inwood project & zuliani process
Magnesium
The 1,635-hectare Inwood Magnesium Property is located in south-central Manitoba. In total Gossan’s regional land package covers 6,231 hectares in several claim blocks. The Company’s land position is designed to hold all of the area’s near-surface beds of high-purity dolomite.
The Inwood Magnesium Project is being advanced based on the expectation of higher magnesium prices – currently over US $1.20 per pound - and the development of more efficient magnesium extraction processes. Magnesium extraction technology is the current focus of this project.
On March 15, 2007, Gossan entered into a licensing arrangement for the worldwide rights to a new high efficiency magnesium production process being developed by Douglas J. Zuliani. The new process is based on an efficient adaptation of the Magnetherm process. The Zuliani process is designed to achieve operating cost savings by process efficiency improvements that significantly reduce both energy and key raw material requirements. These enhancements to the traditional Magnetherm method should materially improve both magnesium recovery and silicon reduction efficiency without the need for a vacuum. Energy use is reduced by development of a technically straightforward method that will ensure highly efficient condensation of liquid magnesium metal. Low cost hydro electricity is abundantly available in Manitoba.
In order to prove out the technology prior to commercialization, Gossan is undertaking a three stage evaluation process. Initially thermodynamic modelling was successfully used to verify the process fundamentals. The second stage, which involves bench scale testing, is currently underway at Process Research Ortech of Mississauga. Thereafter a third stage of pilot plant testing will be required to demonstrate commercial viability. Gossan may seek a joint venture partner to assist in the pilot plant testing and subsequent commercialization of the process.
On May 11, 2009, Gossan announced favourable results from its Phase I bench scale testing of the Zuliani Process for extraction of magnesium metal from dolomite. A key finding of the final PRO Report for Phase I was that 98.9% of the magnesium contained within calcined dolomite samples was volatilized under experimental conditions at the desired temperature range. Volatilization, in this case, measures the proportion of magnesium metal that has been released from the calcined dolomite and represents the likely highest possible recovery rate. PRO conducted 8 bench scale tests in Phase I.
Given the nature of the Zuliani Process, recovery rates of magnesium under production conditions could be 20% to 25% higher than the typical recovery rates provided by the Pidgeon Process used by the dominant Chinese producers. The Phase I volatility findings imply exceptionally high raw material utilization efficiency and gives further credence to the Zuliani Process ultimately providing the lowest operating cost per pound of magnesium produced by a material margin. These higher recovery rates coupled with the use of hydro electricity could potentially lower the environmental impact of magnesium production dramatically. Gossan has contracted Process Ortech to undertake a Carbon Emission Study of the Zuliani Process. Cap and Trade legislation pertaining to Green House Gas emissions in North America is widely anticipated to be introduced and mandated in the near future. This legislation, which supports the development of cleaner production processes, may have a material effect on the project’s economics.
Phase II bench scale testing at PRO is now underway. Five tests have been completed and additional tests are ongoing. The Phase II tests are designed to facilitate a complete mass balance plus confirm the quality of the magnesium metal and respective by-products produced.
Gossan has retained Hatch of Montreal to provide engineering process support for the Inwood Magnesium Project The agreement covers a 5-phase work program culminating with the opening of a Certificate of Authorization file with the Manitoba government for construction and environmental approvals for a production facility at Inwood.
In 2006, Gossan completed a 27-hole drill program, totaling 496 metres, on the Property. Watts, Griffis McOuat independently calculated a National Instrument 43-101 compliant resource based on the results from the 2006 drill program and 25 holes previously drilled on the Property. The program targeted 80 hectares of the Fisher Branch Formation which typically outcrops at surface and extends to a depth of about 12-15 metres.
Measured Resource alone would be capable of sustaining a very substantial production facility of 80,000 tonnes of magnesium per year for about 30 years (subject to a positive feasibility study).
An initial environmental study has been conducted at the Inwood Property. No endangered species were identified in the assessment of the natural environment.
