Resource World Magazine

J U N E / J U L Y 2 0 1 7 www.resourceworld.com 49 T he election of Donald Trump has elevated metals like copper and iron, as investors bet that an American industrial renaissance is at hand. But Mag One Products Inc. [MDD-CSE] sees an even more high-tech way to profit from the resurgence of the US materials sector: magnesium. As it turns out, America is actually the world's largest consumer of magnesium which is primarily used in making light- weight aluminum, a material that's quickly overtaking heavier steel for applications like transport and aerospace. That's a major opportunity for magnesium pro- ducers. Especially given that 80% of the world's current magnesium supply comes from China, which carries high import duties for end users in the US. The challenge, however, has been find- ing economic magnesium deposits in other parts of the world. Here, Mag One believes it has found an ideal solution, in fact, the company has found a massive magnesium resource that's available nearly for free. That low-cost supply comes from a past- producing mine in southwest Québec. But not an operation that historically produced magnesium, rather one where that critical metal was discarded onto waste heaps. The discarded resource has sat in the dumps for years, forgotten. Until recently, when Mag One's technical team raised the question: could this waste be reprocessed to create a major production centre for magnesium in the heart of the world's largest market? The science says yes. An initial study commissioned by Mag One showed that the waste rock at the Québec mine can indeed be upgraded into a high-purity magnesium oxide product. Being able to create magnesium oxide is a boon for Mag One. This compound is prized as an input into manufacturing building materials, and is sought-after for its resistance to fire, water, mold and termites. Those advantages have long been rec- ognized by Mag One's manufacturing partner, MagBoard, an American firm man- ufacturing proprietary magnesium-based building material called ROK-ON, which helps builders gain energy efficiency and fire safety at lower costs. Through a joint venture, Mag One and MagBoard plan to create a vertically-inte- grated magnesium supplier with Mag One sourcing magnesium oxide to MagBoard's manufacturing plants and the resulting high-tech materials sold on to the massive US market. The venture is already gaining trac- tion, with MagBoard's ROK-ON products recently adopted by big property own- ers such as Hilton Hotels and Holiday Inn. That gives MagBoard a toehold in an American building market that puts up 29 billion square feet per year. The tie-up with MagBoard could mean a large and growing outlet for Mag One's unique magnesium production. A fact that would be appreciated by North American consumers, who right now get what domestic supply they can from magnesium extracted from seawater, a high-price pro- cess, which Mag One will likely be able to outperform. Recently, the company has discovered it may actually be able to provide more than just magnesium from its Québec mine operations. In fact, production here could consist of three different, and valuable, end products. As part of a study released last September, engineering consultants SNC-Lavalin found that Mag One's heaps of waste rock also contain significant amounts of silica and nickel. The consul- tants believe both can be extracted and sold – silica to the construction indus- try, and nickel-bearing iron to the steel business. Produced alongside magnesium, these commodities would give even more value to Mag One's operations. A pilot plant is now being planned to demonstrate and refine the process for extracting each material. The best part is, the feed for this facil- ity will come at nearly no cost to Mag One. Under a deal with the owners of the Québec mine, the company will pay just $1 per tonne of waste material and will only have to pony up cash as material is used. Contrast that to typical mining opera- tions, where the cost to extract and deliver mined ore to the processing plant runs a minimum of several dollars per tonne, and the advantages become clear. The approach is certainly out of the box, but it's far from unproven. Companies in Washington State already produce some magnesium supply from reprocessing local mine waste, proving that the approach works commercially. If Mag One can put together a similar operation, the scale could be even larger. A report is in preparation to gauge the size of the mineral resource at the com- pany's Québec site, which could give North American markets a much-needed lift in potential supply. Nelson Skalbania is Chairman and CEO. n Mag One Products makes magnesium great again by David Forest Mag One's manufacturing partner, MagBoard, is an American rm manufacturing proprietary magnesium-based building material called ROK-ON Systems. Photo courtesy Mag One Products Inc. MINING

• Cover