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Gold/Mining/Energy : A New Age In Gold Refining -- Ignore unavailable to you. Want to Upgrade?

To: Lee Bush who wrote (316)	12/15/1997 11:12:00 PM
From: Michael J. Wendell	Respond to of 672

December 15, 1997 Hello Lee Bush, May I start by addressing your last statement. You are right. Your questions do not compromise any DD company or private prospector. There fore I will begin. Question - I do recall that the large copper refiners were located in El Paso years ago. I don't know if they still are. They accepted very large copper ingots and produced pure copper, plus other metals as by-products. What you have in mind is a large-scale refiner that is suited to the processing of predominantly copper dore bars, recycling the copper back again to the mills. Yes, there are still large copper refineries operating by processing anode metals and making electrolytic copper; and some produce a small amount of gold. By far copper is their most important product. They have scale in their favor, precious metals are not the primary targets. I believe Kennecott's pit in Utah has some PGMs, not much to worry about. I assume from your post that you feel that this refinery will be profitable based upon these precious metals alone. If the average producer produces anode metal that is in excess of 1% precious metals not counting silver, we can do well. With these DD ores, the problem of making high-grade metal bullion, say copper bullion or lead bullion, above 2% risks increased losses to the mine producer. We have to scale our operation to being reasonable in our charges at below those concentrations. Remember, 1% equates to 20 pounds per ton. That is about 290 troy ounces per ton. We may wind up accepting some lower bullion grade metals than that. However, I think that with our help, most producers with DD ores will be able to make product of that grade. Could you describe the general scale of such a plant? Right now we are considering a plant capacity of 3000 pounds of metal bullion per day. Additionally we would like to be able to custom process 100 tons of ore per day to help take the risk out of the ore processing technology for DD companies. We will process the ore, show the company how to do it, and then let them built their own plant. Some will make it and some won't. Approximately what kind of return is possible to the refiner based upon these early samples of dore bars? We have only begun to do the required engineering, look at plant sites and chemical costs. We do not know where we can get the best power rates or gas costs. We know there is plenty of room for the miner and us too. At least that is true with some deposits. We wish we knew the answer to that question. Other troubling questions, how steady will the flow of feed be from the mining companies. If we sit and sit and then get over run with work just to go back to sitting, the engineered feasibility costs will not matter much. I still think we will be OK. We expect to have consistent predictable purchases and then some are coming, are coming and never come. How expensive will such a plant be and how will it be financed? Well, Stan and I know one thing for sure. We looked into our pockets and determined the cash will not come from there. The cost of the refinery without concentrate processing will be about $10 million. That will include some advance metals purchasing so start up mining companies can start shipping some metal and not be totally without cash flow. We may have some financial bankers already to advance cash on metals purchasing. However, if we advance purchase, we have interest to pay on the metals until production at the refinery begins and catches up. Are there locational constraints, i.e. will it have to be accessible by rail, as were the El Paso copper refineries? I don't know how important rail is. One truck can carry 25 tons or more. At $50,000 or more per ton, I don't think I would want my shipments wandering around on a railroad. Gas, electric power and room to grow are major considerations. Close to a transmission gas line and a power plant might be very good considerations. We have a site in mind. Will review others before finalizing a selection. What area will such a refinery serve? For starters we are looking at the South West as a vast resource of potential suppliers. We are also aware of the possible need in Montana, Wyoming, Colorado, Northern California, Oregon and Idaho. Not all of these areas will make production centers, but we can see activity in those areas. How many different kinds of ores can it process? As I mentioned, the plant will process metal bullion. Lead, copper and possibly iron. Ores with only gold may be collected in lead, gold and PGMs will likely come in copper and PGM only might produce into iron. We don't know about our taking iron yet. It is so hard to keep the silica out of the metal during smelting and silica causes trouble in refining metal bullion bars. As for the ores, we see volcanic rhyolites from Idaho, oil shale and tar sand metals zonal deposits, sediment deposits produced by salt brine transportation of micro-clusters into reductive rocks and cinder cone deposits. We are not sure about the sulfur rich deposits yet, however I am currently working with them too, but only in preliminary testing. How many small mining companies would be required to utilize such a facility to make it profitable? One good consistent producer will fit our needs. I am aware of several that could meet the criteria right now. I believe you know who they are also. Lee, your questions are very good and are the types of questions that deserved to be answered. I don't think the answers are too hard to understand for most folks. Maybe some of the terms, but I tried to be clear for most people. Certainly your questions were clear to me. Merry Christmas. mike