DAN UpdateAN UPDATE WITH JED RICHARDSON
(As of May 10, 2011)
Jed Richardson is the former mining analyst with Sprott
Securities and over the last few years, has been having a
lot of fun with the old Amazon Mining, the fertilizer play in
Brazil, now called Verde Potash.
He is also a director of Great Quest Metals (GQ), the fertilizer
play in Africa that’s has, over the last few days, attracted
a lot of attention because of rumored drilling success
on their gold project there.
But one story that he is intimately involved with right now
is D’Arianne Resources (DAN) so time to do a quick, little update
with Jed.
David Pescod: D’Arianne Resources closed its financing
last week and the seemed to respond well to raise, so I
thought an update may be in order. Now that the financing
is out of the way what sort of catalysts can investors expect
in the short term?
Jed Richardson: There’s going to be a considerable amount
of news flow out of the Lac à Paul project in the upcoming
months, starting with drilling news in the next couple of
weeks. A bulk concentrate sample is expected in June that
by all indications should demonstrate very high concentrations.
The summer should bring an updated resource in
August as well as a Prefeasibility. There is also some titanium
at that property, so the company is planning a Titanium
by-product scoping study by year end, which should
bolster the already strong economics at the project
DP: Sounds like a lot of activity. How long do you think before
there’s a plant?
JR: With a bankable feasibility study planned for early
2012, there is potential for plant commissioning as early as
2014. It’s important to note that this project already has a
completed scoping level study advancing to Pre-Feasibility
this summer, it is more advanced than a number of better
known projects that enjoy higher market valuations.
D’Arianne Resources
$1.30 -0.01
Great Quest Metals
$3.49 +0.24
David Pescod T: 780.408.1750 Debbie Lewis T: 780.408.1748 Fax: 780.408.1501 Page 2
DEB’S DITTY:
If the shoe fits
It’s ugly
DP: How does D’Arianne’s phosphate compare to the
grades at other phosphate projects?
JR: Not all Phos rock is created equal. Arianne’s head
grades are similar to grades at MBAC a TSX listed Brazilian
phosphate company, but MBAC has a much
smaller deposit and is not able to achieve the same
high grade concentrate. Arianne has an igneous phosphate
which starts at a lower grade, but concentrates to
39-40% P2O5. In comparison your typical sedimentary
phosphate ores start at 20% but rarely achieve concentrates
higher than 32-33%. Higher grade concentrate
means a higher potential sales price - the more P2O5
per tonne the better. Contaminants like uranium, cadmium
and radon are common problems with sedimentary
ores.
However, D’Arianne is free of all that because of the
nature of igneous ore. Phosphate is not only used as a
fertilizer in food production, it is also used directly as
an ingredient in certain animal feeds, and soft drinks for
human use so having contaminant free concentrate is
very desirable.
DP: So how do you think those factors will affect the
price Arianne’s phos rock should be able to command?
JR: Here’s a good way to think about it. The Moroccan
phos rock price is the global benchmark at about $170-
$180 per tonne at grades of 31 – 33%. So at 39% DAN
could expect to achieve upwards of $210 per tonne. To
put this in perspective the scoping study assumed a
concentrate price of $118/t and valued the project at
$440 million (NPV3%), the market valuation of the company
at today’s share price is just $72 million, and the
drilling the company is completing could materially expand
the resource.
DP: Thank you very much Jed