|
Here is a copy of news release out today:
WhiteGold Resources Corp.
WGO VSE Add to PortfolioFebruary 10, 1998
George Hawley Report Defines ISK Wollastonite Projected Prices
WHITEGOLD RESOURCE CORP. ("WGO-V")
- George Hawley Report Defines ISK Wollastonite Projected Prices
Brian A. Lueck, P.Geo. & President of Whitegold Resource Corp. (the
"Company") , is pleased to announce that George C. Hawley, an industrial
minerals marketing expert, has completed an independent study titled
'Wollastonite in Plastic: A Bright New Millennium for Wollastonite from
Iskut'. Mr. Hawley is a world authority on applications of industrial
minerals in the coatings, building materials, and plastic reinforcement
industries and has published a number of technical papers on the use of
industrial minerals in plastics. Mr. hawley pioneered the use of mica in
the plastics industry during his time working for Suzorite Mica
Products, and is responsible for establishing some of the terminology
currently being used in the mineral filler industries.
The aims of this study were to investigate the global and regional
plastics markets and to determine the size and niche of the market that
ISK Wollastonite would be able to target. The study is supported by
results from ISK wollastonite-filler nylon testing that has been
conducted by Suzonite Mica Products, a division of Zemex Corporation,
under the supervision of George Hawley, during the fourth quarter of
1997.
The main usage of wollastonite in the plastics industry is in the
production of nylon and polyurethane compounds used in injection moulded
automotive parts. Nylon is the preferred engineering thermoplastic for
automotive use, with growth rates estimated as high as 37.6% per annum.
Based on projections by NYCO and Kline, wollastonite usage in plastics
is estimated to reach 100,000 tons in North America in the year 2000.
Consumption in the rest of the world is likely to reach 90,000 tons,
mainly in Western Europe, Japan, and other Asian automobile producing
countries. Growth rates of this market have been forecasted up to 10%
per year and have been consistently met.
The objectives of the nylon testing program were to compare the
reinforcing characteristics of experimental ISK wollastonite products
with other commercial wollastonite, and to evaluate the effects of
milling parameters developed by the Company thus far on reinforcing
characteristics in plastics. Reinforcing characteristics that were
tested include tensile strength, flexural strength, flexural modulus,
and impact resistance, which are the standard physical characteristics
used by the plastics industry in order to evaluate the overall quality
of any given plastic product. ISK Wollastonite from the Bril deposit as
tested against NYCO grades commonly used in nylons. NYCO, located in
upstate New York, is the only U.S. wollastonite producer specializing in
plastics-grade wollastonite products. The plastic used for testing was
nylon, which is the most common wollastonite-reinforced plastic in the
plastics industry. The results are summarized in the table below:
//st
Supplier Whitegold NYCO NYCO
Grade Unfilled Nylon Bril 8 Nyglos 8 Nyglos 8
(untreated) (untreated) (untreated)
Price (Cdn$/tonne) $1,600 $1,600 $2870
Tensile Strength,
psi 10,150 14,020 11,080 13,450
Elongation % 32 9 6 8
Flexural Strength,
psi 15,670 22,250 21,380 23,170
Flexural Modulus,
kpsi 404.37 945.84 952.60 954.50
Impact Resistance (ft.lb./in.)
Notched 1.96 1.46 1 1.52
* converted from US$/short ton using 1.45 dollar exchange rate f.o.b.,
Willsboro, NY.
//et
The results of the testing indicate that ISK Wollastonite is superior in
product quality to comparable high-end products sold by the only major
wollastonite producer in North America. Tensile and flexural strength,
as well as elongation percent, of nylon is higher when reinforced with
ISK Wollastonite compared with untreated NYCO wollastonite. Also very
encouraging, is the fact that notched impact resistance using ISK
wollastonite is maintained at a higher level than untreated NYCO
wollastonite, products tested. This is significant because an important
goal of most mineral fillers is to minimize the loss in notched impact
resistance and still achieve high tensile, flexural, and elongation
strengths. It appears from the results above that ISK Wollastonite can
achieve this critical goal.
Testing also showed that ISK Wollastonite, without surface treatment, is
superior in tensile strength and elongation percent and comparable in
all other physical characteristics to surface treated Nyglos 8. This
indicates that 'Bril 8' product, without expensive surface treatment,
can compete effectively with surface treated products which are selling
for CD$2870 per tonne. Moreover, recent milling tests conducted in
Brampton, Ontario have shown that essentially all of ISK Wollastonite
can be economically processed into 'Bril 8' product. The results from
the above described test work will be incorporated into a technical
paper written by George C. Hawley which will be presented at the Annual
Technical Conference (ANTEC) held by the Society of Plastics Engineers
in May '98.
Based on the above results, ISK Wollastonite is projected to sell for an
average CN$1,250/tonne. This figure represents a weighted average of an
assortment of conservatively priced products that ISK Wollastonite has
been shown to be able to produce. At an annual production of 20,000 tons
of product, Whitegold's market penetration would represent approximately
10% of the world's current wollastonite use in plastics. This market
penetration is very realistic because it is equivalent to one year's
growth rate of the wollastonite-filled plastics market. Once market
demand for high-end ISK Wollastonite product is established and
expanded, the average price for ISK Wollastonite product has potential
to increase significantly.
Upon completion of the processing of several tonnes of ISK wollastonite
ore, anticipated at the end of this month, the Company will begin
distributing ISK wollastonite product samples to interested potential
consumers in order to attain purchase orders and confirm market demand.
The Company has already received numerous requests for ISK wollastonite
product samples over the last two years. The request have come from
European, Asian, and American companies which either already consume
wollastonite or are interest in becoming a major wollastonite buyer.
Preliminary project economics based on a CN$1,250/tonne selling price,
suggest that the ISK Wollastonite project is very economically
attractive. The net present value of the project, using a 10% discount
rate, is approximately CN$40M after-tax (CN$93M pre-tax) and the
discounted cash-flow rate of return is 22-26% after-tax (31-36%
pre-tax). The capital cost estimate for the project is approximately
CN$57M, including a CN$7.4M contingency, with a 3-year payback period.
these preliminary figures are not expected to vary substantially upon
completion of the full feasibility study in the fourth quarter of 1998.
However, they are libel to change due to unforeseen circumstances and
should be regarded only as an indication of the projects development and
future direction.
As mentioned in Whitegold's previous news release, the Company has begun
actively pursuing joint venture partners and is in a position to allow
shareholders to consider buy-out offers.
TEL: (604) 681-2393 Brian A. Lueck, President, P.Geo. FAX: (604)
681-4369
1-888-646-9922 Toll Free
|
