The following Executive Summary is from a Report on the Bukusu project prepared by independent consulting geologist, Dr Ulrich Kretschmar, dated August 28, 2000. We caution that as a summary it may not include all information and explanations which are included in the full report.
EXECUTIVE SUMMARY
Between July 1998 and August 2000, Canmin Resources Limited ["Canmin"], a wholly- owned subsidiary of IBI Corporation, carried out full mineralogical characterization, exfoliation and size grading tests, reserve definition, preliminary open pit mining, test marketing of vermiculite and is currently in the pre-production stage for the Namekara vermiculite mine.
Vermiculite is a group of hydrated, trioctahedral, ferromagnesian aluminum, platy or micaceous silicate minerals. Commercial vermiculite is formed by weathering of biotite and iron-bearing phlogopite. It resembles mica, but has the ion exchange properties of zeolites and some clays. Within the internal structure lie water molecules, which when rapidly heated to high temperature, transform into steam, causing vermiculite particle to increase in volume. This process of thermal exfoliation results in a lightweight and fire- resistant product which finds use in construction products, agriculture, horticulture and other industrial applications.
The vermiculite deposit occurs 1 km northwest of Busumbu on the Busumbu-Namekara ridge, Mbale District of Southeastern Uganda. The vermiculite deposit is the result of residual accumulation and weathering of primary biotite and phlogopite from mica-rich rocks in the southwest part of the circular, 13 km diameter Tertiary ( 24-26 million year old) Bukusu Carbonatite Complex.
An area of more than 2 km by 400 m is underlain by vermiculite. During 1953 and 1954 programs by the Uganda Geological Survey and Mines Dept, 71 pits and ten diamond drill holes were put down on Namekara. 130,594 tonnes and 170,060 tonnes vermiculite of all grades were found to underlie Sites 1 and 2, respectively to a depth 15 m. The deposit is covered by a lateritic red soil-magnetite mix, locally up to 15 m thick.
In the period March to June 1999 an extensive evaluation program was carried out under the direction of Hans Hansen and Wilson Ongom, geologist from the Geological Survey and Mines Department. Six 4X1 m exploratory pits at 100 m intervals were excavated at Site 1. Overburden is 5-6 m thick. The vermiculite did not exfoliate well. Site 2 was underlain by vermiculite darker in colour, with a brighter luster and better exfoliation. Seventeen pits to 10 m depth were dug and 12 NQ diameter holes totaling 491 m were drilled at 100 m intervals to depths ranging from 22.5 m to 51.0 m. From drilling, average depth of overburden is 5.95 m. Pitting showed overburden depths from 2.0 to 7.5 m (average, 4.38 m). The stripping ratio at Site 2 varies between 1:5.4 to 1:8. At Drill hole DN1, overburden is 6 m and vermiculite thickness is > 43 m (36 m at DN10). Waste consists of magnetite, saprolite, weathered greenstone and dolerite host rock. At minimum, an area measuring 690X330 m is underlain by vermiculite. Of 491 m drilled, 314 m was in vermiculite giving an average thickness of 26 m and an average grade of 64% . Bedrock was encountered at depths of between 24 m (DN5) and > 50 m (DN1), but was generally around 40 m. High grade sections were 71% (Hole DN 9) and 100 % (Hole DN1). Given average thickness of 26 m, a tonnage factor of 1.8 and the conservative assumption that 50% of total tonnage is saleable, proven reserves at Site 2 are >5 million tonnes of vermiculite.
A 40X40 m open pit with 6 m wide benches was excavated. Overburden stripped from the mine site was used to build a 1.4 km access road. The area of the mining lease, the new road, the initial main pit and the processing plant site were surveyed. A 5 tonne commercial bulk sample was milled in a hammer mill. Vermiculite delaminates into very thin flakes. These were dried, cleaned, screened (using an 8 mm screen) and graded into Large, Medium (70 %), Fine (15%), Superfine and Micron grades. The milled and delaminated material showed exfoliated densities of 80g/l (Medium); 89g/l (Fine); 96 g/l (Superfine).
Construction of beneficiation , drying and milling facilities and a storage shed is currently under way. A water well was drilled at the factory site in August 2000, yielding 20,000 liters/hour. Twenty tonnes of vermiculite are being dried. A shaker-screening table and two double elevators have been bought and a dryer has been located and is being assessed.
Namekara vermiculite was examined at three independent laboratory facilities for amphibole asbestos, chrysotile or other mineral fibers and none was found. These were: Institute of Occupational Medicine, Edinburgh, Scotland; Skamol Insulation, Denmark and Alan Bromley, Petrolab, Cornwall. A complete chemical analysis was done at the Cornwall School of Mines. Frederick E. Childs, a Surrey-based vermiculite expert, tested and quantified exfoliation densities, grit content and size grades. The mineral mills well to a favourable cuboidal shape, and exfoliated product consists of granules of roughly 1:1 aspect ratio which is unique among commercial vermiculite. All samples had surprisingly low grit contents and a high rate of cation exchange which might lead to applications in water treatment and other wet processing operations. Chemical composition, size gradation, colour and friability fall within the range of commercial vermiculite. Based on these data, customer specification sheets have been drawn up.
Permissions for the Namekara vermiculite project to proceed have been obtained on the level of: 1) individual farmers within the area of the Leased Boundary, 2) Mbale District Councils, 3) NEMA, the National Environment Management Authority, 4) Community Leaders, 5) Geological Survey and Mines Department and 6) Uganda Investment Authority.
Samples of Namekara vermiculite were sent to exfoliators in Europe and the Middle East. Positive responses and several orders for bulk samples were received from Denmark, Saudi Arabia, Oman, Palestine, and Iran. There are orders on hand that exceed current production capacity.
Global production of vermiculite was 469,400 tonnes in 1997 with 211,000 tonnes from South Africa and 180,000 tonnes from the U.S. Brazil, Australia and Russia each produced about 20,000 tonnes a year in 1997. The Shawa mine in Zimbabwe produced 14,800 tonnes. The U.S. consumes 48% of global production. Currently the largest exporter of crude vermiculite is South Africa. In Southern Africa, vermiculite is produced by the Palabora, Samrec (formerly Shawa), Dinidza and Natkruit mining companies. Annual exports of crude vermiculite from these mines to the Europe and Middle East, the primary market area for Namekara were 100-130,000 tonnes in the last three years. 50-60% of Palabora’s production ends up in Europe. Industrial Minerals Magazine quotes: Palabora bulk FOB Rotterdam at US $160-$260/tonne, according to size grade. Medium and Large grades are apparently in short supply on world markets.
Namekara enjoys several competitive advantages and therefore can command higher prices. It is a very high grade deposit and therefore has low mining capital equipment and beneficiation costs. Virtually grit-free, coarse grade concentrate can be readily obtained. Namekara vermiculite has favourable milling, exfoliation and cation exchange properties. The container port of Mombasa is several thousand kilometers closer to European and Middle East markets than are Beira (Shawa, Dinidza) or Durban ( Natkruit) or Maputo (Palabora). Proven reserves are sufficient for more than 100 years of production at foreseeable mining rates.
The Namekara vermiculite project has reached an advanced pre-production stage and full scale production and marketing is proceeding. There has been strong local and government support for Canmin efforts. There appear to be no geological, technical (mineral-chemical) or regulatory impediments to immediate full scale commercial development of the Namekara vermiculite deposit.
Testing of vermiculite, with further detailed chemical and mineralogical characterization, cation exchange capacity determination, thermal expansion tests and research into specific end uses for possible high-value added niche markets should be conducted.
OSHA (US) or equivalent certification (IOM in Europe), and conformity to ASTM or European Vermiculite classification should be sought.
Market development and test marketing should be accelerated. Samples representative of the final commercial product should be sent to all exfoliators in the primary market area. Follow-up visits by sales personnel should be made. Import regulations and market access issues must be established for every consuming country. Sea Freight logistics and freight rates for Africa-Middle East-Europe shipping lanes should be investigated in detail.
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