Great Quest Phosphate Primer


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With an average phosphate grade of 23.4% and significant exploration upside, the Tilemsi deposit has the potential to become a world-class high-grade phosphate resource

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Great Quest Phosphate Primer

  1. 1. Strategic importance of Phosphorus (P) Essential nutrient for all life forms Phosphorus-deficient wheat plants (right) Especially important in root development Mined phosphate rock is one of the world’s most important sources of phosphorus 90% of the world phosphate production is used in fertilizers Its functions cannot be performed by any other nutrient In the natural environment, phosphorus is supplied to plants through the weathering and dissolution of rocks – very low solubility Photo credit: CIMMYT . Phosphorus is a vital . There are no substitute resource to global for phosphorus in food production agriculture 2
  2. 2. Geology Phosphate rock is one PHOSPHATE ROCK TYPES of the world’s most important sources of phosphorus  Igneous ₋ As a result of volcanic eruption ₋ Fewer impurities Economic and potentially economic  Sedimentary phosphate deposits of the world ₋ Formed ~70 million years ago ₋ Derived from living creatures and contain organic matter The two deposits have widely differing mineralogical, textural and chemical characteristics 80% of the world phosphate production is derived from sedimentary depositsSource: FAO 3
  3. 3. Sedimentary Rock Characteristics Group 1 - Boucraa (Morocco), Togo and Senegal  High grade P₂O₅ – 35-37%  High Cd level  Some line problems with Cl level Group 2 - Khouribga (Morocco), Israel, Jordan  P₂O₅ grade – 31.5-33.5%  Preferred for SSP and TSP production  Can be used for acid production  Sometimes needs SiO2 and Al2O3 adjustment The largest sedimentary  Medium level of organic material deposits are found in 300 North Africa, China, the Billion tons – Estimate Middle East, and the US of world resource of (Source: USGS) phosphate rock 4
  4. 4. Phosphate Rock Mining & Production Over 75% of the world commercial phosphate deposits is surface-mined 67% of global production ₋ Utilizes many forms of extraction concentrated from manual methods to the use of in just 3 countries highly-mechanized technologies Remainder of global production is recovered by underground mining Global Distribution of Phosphate Reserves Mined phosphate rocks can range from 5% to over 40% in grade Phosphate rocks is processed to remove impurities and upgrade the rock quality Current world phosphate rock production capacity is estimated at: ~165-195million tonnes/year; or ~50 million tonnes/year of P₂O₅ (ie. diphosphorus pentoxide) Source: USGS 2009 5
  5. 5. Phosphate Rock for Direct Application Rock Characteristics  Direct application of un-acidulated P₂O₅ content: 28-33% phosphate rock as phosphorus fertilizer Solubility in citric acid: 30-33% has received considerable attention in the P₂O₅ solubility in formic acid: 50-55% last years ₋ Direct application is advisable only with Phosphate Rock Producers some phosphate rocks and under Sedimentary Rock specific conditions Morocco, Jordan, Togo, Israel, China, Syria, Egypt, Senegal, etc.  The following factors play important role Igneous Rock in determining agronomic economic Russia (Kola Peninsula), South Africa, effectiveness of phosphate rock: China, DRC, Ethiopia, Canada ₋ Particle size of the rockPhosphate rock producers like the US, Brazil, ₋ Soil properties and climate of theTunisia and Finland target domestic markets region Phosphate rocks that have a high ₋ Timing and method of application phosphorus content and are highly ₋ Crop and farming system used soluble in slightly acidic soils make ₋ Residual effect of the rock great candidates for direct application ₋ Use of the rock as a soil amendment 6
  6. 6. Fertilizers Fertilizers are combinations of the nutrients that plants must have to grow, in a form they can use. These plant nutrients can be supplied through organic fertilizers such as plant residues or livestock manure, or mineral fertilizers, which are chemically processed to meet crop needs. Effects of NPK on a poor Zimbabwe soil Three primary nutrients in fertilizers are essential elements to global agriculture Nitrogen (N) Phosphorus (P) Potassium (K) Source: IPNI 7
  7. 7. Phosphate Use in Fertilizers Phosphorus (P) additions are needed in most areas of the world to improve soil fertility and crop production. Direct application of unprocessed phosphate rock (PR) to soil may provide a valuable source of plant nutrients in specific conditions (Source: IPNI) Fertilizer uses of phosphate rock:  Phosphoric Acid  Nitro-Phosphate Fertilizers  Basic Fertilizers (SSP₁, TSP₂)  Direct application Rock Quality for Fertilizers  SiO₂ – as low as possible to improve grinding capacity  CO₂ – high CO₂ gives high reactivity to the rock  Al₂O₃, Fe₂O₃, MgO – reduce P₂O₅ availability in the product, but increase strength during granulationNote1 Single Super Phosphate fertilizer2 Triple Superphosphate 8
  8. 8. Producing Phosphate Fertilizers Phosphoric acid is produced by attacking Path to Product rock phosphate using a wet process, to facilitate separation and reduce dust Nitro-phosphates are fertilizers produced by attacking phosphate rock with nitric-acid: ₋ PEC process in which the calcium nitrate is not separated from the product ₋ Norsk Hydro or Odda process in which the calcium nitrate is separated by cooling and filtration, and is used to make CAN Basic fertilizers are produced by attacking the rock with: ₋ sulfuric acid to receive SSP; or ₋ phosphoric acid to produce TSP 9
  9. 9. Phosphate Rock Beneficiation  The beneficiation process allows a concentration of ~1.5x but higher ratios up to 9x are possible with some rocks  All phosphate ores have to be beneficiated before use  Evaluation of phosphate quality and level of beneficiation has considerable effect on economics ₋ CaO/P₂O₅ ratio, rather than P₂O₅ has the main effect on the production cost ₋ Level of impurities in the final product is also important  Technologies may be used to remove gangue and increase P₂O₅ levels  Type of beneficiation process depends on: ₋ Nature of Rock ₋ Process in which the rock will be used ₋ Cost Photo credit – Fox Mining Machinery 10
  10. 10. Beneficiation ProcessDry Mechanical Washing Calcination FloatationThe P₂O₅ level in the phosphate rock has different Calcination removes Phosphate is floated outsize fractions which can be presented by a normal organic matter and forming the gangue. Carbonatecurve increases P₂O₅ by and clay are removed by removing carbonate floatation and the phosphate rock is removed from the CaCO₃  CaO + CO₂ bottom of the cell Used to increase P₂O₅ from ADVANTAGES 5-6% to 36%+ in Kola, South  Removes organic matter Africa and Finland  Boosts P₂O₅ content  Reduces Cadmium PARAMETERS OF THE PROCESS DISADVANTAGES  “Liberation” of the rock by size reduction  Sulfides formation  Reduces reactivity which  Reagents By screening out the +1mm and -200 mesh causes instability in  PH control (74m), it is possible to increase the P₂O₅ level  Level of organic material in some phosphoric acid of the rock by 2-3%, 28- 29% to 31-32% P₂O₅ production units the rock This operation can be done in both dry and  Cost ADVANTAGES wet process  The rock is fine (-35 mesh) and less dusty  P₂O₅ increases even for rock with “flat” curve for particle size distribution 11
  11. 11. Industry Trends  Phosphate reserves depleting globally: 30% ₋ Some estimate 15 million tonnes of phosphate reserve depletion to occur within the next 75- Morocco’s share 100 years in global exports  Demand increasing: of phosphate ₋ Annual consumption of 40m tonnes ₋ Global consumption expected to grow 2% per annum globally (FAO, USGS) Phosphate Rock Outlook Improving Global P₂O₅ Demand Diminishing Year diets in arable land (in Mt) developing per capita countries 2008-2009 33.6 Farm yield Growing food 2009-2010 38.3 enhancement demand policies 2010-2011 (e) 40.9 2011-2012 (f) 41.7 Growing Growing 2015-2016 (f) 45.2Population Average Annual growth fertilizer biofuel 3.1% demand Growth Rate demand Source: IFA Fertilizer Outlook 2011-2015 (e) estimated, (f) forecast Growing need to maximise agricultural yield 12
  12. 12. Industry Stats Top 5 Phosphate Producers (in million tonnes) Production (2008) Reserves 62% China 50 4100 of identified recoverable US 31 1200 phosphate rock reserves Morocco 28 5700 are in Morocco Russia 11 200 (Source: CRU) Tunisia 7.8 100 Source: USGS Phosphate Supply and Reserves Supply Demand Reserves Annual Annual Avg in Kt Growth in Kt Growth in Mt Grade Africa 7,498 7.90% 1,393 0.80% 7,106 26% Americas 11,417 1.30% 11,614 1.60% 5,412 23% Asia 15,484 4.50% 20,560 3.00% 1,590 24% Europe 4,708 0.00% 4,031 6.10% 480 7% Oceania 565 0.90% 859 -0.40% 140 18% Total 39,672 3.60% 38,456 2.80% 15,528 - Source: FAO 13
  13. 13. Disclaimer This presentation contains forward-looking statements or forward-looking information within the meaning of applicable securities legislation (hereinafter collectively referred to as "forward-looking statements") concerning the Companys plans for its properties, projects, operations, subsidiaries and other matters. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management regarding operations of the Company which are subject to a variety of business and market risks, including political and regulatory risks associated with mining and exploration in Mali. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. These forward-looking statements are based on certain assumptions which the Company believes are reasonable, however, forward-looking statements are subject to a variety of business and political risks and uncertainties. Some of the important risks and uncertainties that could affect forward-looking statements are also described in the Companys continuous disclosure filings made with Canadian securities regulatory authorities, which are available at the SEDAR website and on the Company’s website. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, they may adversely affect the Company’s business and prospects and actual results may vary materially from those described in forward-looking statements. Forward-looking statements are made based on managements beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward- looking statements if these beliefs, estimates and opinions or other circumstances should change, other than as required by applicable laws. Investors are therefore cautioned against placing undue reliance on forward-looking statements. 14
  14. 14. Great Quest Metals Ltd TSX-V: GQ Tel +1 604.689.2882 Suite 515, 475 Howe Street Toll Free 1.877.325.3838 Vancouver, BC, V6C 2B3 Fax +1 604.684.5854 WWW.GREATQUEST.COM Email 15