Compare with the Mineworx Cehegin Iron Ore Project MCAP $34MCritical Issues with Mineworx Cehegin Iron Ore Project
- Mineworx Technologies Ltd. holds an option to purchase the Cehegin Iron Ore Project located in the Province of Murcia, in south-eastern Spain. However, contrary to the Company’s literature which inaccurately represents that the property is 100% owned. (Page 15) The option to purchase is subject to several conditions including a cash payment of €2,700,000.
- Contrary to the Company’s representations that the Cehegin project contains a historic resource of 25Mt to 30Mt of high-grade (65%) iron ore, the latest technical report filed on the property and prepared by Micon International in 2014, reports that the project contains total historic resources (from all zones) of only 7.4Mt. (Page 3, table 1.1) at a significantly lower interpreted head grade than represented.
- Contrary to the Company’s website and literature, which claims; “the iron ore from Cehegin has historically been a higher grade of 65% with low impurities…” basic extrapolation of technical report data, and historic reports by previous operators more accurately estimate the deposit’s average iron ore head grade to be approx. 35% to 40%.
- Micon further reports that by applying the historic 35% yield to concentrate ratio, they calculate an estimated 2.62Mt of high-grade magnetite concentrate (~65%) potential from the historic resources. (Page 3, table 1.1)
- The Micon report estimates that the overall project resource potential could reasonably be in the range of 25 Mt to 30 Mt., yet the Company’s literature, including their latest June 16th, 2021 Shareholder Update, and May 2021 Investor Presentation, claims that the project contains an estimated 101.27Mt of “potential reserves”. The classification of “potential reserves” does not exist under CIM definition standards and this estimate is strangely based only on a historic aeromagnetic survey. This update and the Company’s March 31, 2021 MD&A also claims that the current exploration program will “confirm the additional resources as CIM compliant reserves”, such conclusions are inaccurate and not reasonable, as there is no past or current data to support such claims, and such a declaration is in direct contravention of NI 43-101 guidelines, which stipulates that "all deposits classified as reserves, must be demonstrably proven to be valuable and legally, economically, and technically feasible to extract”. The MWX disclosure is also absent of mandatory verbiage describing the deposit’s tons and grade, the basis of the estimate, cautionary language, or the name of the Qualified Person.
- The Company discloses some select results of the current drill program on its latest shareholder update. The disclosure provides cursory details of several “successful” select drill holes and displays “visual evidence” of the iron ore contained in the drill core in an embedded video. This inadequate disclosure of exploration results is missing numerous mandatory CIM disclosure requirements and as such, does not meet the disclosure conditions of CIM. The disclosure omits several other items, including; QA/QC program description, proper reporting guidelines, cautionary language, and the name of the QP who prepared or supervised the exploration program.
- According to NI 43-101, Section 2.1, regarding technical oversight, the Company has failed to identify the Qualified Person (QP) responsible for the preparation or approval of all technical information provided on this material project since approx. 2014. The Policy clearly states:“ All disclosure of scientific or technical information made by an issuer concerning a mineral project on a property material to the issuer, must be based upon information prepared by or under the supervision of a qualified person or approved by a qualified person”.
- The Company’s latest corporate update and website details a positive economic assessment based on the project’s historic resources. They outline the assumed value of comparable iron ore concentrate, estimate production costs will be ~$53 per tonne, and report the estimated capital costs of the proposed concentrate plant will be approx. $1M. There were insufficient details provided to determine the basis of this preliminary economic assessment and had numerous disclosure deficiencies. The name of the Qualified Person responsible for the analysis was not disclosed. Economic projections which are based on only historic resource targets are in direct contravention of NI 43-101. The instrument clearly states: "… confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies."
- The extensive distance to the nearest port, plus the limited size and scope of the project, make the Company’s projected economic viability questionable. Even with high-grade iron ore concentrate prices at over $200 per ton, the nature of the resource, the estimated strip ratio, concentration ratio, mining and concentration costs, fuel & electricity costs, transportation & highway surcharge fees, port & shipping fees, brokerage fees, mine rehabilitation, and royalties may exceed the concentrate value.
- To be economically feasible, almost all iron ore projects typically require over 1 billion tons or more of high-grade ore and are located on or near tidewater. The Cehegin project has modest resource potential and is located approx. 120 km to the nearest port. The Company contemplates using 41-ton haul trucks to transport concentrates to port or rail. The Company’s proposed production rate would require these large haul trucks running 24 hours a day through the small towns in this picturesque region of Spain. Obtaining the requisite transport permits for this type of unusually heavy traffic would involve extensive local and regional public inquiries. It can be assumed, that the acquisition of the requisite permits would likely be difficult. Even though there is a sufficient 4 lane highway infrastructure to the port, the estimated 12 to 15 km’s distance from the mine to the Hwy or rail passes through many small villages. These narrow rural roads are mostly used for local traffic, small delivery vehicles, bicycles, tourism-related vehicles, and comparatively small farming implements.
- There are significant social and environmental objections to any type of mining in that region of Spain. The Iberian peninsula is a source of agricultural produce, a popular tourist destination, and a critical source of freshwater. Any potential threat to this sensitive ecosystem will likely make it difficult to gain the requisite permits. In a recent letter addressed to the President of the European Commission, over 134 local and environmental organizations expressed their opposition to an even less intrusive lithium mining project in Spain.
- Contrary to the Company’s statements, the current technical report outlines that there have been no detailed environmental impact studies. mine plan, preliminary economic assessments, baseline studies, groundwater surveys, or community or social engagement surveys completed and/or released by the Company that indicates or assures any level of future permitting. Micon also projects a minimum 3-year permitting process.
- Several high-quality iron ore-based mining companies are trading on the TSXV that have over 1 billion tons of high-grade qualified resources, and existing feasibility studies, yet they have market capitalizations significantly lower than the $34.3M MCAP of Mineworx. For example, Oceanic Iron Ore (FEO-TSXV) boasts 1.4 Bt of Measured and Indicated resource, 220 Mt of inferred resources, the project on Tidewater in Canada, the project holds a positive PEA, concentrate grade of 66.6%, and has an MCAP of only $14.1M, approx. 54% lower than MWX.
Based on the above conclusions, potential misrepresentations, multiple CIM disclosure issues, perhaps further due diligence and investigation by the shareholders, investors, and securities regulators are warranted. If you are interested in an early-stage iron ore company, consider Oceanic (FEO-TSXV)