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Objective Capital's Rare Earths, Speciality & Strategic Metals

Objective Capital's Rare Earths, Speciality & Strategic Metals
Investment Summit 2012
Ironmongers' Hall, City of London
13-14 March 2012
Speaker: Robert Mackay, Stans Energy

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Soviet expertise, Canadian security Soviet expertise, Canadian security Presentation Transcript

  • RARE EARTHS, SPECIALITY& STRATEGIC METALSINVESTMENT SUMMIT Soviet expertise, Canadian security Robert Mackay – CEO, Stans Energy IRONMONGERS’ HALL, CITY OF LONDON TUESDAY-WEDNESDAY, 13-14 MARCH 2012 www.ObjectiveCapitalConferences.com 1
  • Russian Metallurgy, Canadian Expertise 2
  • Statements contained in this presentation which are not historical facts are forward-looking statements that involve risks,uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by suchforward-looking statements. Factors that could cause such differences, without limiting the generality of the following, include:risks inherent in exploration activities; volatility and sensitivity to market prices for uranium and rare earths; volatility andsensitivity to capital market fluctuations; the impact of exploration competition; the ability to raise funds through private orpublic equity financings; imprecision in resource and reserve estimates; environmental and safety risks including increasedregulatory burdens; unexpected geological or hydrological conditions; a possible deterioration in political support for nuclearenergy and rare earth technologies; changes in government regulations and policies, including trade laws and policies; demandfor nuclear power and rare earth products; failure to obtain necessary permits and approvals from government authorities;weather and other natural phenomena; and other exploration, development, operating, financial market and regulatory risks.Although Stans Energy Corp. believes that the assumptions inherent in the forward-looking statements are reasonable, unduereliance should not be placed on these statements, which only apply as of the date of this release. Stans Energy Corp. disclaimsany intention or obligation to update or revise any forward-looking statement, whether as a result of new information, futureevents or otherwiseCautionary Note to United States and Other Investors Concerning Estimates of Measured, Indicated and Inferred Resources:Certain tables may use the terms “Measured”, “Indicated” and “Inferred” Resources. United States investors are advised thatwhile such terms are recognized and required by Canadian regulations, however, the United States Securities and ExchangeCommission does not recognize them. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, andas to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever beupgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis offeasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured orIndicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not toassume that all or any part of a Mineral Resource is economically or legally mineable. 3
  • Stans Energy is focused on re-starting a past producing Rare Earth Elements mine andprocessing facility in KyrgyzstanKutessay II Mine: • Past producing open pit mining operation • Produced equal quantities of heavy and light rare earth elements • Known metallurgical processes • 20-year mining license in placeKashka Rare Earth Processing Facility (KRP): • Processed ore from Kutessay II Mine for 30 years • Produced 120 metal, alloy, and oxide products • Under care-and-maintenance since 1991 • Private rail terminal provides access to Russia, Europe, and AsiaStrong Board, Technical Advisors, and Management: • Many involved with Kutessay II and the KRP prior to 1991 4
  • Stock Exchange HRE (TSX-Venture)Shares Outstanding 157,263,986as at March 8,2012Warrants 8,475,476Options 13,663,333Total (fully diluted) 179,402,795Market Cap C$138mShare price (Mar 9) C$0.8852 week high/low C$2.45/ C$0.52Net cash C$17 mDebt Nil 5
  • Major REEs to be produced by Stans Energy Properties Industry UseYttrium High Tech Defense ApplicationsTerbium ReducesEuropium WeightDysprosium EmissionsGadolinium Energy ConsumptionHolmium Hybrid Electric Vehicles Green TechErbium AllowsThulium Greater EfficiencyLuteium PerformanceYtterbium MiniaturizatoinLanthanum Speed Water Treatment Other ApplicationsCerium DurabilityPraseodymium Thermal StabilityNeodymiumSamarium 6
  • Global REE Demand Pacing to Outstrip Supply 250,000 200,000 (Tonnes of REO) 150,000 100,000 50,000 0 2005 2006 2007 2008 2009 2010 2011f 2012f 2013f 2014f 2015f China Demand Adjusted Global Demand ROW Supply China SupplySource: IMCOA – Industrial Mineral Company of Australia 7
  • Source: US Department of Energy 8
  • RUSSIAEUROPE JAPAN CHINA Kyrgyzstan 9
  • • 100% ownership of former Soviet-era mine• Produced 80% of FSU’s REE needs• March 2011: Pit-contained mineral resources – Measured + Indicated: 45,650 tonnes of contained TREO – Inferred: 3,560 tonnes of contained TREO• Preliminary Feasibility Study (PFS) to be completed by end of Q1 of 2012• 20-year mining license and all permits are in place• Adjacent beryllium deposit provides additional upside – 9.245 million tonnes grading 0.128 % BeO*** ***Based on historical reserves 10
  • Aktyuz Ore Field: Kutessay II REE Mine And Exploration Areas Kutessay III Kalesay Aktyuz Kutessay IIAktyuz Mill
  • Kutessay II REE Mine
  • NEWMINERALIZED ZONE 13
  • Rich , coarse, concentrated Physical RE Minerals Conc. Pure & easy liberated Placers, Veins,… deposits F.Carbonate : BN Phosphate : MZ, XN Exo, Rad* Pufication Beneficiation Range Finishings forREO content M.Mixed & liberated Markets Hydro, Pyro Oxides : LP,… Silicates : ED ,… Metallurgy range Pure & Phosphates : AP, CH,… IX, SX Mixed F.Carbonates : PA,SY,… In Salts, Weathered, Adsorbed Cl or NO3 Leaching solutions Oxides, Al.Phosphates : FL,.. Metals Ionic ores : Clays Poor, fine, disseminated RE Minerals 14 BN Bastnasite, MZ monazite, XN xenotime, LP loparite, ED eudialyte, AP apatite, CH churchite, PA parisite, SY synchisite, FL florencite,… JP.TOGNET 2012
  • Mineralogy complexityPhysical Concentrate Mix Physical Concentrate Crude ore High REO content Intermediate REO content Low REO content MZ, XN BN IO BN LP ED,… YS Silicates NaOH direct/alkal Carbo H2SO4 Alkaline Salt cracking Roasting chlorination Roasting Roasting leaching Crude RE HCl Water Water HNO3 Selct.RE Hydroxide dissolution dissolution dissolution dissolution precip. HCl, HNO3 Ce conc. + Crude RE Crude RE Crude RE HCl dissolution RE3 Cl solution dissolution Cl solution SO4 solution NO3 solution Non RE + Rad* Purification of Mix RE solutions by Chem and/or SX Purified Mix RE solution (Cl, NO3, SO4) ready for individual separation 15BN Bastnasite, MZ monazite, XN xenotime, LP loparite, ED eudialyte, AP apatite, CH churchite, PA parisite, YS synchisite, FL florencite,… JP.TOGNET 2012
  • Unproven Metallurgical Process for Complex Silicate RE OresBased on Mineralogy :- Crude ore : Low REO Sulfuric acid H2SO4- Physical conc. : High REO - Roasted or not Sulfuric Baking or in pulp cracking Atmospheric or Pressure Cake Slurry RE+M+Gangue Sulphates Washing, Dilution Precipitation, Gangue residue L/S Filtration Purification RE Sulphate solution Low REO conc. Purif & changing anion by : RE recovery & - Precipitations + Dissolutions Effluent treatment… - IX / Solvent eXtraction ?! concentration Mix.RE Chloride/Nitrate solution ready for SX separation JP.TOGNET 2012
  • • 100 % ownership• Processed Kutessay II ores for 30 years• 120 metal, alloy, and oxide products• Under care and maintenance since 1991• Private Rail Terminal provides access to Asia, Europe, and Russia• Facility originally designed by VNIIHT, one of Stans Energy’s core consultants 17
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  • 30 year proven track record of 99.99% oxide production 19
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  • Element Oxide REEs % REO USD/kg REE Breakdown by Value Dysprosium Dy 6.14 1,550 (FOB prices in USD February) Yttrium Y 26.73 145 Terbium Tb 1.55 2600 Neodymium Nd 8.18 175 Europium Eu 0.23 3400 Erbium Er 3.25 205 Praseodymium Pr 3.78 75 Gadolinium Gd 3.59 148 Samarium Sm 4.1 74 Holmium Ho 0.57 128 Thulium Tm 0.25 790 Ytterbium Yb 3.29 155 Lutetium Lu 0.5 1,270 Cerium Ce 19.68 33 Lanthanum La 16.55 35Based on historic production 23
  • VNIIHT’S ROLE• Stans Energy’s feasibility studies (Q1 2012) will be conducted under the guidance of VNIIHT. VNIIHT’s sixty years of chemical technology experience combined with their capabilities of executing the complete cycle of rare earths research, development, and production will give Stans Energy a significant advantage relative to its competitors.• VNIIHT will also assist with evaluation and acquisition of other HREE properties in areas of the Former Soviet Union (FSU) 24
  • VNIIHT ACHIEVEMENTS Technologies developed in the Institute became the production cycle base for over 20 hydrometallurgical plants Over 150 sorbents, extractants and resins were engineered Over 3600 developments were industrially implemented Over 2600 inventors certificates and patents were issued 7 minerals were discovered Over 100 PhDs are employed 25
  • Canada Honorary Consul of the Kyrgyz Republic for Canada Russia Kyrgyzstan VNIIHT Kyrgyz-Russian Slavic UniversityIGPMG RAS Asiarudproject ARRIMR GEOTEP Ecoservice 26
  • CORPORATE STRATEGY• Complete Preliminary Feasibility Study by the end of Q1 2012 • Updated mineral resource statement • First opportunity to present mineral reserves• Bankable Feasibility Study expected in H2-2012• Advance off-take agreement discussions with end users• Continue to explore: • Deep drilling of areas of know mineralization• Refurbish Kashka Rare Earth Processing Facility (KRP) • Optimize recovery process with new technology• Build out operating and construction teams• Assess HREE and joint-venture opportunities 27
  • President, CEO & Director, Stans Energy Corp; ROBERT MACKAY, BSc MiningRobert worked in various facets of Mineral Exploration from 1969 to 1975 including diamond drilling, geophysics, geologicalmapping and prospecting. In 1975, Robert graduated from the Haileybury School of Mines. From 1975 to 1980, he gainedextensive experience in mining, including mine planning, surveying, grade control, industrial engineering, open pit andunderground production. Robert graduated from The South Dakota School of Mines Technology in 1980 with a Mining EngineeringDegree and over the next twenty years he worked in the investment business and was a Vice President of two national investmentfirms. In 2000 Robert started a consulting business and over the next 5 years he worked as a Project Engineer on projects inCanada, United States, China and Africa. Chief Operating Officer & Director; BORIS ARYEV, MSc, P.eng After migrating to Canada in 1983, he worked as a software development consultant with NCR Canada Limited & OPTIMOD Inc. until 1986 and then with Verifact Inc. until 1996. In 1990, Boris became and still is President of Marhope Systems Inc., providing management and consulting services to both public and private sectors. Boris is the founding Director of the Canada-Eurasia-Russia Business Association, founder and chairman of its Mining & Northern Development Committees and co- founder of IEC Minerals Working Group.Chairman of the Board; RODNEY IRWIN, MA , Honorary Consul of Kyrgyz Republic in CanadaFrom 1972 to 1974, Rodney joined the Department of External Affairs, in Ottawa, then in 1978 through to 1980, he servedabroad in New-Delhi, Moscow & Port of Spain. From 1988 to 1990 Rodney served as High Commissioner, then in 1992, wasnamed Ambassador to Yugoslavia. Due to the war with Croatia, he served as Ambassador to Albania, Bulgaria, Slovenia &Croatia. From 1993 to 1996, he was Ambassador to Hungary while retaining his Balkan country accreditations. From 1999 to2003, he served as Ambassador to the Russian Federation with concurrent accreditation to the Republics of Armenia &Uzbekistan. Vice President of Operations; DAVID NEWTON, MSc. During his forty year career in various mine management functions, Mr. Newton has held increasingly senior positions with such firms as Anglo American Corporation and Newmont Gold. Throughout the course of his distinguished career, Mr. Newton has overseen both open-pit and underground mining operations most recently having worked in jurisdictions as diverse as: Democratic Republic of Congo, Armenia, Georgia, Uzbekistan, Ghana, United Kingdom, and South Africa. 28
  • Managing Director of STANS ENERGY KG; DR. GENNADY SAVCHENKO, CGeol, FGS, Qualified Person (QP)Dr. Savchenko graduated from Frunze Polytechnical Institute with a Mining Engineer-Geologist Diploma and Ph. D in Geology& Mineralogy in 1971, then worked till 1981 in exploration & mining enterprises for Uranium in Kazakhstan, East Germanyand China. From 2000 to 2002, Dr. Savchenko was Deputy Chief in the Department of Geology & Investment for the KyrgyzState Geology & Mineral Resources Agency.Vice - Chairman of the Board; Gordon R Baker, Q.C.In 1972, Gordon was called to the Bar of Ontario, then in 1983, he was appointed to the Queens Counsel. A highlyregarded corporate law specialist, Gordon holds extensive experience in business law (mergers, acquisitions, jointventures, financing & structuring) and has acted as counsel (including as a registered lobbyist) advising ongovernment relations (strategic planning, negotiation, compliance issues).Director; DR. DOUGLAS H UNDERHILL, CPG, PhD, MSc, BA (Geology), MBA, Qualified Person (QP)From 1993 to 2002, Doug was a Uranium Resource & Production Specialist for International Atomic Energy Agency inVienna. He has over 40 years of minerals industry experience with nearly 30 of those years dedicated to uranium(including experience in Kazakhstan & Uzbekistan). As Senior Consultant with Nuclear Assurance Corporation (USA), he isresponsible for consulting on Uranium supply strategy and maintaining a worldwide uranium production projects database.Doug represented IAEA in Joint IAEA-NEA Uranium Group. Has an MBA in Strategic Planning & Finance. 29
  • Advisor; DR. GENNADY SARYCHEVDirector of the Leading Research Institute of Chemical Technology (VNIIHT) is a former professor of the MoscowEngineering Physics Institute. He has held the position of Director/Department Head of the following institutions:Department of Scientific Research and Development, Department of Scientific Research Work, Department of StatePolicy on Science, Innovations and Intellectual Property, Department Head of Planning and Construction ofInfrastructure Objects for Special Economic Zones. Dr. Sarychev adds invaluable experience to Stans Energy in areas ofinternational cooperation amongst the scientific and business communities.Advisor; DR. VALERY KOSYNKIN; Ph.D., ProfessorDr. Kosynkin is one of the world’s preeminent chemists and metallurgists for Rare Earth Elements (REEs). Dr. Kosynkinholds a doctorate of philosophy from Moscow State University. His dissertation was on uranium and the development ofREEs through processing loparite concentrate. Since 1959, Dr. Kosynkin has been employed by VNIIHT – The RussianLeading Institute of Chemical Technology, initially as a research in uranium technologies, and from 1973 as the Head ofResearch and Development for REE chemistry and technology. Dr. Kosynkin has overseen the commissioning of REEproduction and extraction facilities in Russia, Ukraine, Estonia, and Kazakhstan. In addition to his work at VNIIHT, Dr.Kosynkin served as a USSR IAEA representative from 1968-1973. He has lectured on REE metallurgy and chemistry inRussia, China and Korea.Advisor; MR. JAMES ALLAN BASc (Geological Engineering) MSc (Geology, Engineering)Mr. Allan is a Registered Professional Engineer with the Association of Professional Engineers, Geologists and Geophysicistsof Alberta (APEGGA). James has over 45 years of experience working with several major mining and petroleum companiesand as an independent consultant in mining exploration and exploration management, mineral property evaluation andmining geology. James has been involved in the exploration for, and evaluation of, rare earth deposits both as manager ofexploration in Canada for a large rare earth company from 1982 to 1990 and as an independent consultant. 30
  • Advisor; DR. MARAT I FAZLULLIN Leading Russian expert on uranium, gold, and rare earths. Dr. Fazlullin is a renowned Professor, Doctor of (engineering) Science, member of the Mineral Resources International Academy and an Honorable Geologist of the Russian Federation. He has written over 300 publications on Uranium and gold-ore deposits including treatment by the heap and underground leaching methods. He also lead prospecting teams and expeditions for poly-metallic, mercury deposits, oil and gas fields located in Kyrgyzstan, Tajikistan & Algeria as a Chief Engineer.Advisor; MR. JAMES B. HEDRICKMr. Hedrick is a rare-earth elements, scandium, yttrium, thorium, zirconium, hafnium, and the mica group of mineralsexpert. James possesses a wealth of knowledge with over 31 year of experience in Mineral commodities. Mr. Hedrickserved as Chairman and Executive secretary of the U.S. Government’s Minerals, Metals, and Materials Advisory Board from1981 to 1995, and chaired two sessions on the rare-earth elements and one on strategic and critical minerals for TheSociety for Mining, Metallurgy, and Exploration (SME). 31
  • Kyrgyzstan Foreign Investment • New Kyrgyz Government has made mining and property rights its number 1 and 2 priorities in terms of foreign investment • The Basic Foreign Investment Law, adopted in June 1991, allows foreign investors full use of their profits, including unlimited export of profits in the form of foreign currency or merchandise. • Foreign firms also enjoy considerable tax advantages, which extend to Kyrgyz partners in joint ventures. • Investors are granted relief from import duties on materials needed to establish a business, and they continue receiving tax relief for up to five years, depending on their type of business. • After that time, several other types of tax relief are available, including various forms of reinvestment in Kyrgyzstans economy.Mining in Kyrgyzstan • In contrast to the previous regimes, the current government is enhancing the procedure for obtaining exploration licenses in favor of the mining companies. • As for the general licensing procedures, the laws stick to a more transparent procedure providing for issuance of a license on a “first come first served” basis. • As opposed to licensing, concession and production sharing agreement regimes should allow companies to negotiate with the state individual terms that meet the companies’ needs. • Additionally, in order to avoid the state courts, the concession or production sharing agreement can provide for the jurisdiction of international arbitration courts if any legal disputes occur. 32
  • TSX-V: HREOTCQX: HREEF Kutessay III STANS ENERGY CORP. 8 King St. East, Suite 205 Toronto, ON, M5C 1B5 Tel: 647 426 1865 Fax 647 426 1869 www.stansenergy.com info@stansenergy.com 33