Difference Between Silica and Quartz and Silicon Metalin preparation of anzaplan results and then the resource estimate of RRS silica deposit. Dont confuse the terms ! especially a lot of confusion in investors minds between :
- Silica (SiO2 silicon dioxide, one atom of silicon and 2 atoms of oxygen)
- Quartz (the mineral quartz contains silica, like the RRS quartz deposit, containing 97% up to 99.98% of Silica).
- Silicon metal (only atoms of silicon, the oxygen is removed from the silica)
RRS will produce and sell Silica (feedstock material) NOT SILICON METAL. To produce Silicon Metal, you need metallurgical grade silica (99%+ silica) as feedstock, which then is combined with coal and wood chips and put all together in a high energy density elecrtical arc furnace to remove the oxygen from the silica.
Roughly speaking you need 3 tonnes of silica to produce 1 tonne of silicon metal.
Our neighbor Sitec sells metallurgical grade silica to a silicon metal plant in becancour (they produce 50.000tpa of silicon metal, so they need 150.000tpa of silica feedstock annually.
The main cost to produce silicon metal is by far ENRGY and then the the Silica feedstock material.
To extract silica as a silicon metal feedstock you need a deposit that contains high purity of silica lumps (40mm+ rocks of quartz) with some desired caracteristics (thermal and shock resistance) but very little capex requirements (less than 20million$), it is a straghtforward operation, you extract, you crush and wash and you sell. no beneficiation is needed. very low cost of opreations per tonne (50-65$ per tonne for a price that could exceed 200$ per tonne, just look at the margins here).
But to produce silicon metal, you need HUGE CAPEX REQUIREMENTS for a plant that costs 300Million$+ and the operating costs of energy are huge, think thousands of dollars per tonne, the silicon metal material is sold for thousands of dollars per tonne, its exact price depends on purity of final product. Silicon metal is used everywhere especially in high tech industries : electronics, microprocessor chips, photo voltaic cells,....etc
Anzaplan results are expected next week and will determine if our deposit has silica suitable or not as a metallurgical grade silicon metal feedstock. If this is confirmed, it is huge news, meaning we could get 200$+ per tonne for a good chunck of our deposit (the resource estimate will determine how much, 10% of our deposit ? 20% of our depsoit ? ). Of course there are a myriad of other uses for our silica, that is what anzaplan will tell us (ferrosilicon feedstock, glass and ceramics silica feedstock, fillers, construction...etc). The goal is for a minimum waste approach (sitec wasted/stockpiled 40% of their silica for more than 40years, they are now reusing the waste and sorting it to sell it for new product uses). We will have the benefit of Tomra sorting machines and electriciity from the beginning unlike Sitec which is a huge benefit in terms of capex, opex and margins.
Anzaplan results (end of april) will determine what we have and then the resource estimate (june) will confirm how much of it do we have and finally the PEA (in september) will reveal how economic it can be, and then we'll decide if we want to advance the project to prodcution by the end of 2016, while searching for customers and off-take agreements. Very methodical plan.
The main risk i see going forward is finding new customers so we dont compete directly with Sitec for the same customers (affecting the prices of our silica feedstock downward in the process). We want to expand the market not share it with Sitec. That is why i believe our partnership with Anzaplan and Tomra is very important, they could help us find new customers (anzaplan has a lot of contacts and good relationships in the industry, it is respected as the world leader for testing silica, so if they say our silica is good, then......
happy silica investing to all,