inwood Dolomite

Magnesium-rich Dolomite

The Inwood Magnesium Dolomite Property is located in south-central Manitoba, 80-km north of Winnipeg. The Property covers 1,584 hectares (3,914 acres) holding near or at surface beds of high-purity dolomite that are above the water table. The Property hosts a substantial resource identified in a National Instrument 43-101 resource report. The current focus of the Project is the identification of viable markets for high-purity dolomite and any new economically-viable magnesium production processes.

On November 16, 2016, Gossan announced that it had entered into an Exclusive Supply Agreement with Sediment Research & Minerals Ltd. (“SRML”) for the provision of high-purity dolomite. SRML has identified several markets for dolomite and also has access to a process with the potential to extract magnesium oxide from dolomite in a green-friendly manner.

SRML intends to utilize its proprietary processes to develop a set of high-value by-products, to be trade named SRMLstone, SRMLcrush and SRMLslab. Markets for these innovative specialty products include agriculture, aquaculture, human & animal healthcare, mineral development & tailings remediation and wallboard construction.

Under the terms of the exclusive supply agreement, Gossan will receive a production royalty on all dolomite quarried and sold of $1.00 per tonne for products with a price of less than $70 per tonne and a royalty of 2% for products with a price of $70 per tonne or greater. Gossan will also retain an equity interest in the project.

Sediment Research & Minerals Ltd (SRML) is a Manitoba-based “green” company. During the past 8 years of extensive trials, it has developed an environmentally sensitive mineral development system with the patent-pending name “TSP – The SRML Process”. SRML is a privately-owned innovator applying “green mining methods” to the recovery of metals from tailings and to the development of new mineral resources.

On May 13, 2006, the Gossan completed a 27-hole drill program, totaling 496 metres, on its Inwood Magnesium Dolomite Property. Watts, Griffis McQuat (WGM) were retained to undertake a National Instrument 43-101 Report resource calculation based on the results from the 2006 drill program and 25 holes previously drilled on the Property.

The 2006 drill program was conducted at a grid spacing of 200x200 metres over an area of approximately 80 hectares. The program targeted the Fisher Branch Formation which typically outcrops at surface and extends to a depth of about 12-15 metres.

On September 8, 2008 Gossan announced the findings of the Watts, Griffis, McOuat National Instrument 43-101 Report (Final) on the Inwood Dolomite Project. The final report utilized a more sophisticated block modeling technique than an initial report. Total residue for the Fisher Branch resource was reduced to 0.34%.

The Inwood Property hosts a very-large, high-quality deposit with the report estimating the Fisher Branch resource as follows:

 

Formation and Zone Resource Classification Tonnage Grade MgO (wt%) Grade CaO (wt%)
Fisher Branch Measured 28,819,000 21.15% 30.91%
Fisher Branch Indicated 5,057,000 21.40% 30.66%
Fisher Branch Inferred 131,236,000 21.64% 30.51%

 

An initial environmental study has been conducted at the Inwood Property. No endangered species were identified in the assessment of the natural environment. The area provides typical habitat for garter snakes and grouse amongst other species. Portions of the Inwood Property are part of a wildlife management area. It is Gossan’s intention to replenish similar natural environment should production need to proceed on these portions of the Property. The cost of acquiring replacement land is not considered material to the project. The Fisher Branch resource is in an area of the property which is not within a wildlife management area.

The Peguis First Nation has filed a Treaty Land Entitlement (TLE) in a large area in southeastern Manitoba which includes the Inwood area. Gossan has initiated an engagement process with the Peguis First Nation (PFN). The PFN is considered a pro-business band and their potential involvement could lead to additional support for the Inwood Project.

Gossan contracted Jim Collinson, the former Canada's head of delegation to the OECD High Level Committee on Environment and Economy and the President of the UNESCO World Heritage Committee, to conduct a site visit at Inwood, which took place May 3, 2012 to study all environmental factors pertaining to the Inwood Property.

Between 2007 and 2013, the Company collaborated on the development of a new high efficiency magnesium metal production process being developed by Douglas J. Zuliani, known as the Zuliani Process. Despite considerable success in advancing the process and its development, the agreement with Dr. Zuliani expired in early 2013, at a time when considerable uncertainty developed regarding the outlook and future of the magnesium market. China produces about 85% of the world’s magnesium. As of January 1, 2013, China dropped its 10% export duty on magnesium ingot which resulted in a softening of magnesium prices. China is fully committed to remaining the world’s dominant magnesium producer.

The USGS also reported a significant shift in magnesium production within China in order to significantly reduce production costs by utilizing re-cycled waste residual gas from coking operations as a fuel source rather than coal. As coal is a major input cost, the effect on Chinese production costs could be significant and when coupled with the elimination of the 10% export duty would materially erode the expected direct costs savings of magnesium production in Canada using the Zuliani Process in comparison to direct cost of Chinese magnesium ingot landed in western markets.

Since the fall of 2015, Gossan has been collaborating with a third party, Sediment Research & Minerals Ltd. (“SRML”), to assess the quality and nature of the Inwood dolomite for various uses and applications. Over the past year, testing was conducted on two samples in both Canada and Germany with positive results. SRML also has access to a polymer and a process which may allow the extraction of magnesium oxide from the dolomite in a green-friendly manner. On November 16, 2016, Gossan announced that it had entered into an Exclusive Supply Agreement with SRML for the provision of high-purity dolomite. Gossan will receive a production royalty and also retain an equity interest in the project.