Big River Gold is looking to turn what is usually considered a waste mineral into a potentially lucrative by-product from its Borborema gold project in North-Eastern Brazil. With mica-rich gold ore set to be processed through a conventional mill, a few tweaks of the processing flowsheet could see Big River pocket a windfall from its mica offtake that would normally find its way into the waste tailings dam.
The multi-million ounce gold project already boasts a definitive feasibility study that demonstrates a profitable, standalone development.
However, the ore contains around 30% “waste mica” by volume that the ASX-listed company says it may be able to commercialise.
Test work by an engineering facility in Germany on bulk samples of the ore has identified a simple, chemical-free, magnetic separation process to extract the possibly significant mica mineral. Mica has a remarkably wide, if little known, range of uses in electronics, automotive applications, paint, plastics and cosmetics.
The Centre for Research on Multinational Corporations expects the market for mica to reach nearly $US700m in 2024 and Big River said that the low cost route to extracting its pure mica only requires a minor amount of additional power. The company will now build some financials and capital requirements into its previously announced detailed DFS.
Borborema is dominated by two different mica mineral species – phlogopite and muscovite. The demand for phlogopite is estimated by global data firm, Statistica, to be up to half a million tonnes per year and it commands up to US$1000 per tonne, depending on the flake size and quality. Muscovite is also in demand globally with up to about 3Mt per annum required and is worth about US$500 per tonne at the higher end.
Borborema’s mica-rich gold ore is already set to be processed through a conventional mill and with just a few tweaks of the processing flowsheet, Big River is set to potentially pocket a significant windfall from its mica by-product offtake.
Big River has made no assessment of the mica content of the waste rocks at Borborema yet. It also said that there is about 500,000 tonnes of low-grade mineralised rock left behind from historical mining that could be potentially processed to extract the gold and the mica.
Big River has also identified ethical issues surrounding global mica supply as it looks to disrupt the market. A 2018 report by the Centre for Research on Multinational Corporations said that a quarter of the world’s mica supply comes from India where illegal, unregulated mines “employ” over 22,000 children.
Big River may just be able to provide a sustainable source of this mineral for the coveted cosmetics and electronics markets, making responsible sourcing a very real possibility for the big corporates.
Big River’s Borborema gold deposit has a brand new DFS on the street demonstrating the project to be a highly profitable, decade-long gold mining operation that could pay for itself within just two and a half years.
The Borborema operation could churn out at least 729,000 gold ounces over an initial, phase one, 10.2-year mine life.
The company used a conservative USD$1,400 gold price to produce its DFS and tabled an impressive all in sustaining cost of US$759/oz. Further DFS modelling shows the project has a pre-tax net present value of around AUD$320m.
Just last week, Pitt Street Research, a Sydney-based research house, broke Big River down into the sum of its parts and set a “base case” share price target of 9.4c a share for the Perth based company that is currently trading at 2.9c. Pitt Street’s “optimistic” case for Big River would see it achieve a price target as high as 15c a share.
Big River has already started identifying potential offtake customers for its bulk mica product and will provide these clients with samples to test. Meanwhile, the company will continue its own test work on liberating the higher-value phlogopite from the ore.
Additional income streams, particularly unexpected ones, can sometimes have big impacts on the economics of a project and the beauty of converting waste rocks to hard cash will not be lost on Big River supporters.
It remains to be seen if Pit Street Research will update its share price target for Big River on the back of this latest “waste to cash” test work.
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