Advanced Explorations Inc. ADEXF

RE: RE: Preliminary Economic Assessment REALITY

[tour2best]

Your analysis is interesting but not accurate.  EAF process will of course use high quality scrap steel as its primary feed as the EAF process does not improve the quality of the steel (GIGO).  However comparing Fe grades as a definition of quality is not appropriate for pig iron, HBI/DRI or SPMs as feeds.  Nuggets can be used in a BOF but they are not appropriate for the blast furnace.  The more important issue is value-in-use: nuggets or DRI/HBI will attract a discount because they are less value in the EAF making process versus pig iron.  Scrap steel will remain dominant feedstock.  Forecasting price is always difficult, but it remains inappropriate to use a price three times the current price. New and as yet unproven technology remains a challenge.  Remember that AXI will need to import a reductant to make the nuggets.  This means coke, natural gas, etc.  Lastly the operating cost was internally generated by AXI, so it will by definition be optimistic.  As stated, there have been numerous iron making processes to replace the blast furnace as the primary iron making process.  To date this has not happened.  The Basic Oxygen Furnace and Electric Arc Furnace are the two dominant (97+%) steel making process.  Despite your optimism, the iron nugget process is umproven and as yet not commercial.  The only proven commercial process is  MIDREX and COREX, albeit COREX is a small pilt scale plant.  Can you suggest a single iron nugget plant currently operating?