A Quebec company hopes to build an aluminum oxide refinery in Nova Scotia that would cost upwards of half a billion dollars and could employ 200 to 400 people.

“It’s not a small thing,” Richard Boudreault, president and chief executive officer of Orbite Aluminae Inc., said in an interview from the company’s Montreal headquarters Wednesday.

Orbite, which is building an aluminum oxide refinery in Quebec, has been granted an exclusive three-year option to acquire the mineral claims and exploration rights of the Chaswood kaolin clay and sand property from AlNova Mining Inc. of Bridgetown.

The Chaswood property consists of 163 claims on 2,608 hectares in the Musquodoboit Valley near the Maritimes & Northeast pipeline, which could fuel the refinery, and not far from the Port of Halifax, which could ship its products.

“Our vision is to build several (smelter-grade alumina) plants serving the northern Atlantic (area), including Quebec, the world’s third-largest aluminum-producing region,” Boudreault said.

“This option agreement allows us to pursue our objectives for growth while providing the potential to diversify the (smelter-grade alumina) plant locations and feedstock material within the wider region.”

Under the agreement’s terms, Orbite is required to make a $150,000 upfront payment to AlNova and to spend

$1 million developing the property by the end of next year to acquire a 100 per cent interest in the licences.

The company, which has significant aluminous clay holdings in Quebec, is also required to submit a technical report by the end of 2014.

If it decides to exercise the option, it must issue 2.4 million common Orbite shares to AlNova by Jan. 1, 2016.

Boudreault said Orbite has developed a clean technology to refine aluminum oxide, or alumina, the main ingredient in aluminum, from aluminous clay.

“There are no pollutants, no effluent.”

Boudreault said the Nova Scotia refinery would cost $500 million to $1 billion to build, but he said the company could afford it.

“It’s within our reach.”

However, he said much geological work and a feasibility study need to be done beforehand.

Boudreault suggested Orbite has two to three years of development work ahead of it, with initial activity beginning in the spring of next year.

“We need to drill. It depends on the snow.”

Historic drilling and seismic data on the property, which was explored in the 1990s by Kaoclay Resources, suggests a potential deposit containing kaolin-rich clay and silica sand about six kilometres long and more than 100 metres deep in certain areas, Orbite said.

The deposit consists of Cretaceous sediments, which typically contain 20 to 23 per cent alumina in kaolin-rich silty clays.

AlNova president John Wightman said the Chaswood deposit has “easily enough” material to feed an aluminum oxide refinery for 25 to 30 years.

Wightman said Orbite has already invested considerable resources in the project and has committed to employing local consultants and contractors.

“People don’t do things like that unless they have some serious intent.”

Natural Resources Minister Charlie Parker welcomed Orbite to the province.

“Their innovative technology for producing alumina and industry experience

make them a welcome addition to our business community.

“I look forward to learning more about Orbite’s plans as they work closely with government and communities to develop their project.”

Orbite stock was trading Wednesday for $2.63 a share on the Toronto Stock Exchange, unchanged from its previous close.