The CS Project

The Company’s CS Pozzolan-Perlite Project is located in Esmeralda County, Nevada and covers large surface areas of pozzolan and perlite.

The staking of Project claims was first announced on 14 November 2016. The results of this initial testwork, announced on 22 December 2016, were very positive for the production of natural pozzolan and justified a concept study and testwork programme to evaluate the economic potential of the project.

Further announcements on testwork results were made on 2nd and 13th March 2017 and included the discovery that the Main Zone pozzolan had economic potential as a perlite and the discovery of a second zone of non-perlitic pozzolan in the Tuff Zone to the south.

On 4 May 2017 the Company announced that a composite sample from the Main Zone pozzolan has been certified by independent testing laboratory CTL Thompson in Colorado as a raw natural pozzolan suitable for use in concrete in accordance with ASTM C618.

A Concept Study for a potential development of the CS Deposit was initiated at the end of January 2017 and was scoped to consider the production of pozzolan from the CS Deposit and was later expanded to also include consideration of perlite production following discovery of the perlitic properties of the pozzolan in March 2017.

An extract of the Concept Study can be downloaded from the foot of this page and the Summary is as follows:

Concept Study – Summary

The CS Project offers the opportunity to develop production of two separate industrial commodities in the same project area.

Work to date has identified a potentially large deposit of perlite, an industrial mineral which expands on heating to a lightweight material with multiple industrial uses. Expansion tests indicate a high quality perlite. Testing of this same material shows it also has potential as a high quality natural pozzolan for use as a “green” replacement for cement. The project also contains a separate, large area of non-perlitic pozzolan where initial testing results are also favourable.

A quality natural pozzolan competes with Class F coal-fired power plant fly ash. Established natural pozzolan producers in the western US are enjoying rapidly increased sales volumes in cement and concrete markets as traditional supplies of fly ash shrink in line with the continuing closure of coal fired power plants across the USA. Since 2010, 248 power plants or just under 50% of all coal fired power stations in the US have announced a scheduled retirement plan. Many of these 248 plants are deciding to close their doors early, primarily because they cannot compete or remain competitive with gas-fired power production. The supply of fly ash to the western US is already precarious and predicted to become critical in the coming years opening up an already expanding market for natural pozzolan.

For now logistics will be an important factor in the development of a pozzolan-perlite project at the CS Deposit as the project is some distance (160 miles) from rail infrastructure but close to a sealed highway. The project will rely on truck transport with transport costs a large component of the estimated delivered price of CS natural pozzolan and perlite. Potential markets are within reach in Nevada and the populous state of California. Specific market opportunities have been identified for both pozzolan and perlite and the current perlite industry structure suggests that there is room for cooperation with perlite expanding companies looking to integrate with mining operations.

Low-cost market entry strategies have been identified for production of both perlite and pozzolan using a common production plant enabling flexible outputs to meet the market. It is envisaged that, initially at least, the plant will comprise simple crushing and screening sections with raw crushed pozzolan sold to cement producers for intergrinding with cement clinker and crushed raw perlite screened to specific size fractions for sale to perlite expanding companies.

An order-of-magnitude estimate of capital and operating costs for this start-up production plan and simple cash flow analysis suggests the potential for a profitable project based on the broad assumptions made. In future there is potential to grow with the markets and to make step changes in the value of the business through downstream processing.

A preliminary permitting study suggests that the project could be permitted with an Environmental Assessment (EA) rather than a lengthier Environmental Impact Statement (EIS). The time period from submission of a completed Plan of Operations to the receipt of all regulatory permits and consents is estimated at 9 months.

In July 2017 the Company announced the discovery of a third zone of pozzolan in the Northeast Zone.

Extract from CS Project Concept Study