DNI's Metals SupermineCanada primed for metal mining motherlode
May 17, 2010
By Judy Monchuk
Senior Editor
Troy Media
CALGARY, AB, May 17, 2010/ Troy Media/ – A junior mining explorationcompany with mineral rights to a motherlode of metals says Alberta isprimed to develop the world’s next super-mine, one that could keep theeconomy supplied with a steady stream of raw materials for the nextcentury and beyond.
Toronto-based DNI Metals Inc., (TSX-V: DNI) says mineral wealth fromits virtually limitless source of polymetallic shales can be capturedfor decades to come using an emerging and sustainable mining technologycalled bio-heapleaching.
DNI holds mineral rights in the black shales of northern Alberta’sBirch Mountains that stretches over 2,500 square kilometres. It’s northof Fort McMurray, adjacent to where the world’s biggest energy companiesmine oilsands. Mining the black shale could take advantage ofindustrial infrastructure built to harvest the tar-like crude oil.
Metal equivalent of the oilsands
“We have the metal equivalent of the oilsands,” says geologist ShaheSabag, president and chief executive of DNI Metals Inc. “We believethese deposits are as large as the oilsands, and that this can have aslucrative an impact on Alberta as the oilsands.”
Shahe Sabag
DNI’s metal resources are locked in rock with unique mineral andbiological components. The black shales are like time capsules,preserving history’s kill zones that form at times of major biologicalchange. They are filled with the residue of mass extinction andtremendous amounts of raw organic material that have been fused togetherby the pressure of being on an ocean floor.
Within these shales is a collection of base and precious metals thathas held Sabag’s interest for two decades. These are massive deposits ofmetals in relatively low concentrations whose origins date back 84million years, a valuable store that includes nickel, cobalt, copper,zinc, uranium, gold and silver. DNI’s geologists have also found in theshale lithium, molybdenum and vanadium, elements used in platingprocesses and products such as rechargeable batteries being developedfor the transportation and green energy sectors. They believe there maybe more than 20 billion tonnes of mineral deposits in the parcel, enoughto generate billions of dollars in revenue over the next century.
Until now, the low concentration of metals in the shale has made it uneconomic to recover through traditional mining methods.
“Prior to 2005, you couldn’t develop black shale deposits if yourlife depended on it,” Sabag says. But bio-heapleaching has made recoveryeconomically feasible. Bio-heapleaching takes advantage of the uniqueorganic and metal composition of the black shales to produce a cocktailof metals that can be captured, separated and brought to market in amost sustainable way.
As the 21st century dawned and climate change debates escalated,interests in the European Union began to look for cleaner, better waysto bring Europe’s metal assets to market. Bio-heapleaching is proving tobe the answer. The process involves crushing the metal-bearing rockinto large compost piles that steadily does its magic using air, water,sulphur and microbes to leach out minerals. It’s a low-cost alternativeto energy- and chemical-intensive mining, making it the cutting edge ofsustainable mining technology in the world.
Formerly Dumont Nickel Inc.
DNI used to be known as Dumont Nickel Inc. Its board recentlyapproved a name change to DNI Metals Inc. to reflect the polymetallicpotential of what Sabag calls the Alberta Black Shale Metals project. InApril, the company completed its first laboratory test program at theBureau de Recherches Geologiques et Mineres (BGRM) in France that showsthe effectiveness of bio-heapleaching. Sulphuric acid leaching tests inMarch showed similar signs that metals can be effectively leached fromthe rock in concentrations higher than 88 per cent in nickel, uraniumand cobalt. These tests are preparing DNI for its next phase, where it’sseeking major industrial partners that can help bring the projectthrough approval and production stages.
Technology that’s come of age
Tom MacNeill, president and chief executive at 49 North ResourcesInc. in Saskatoon, Sask., is excited with what could be unlocked innorthern Alberta and he’s backing his faith in DNI management as thecompany’s biggest investor.
“The metals are there. We know that the technology works and Ibelieve in the people moving this project forward,” says MacNeill.“Management of DNI has the vision and expertise that can shape thefuture of metal extraction in Canada.”
Bio-heapleaching was introduced to the world as recently as 2003,when it graduated from test-tube technology to field-testing. By 2008,it was put into production in Finland by Talvivaara Mining Co. toextract nickel, zinc, cobalt, copper and uranium out of low-grade orethat is similar to Alberta’s black shales.
“Talvivaara can operate when commodity prices are very low. It canoperate profitably when nickel is priced as low as US$3 a pound,” saysSabag, noting that when nickel prices dropped to US$5.50 in April 2009,the Vale Inco mine in Sudbury, Ont., announced an eight-week shutdown.“We are proposing an operation like Talvivaara’s. We won’t rely onmining one metal, because we have a polymetallic resource.”
Sustainable process
Traditional mining uses chemicals and extreme heat to recoverminerals from raw material. Mining companies need high concentrations ofthose minerals to make it economic to mine and must often dig deepunderground to reveal the stores they seek.
Bio-heapleaching is different. It takes advantage of the organicsthat Mother Nature left in the ground. Simply put, a solution is createdfrom bio-organisms that are harvested from the rock. When the solutionis dripped through the pile, it creates a chemical and biologicalreaction that dissolves the metals from the rock. The metal particlesseep through strainers into collection tanks and the compostingcontinues as long as new raw material and the bio-leaching solution isdripped through the heap.
Bio-heapleaching needs no power source and constantly recycles anynon-metallic liquids. It’s a process that leaves no wet residue.
The difference from traditional mining methods is striking. Residue,or tailings from “wet” mining processes, contains harsh chemicals suchas cyanide and arsenic, and is often toxic. Flue gases from smeltingalso have a negative impact on the environment. Bio-heapleaching hasnone of those ill effects. In fact, there are several eco-upsides tobio-heapleaching. To maintain the pH level of the heap, large amounts ofsulphur are consumed in the heap. Sulphur is a waste by-product ofrefining the nearby oilsands, and a bio-heapleach mine could consumethousands of tonnes of sulphur every year, cleaning it from theenvironment. DNI is also testing the compost to gauge its value as acarbon sink.
Deposit of the future
“I view black shale as the deposit of the future. Provided you canmine in large quantities, they have an incredible economic upside,” saysSabag. With mineral rights in six adjoining properties, “each of thesecould mine for 50 to 100 years. That makes eminent business sense.”
Michael Dufresne, an international mineral exploration consultant, isa believer in what DNI has located. Dufresne, chief executive ofEdmonton-based Apex Geoscience, studied the Birch Mountains black shalein the early 1990s and says it is the biggest metals resource in theprovince.
“That appears to be the most widespread and highest concentration,”said Dufresne, noting the shale is up to 25 metres thick and spread overwide areas. In the 1990s, low prices for base metals and low mineralconcentrations made mining there uneconomic. With offshore demand risingand today’s higher metal prices, the potential grows for metal miningin the Birch Mountains.
“With this new technology, DNI can look to previously non-productivemineral holdings as valuable metal-yielding assets,” said Dufresne.“There’s a huge amount of base metals, but a low concentration of anyparticular one. Mining just one would be uneconomic, but there are 10 ofthem.”
Dufresne knows metals mining is a tough sell in Alberta, where oiland gas rules. But that could be changing. The Alberta Chamber ofResources is conducting a study on how the metal mining industry couldcontribute to the Alberta economy.
Sabag says attracting a local partner to help develop the DNI minemay be difficult and interest from investors could be higher outsideCanada, particularly in Asia.
“The part of the world that lives off metals is not Alberta, it’s notCanada. It’s China,” Sabag says, pointing to a country that is makingmajor investments in Canadian resource plays.
DNI is continuing its technical and economic studies, having investedalmost $1 million so far to lay the foundation for Alberta’s andCanada’s new super-mine, one that could have profound impacts on local,national and world economies.