Total value ultimately will depend on the pairing of the rocks with the process... at some cost, to produce some resulting value... as valued relative to others. Rocks with fewer impurities to start with, or that impose much less costly separations in the higher cost steps in the later processing stages, as seen from a total cost perspective, or that allow removing more complexity in the impurity issues early on in the physical separations... all will provide big advantages. So, two basic issues: what are the cost drivers in one set of rocks versus another (within or between deposits)... and what are the economic impacts of the mining and processing cost drivers versus the total end value produced by one set of rocks/processes versus another.
It's very complex in reality... so not able to be addressed properly in sound bites from bashers and pumpers. And, in reality, its unlikely we're going to see any of the potential entries who are seeking to develop new sources of niobium discussing this in great enough detail in public to make it transparent... as it will likely be an element of proprietary processes, or other competitive advantages (or not), that they'll need or want to keep closely held... for the obvious reasons ?
IAG spents millions (was it $30 or $60 million ?) in a hurry... to produce a completed feasibility study in about a years time, starting from scratch. They did that trying to get out in front of SRSR... hoping to get funded to re-develop and expand their existing potential. But, the end result of the work only screamed... "not nearly as good as Nemegosenda". Spending more money... doesn't in itself make your rocks better. Moving "faster"... spending more money faster... doesn't make your comparison with others any better.
Bottom line, though, here... is that smaller particle sizes that were seen as a "show stopper" in the 1950's... today, are not a show stopper... but may instead be a unique source of significant competitive advantages...
Does every niobium bearing carbonatite have it's own chemical "fingerprint" that is different from every other carbonatite or are the geological components of all carbonatites similar?
LOL!! Yes, all carbonitites are "similar"... but, the problem is that what's most "similar" about them is that they're similar mostly in nature, with that nature being one that makes them among the most wildly complex rock types you can find. Given our focus is "economic"... rather than being fascinated by the nature of their intrinsic complexity... we have to focus on the "apples to apples" comparisons that can be made between them, in a situation where no two apples are close to being the same... and thus, even the range in variation of the apples to be found on one tree shows they can vary wildly, from one to another... perhaps like one of those apple trees that has ten varieties grafted onto it. Complexity is large within a deposit... complexity is larger still between deposits...
Perhaps the rocks in the S.E. zone, or the SE II, will vary enough from those in the center of the Hawke zone that you have to consider them as separate issues ? The small particle size issue appears it comes from the "re-processing" of the niobium minerals that was due to the later intrusion of the volcanic syenite core. The syenite volcano intruded right into the already existing carbonitite... re-melting the rocks with the nioibum in them, and moving the minerals out through and into the rocks already there, redistributing it. Essentially you might look at that as mother nature performing the first steps in a purification process for you, by re-melting, moving, and re-crystalizing the existing rocks... perhaps doing some initial separations work for us in the process. The cooling that followed was more rapid than that which would tend to occur otherwise in the initial deposition... so, as a function of the movement and recrystallization you also get some portion in smaller particle sizes... side by size with larger ones. That leaves a question (today... given adequate ability to separate the particles based on size) of whether that event creates only a minor inconvenience in a need for separating some smaller particles (or a need for using processes that don't generate a need to separate them)... or a huge advantage in the features of the smaller particles, if perhaps they have some unique properties. While you may not even need to separate them out, today, in order to harvest a benefit from them, depending on your process... it might be worth while doing it anyway. In any case, it means the complexity at Nemegosenda makes it unique... some portion of the niobium contained in the rocks being the original deposits, and some portion being a later infusion of products from the melting and redistribution driven by the volcanic core... so, two particle size groups in the same rocks... where-ever the rocks were intruded by the later melted stuff that came from around the heat sources of the intrusive core.
But, I'm harping too much on the particle size issue... The rest of the answer is that yes, carbonitites vary dramatically, between and within deposits... so some deposits might have fewer impurities than others... some having none of this, but more of that, etc. Some deposits might have rocks that require a lot more acid than others will to dissolve the rocks. Others will have complexity that imposes many more process steps than others, etc. Some might have wild variations within the deposit in the distributions of impurities here versus there, that create big process risks... while others might not have those impurities at all... rather than others more or less uniformly distributed. Some impurities matter more than others both in terms of how difficult and costly they are to remove, and in terms of how much they will matter in terms of poisoning the particular processes being employed in steel production. As the steel producers seek to use longer and longer annealing times, and greater variations in and better control over temperature profiles, as a part of seeking to improve the quality of steel products... things that are impurities that didn't used to be an issue for them at all... suddenly are process limiting problems that are major issues. It is a known, in the market, that CBMM has had problems with shipping products containing impurities that made the product unusable by the customer, and that becomes increasingly true as a risk now, as they've already mined the "really good stuff" and are working now at mining lenses of lesser materials with more significant variation. My opinion is that they're having to spend quite a lot more money on separations to enable attaining the higher quality products required now, a bigger problem for them than their public discussions suggest... with the higher end in the products probably losing them a lot of money... the higher costs, for now, being subsidized by the bulk product production.
A new producer with better rocks and/or better processes... might be able to dominate the relatively small % of the market that isn't close to the biggest portion, now, but might be the highest in value and fastest growing... if they can make the highest end products for a lot less $ than others can. And, that portion of the market is "early days"... it will be more significant in the future... perhaps even only more valuable over time as demand shifts to "better" versus "bulk".
Excuse my ignorance here, sorry if I have asked this question in an awkward manner.
Not at all..
My bottom line, still, is that I don't see a better potential than Nemegosenda that exists. There are others, including some in Africa with higher niobium values, and much higher REE values... but, those tend to be pretty small in comparison with the Hawke Zone, much less the big picture at Nemegosenda... which isn't close to being fully fleshed out. I include in that "not yet fully fleshed out" that Nemegosenda, with additional exploration, is likely to prove to contain some higher values than have been discovered, yet. That appears it is the trend in others that are explored... that more effort made over time often proves up higher values, somewhere...
SRSR clearly has the better rocks... based on the cost versus value issues in a proper economic comparison. Now, if only they can FINALLY drag it across the threshold to PROVE that value... without pissing the money away drilling holes in the wrong places so that they don't count... ?
Then, there is still the issue of the increasingly obvious need to improve the management...
Whatever you think of Scott "dragging his feet" (which I'd call his timing it properly and being properly patient, not stupidly doing bad deals to benefit himself, harming us, while hurrying pointlessly) or of Dangerous Dan and those who advocate the benefit of his "ready, fire, aim" approach delivering EXACTLY the results in serial failure that you should expect of that approach: market reality is no one is going to write a check for a billion dollars... to a crew of "experts" who can't locate a hole in the ground on the first try... or the second... or the third. Proofs in performance matter. And, of course, it really will matter, if you foolishly waste the first billion... and need to raise another billion to try again in a "do over"... ?
Other than the idiots at Molycorp (some of whom are now at NioCorp)... there aren't likely to be many people in the market who will ever get that blank check for a billion dollars to piss away... And, if and when you do get it, its vastly better to NOT piss it away...
Development is a highly complex and specialized business within mining... that requires specialized expertise... meaning expertise that is proven by success and experience, a requirement that is currently lacking here.
Management trumps geology... and that's just a fact... SRSR needs operational management who've done it before... and delivered successes... not holes drilled in the wrong places. Transitions occurring, in and of themselves, aren't a good thing... unless they're properly paired with solid efforts tied to reducing the risks, not growing them... or unless they result in moving things forward without growing the risks, but reducing them... while solving the problems, not making them worse. The last year here has been a large net negative... as "ready, fire, aim" has proved an unmitigated disaster.
We should "be there" already... proofs in hand... and we're not... only because of some pretty obvious errors made by management... making the SAME errors, again, as they'd made before.
Still, the situation is not too bleak... no thanks to management... as the threshold we need to cross now, to reach the point of success in proving the things that it is necessary to prove... has fewer obstacles than ever, and those remaining have been reduced in risk significantly... in spite of the too obvious failures of "ready, fire, aim".
We're at least closer than ever now, as a dual function, first of the still extant library core having been found... and then as a function of the luck in a third party contractor "accidentally" finding real evidence of the prior grid that we had been wrongly led to believe had already been found... when it hadn't been. So, the time hasn't been totally wasted... even if it wasn't the company's own efforts, or the money, raised too dear and spent too freely on things that didn't matter, that have enabled the progress that has occurred...
There...
That should be enough to make their heads explode... |
