RE:RE:RE:AGM results Erin Ventures eyes first boron in 2024
TSX-listed Erin Ventures finally appears to be making headway with its Piskanja boron project in Serbia after more than two decades off and on in the Balkan nation.
Exploration work was carried out on Erin Ventures' Piskanja licence in Serbia throughout the 2010s Erin began the lengthy permitting process for Piskanja - which holds an indicated mineral resource of 7.8 million tonnes (averaging 31.0 per cent B2O3), and an inferred resource of 3.4 million tonnes (averaging 28.6 per cent B2O3) - in February.
Erin's president Tim Daniels told
Mining Journal the first step in permitting was the certification of resource - on a par with a PEA - would likely be completed "by about September". After that, the company would move to securing the exploitation licence - achieved by submitting two pieces of data roughly equivalent to a pre-feasibility study - which Daniels said should take another 12 months. Finally Erin will submit the blueprints of its underground mining operations, for which the company is allowing another 12 months.
A two-year mine build would then put first production by the end of 2024, although Daniels conceded delays were possible.
"It's a little bit of a black box as to how long these steps will take because it's been so many years since it's happened in Serbia. There's not really any other models we can follow that have been through this process in the last year or two - you have to go back 20 years under a completely different regime and set of mining regulations to find the last time a new mine opened up that was on par with what we're doing," said Daniels.
Start up in 2024 would be 27 years after Daniels first entered the project under a partnership with Serbia's national power company.
Erin was forced to relinquish control of Piskanja to Rio Tinto in 2006 after a change in government. Another regime change, combined with a downturn in fortunes for Rio, saw Erin re-acquire Piskanja in 2010, this time as 100% owner.
Boron could be seen as an unusual choice for a junior such as Erin with a C$4 million market cap. The opaque market is 80% dominated from a production perspective by the Turkish government and Rio Tinto - split roughly 50/30.
The remaining production comes from a handful of smaller players, mostly based in Latin America. Erin is targeting a market share of around 4%.
Although boron is not a traded commodity, prices are high and stable: Colemanite - one of the main boron ores - sells at 40% purity FOB mine-site at €500/tonne and Daniels said Erin can extract and process the material "for about €40/tonne".
"That's the kind of margins the Turks have and Rio Tinto has…it's incredibly profitable for them," said Daniels.
"About three quarters of our deposit is sales grade today. So [we would] bring it up out of the ground, crush it, bag it and it's ready for market as is," he said.
Despite the drawn-out timeline, Daniels is confident the project is moving in the right direction. He said he was currently in "more than casual conversations" with a number of "different entities", including offtakers such as fertilizer and fibreglass manufacturers, mining companies and boric acid producers.
"Several of the potential offtakers we're talking to - the one thing we can offer them that they cannot get from Rio or Turkey is the opportunity to vertically integrate. We're absolutely prepared to have those discussions and in fact we are in those discussions and there are several companies such as fibreglass producers that are looking to secure their supply lines and are looking to integrate," said Daniels.
"We've had advanced discussions for a couple of years now with one of the largest consumer of borites out of Asia. They could absorb our entire production internally but beyond that they are the biggest distributor and reseller into the Asian markets, and the sort of capital requirement for the project - it's the crumbs off the table for them," he said.
Feedback on the deposit's metallurgy are positive.
"Metallurgically, our deposit is very similar to the material out of Turkey, and in fact we've had potential partners take bulk samples and process it and they come back saying in terms of their needs and their processing processes, our material is identical to the material coming out of turkey," said Daniels.
The current climate for junior financing is bleak, but Daniels suggested funding would be available.
"We've been talking with several different debt financiers and they are prepared to finance it and there is money specifically earmarked for Serbia.
"We've had a relationship for about four or five years now with IFC, with world bank, with the EBRD and Serbia is on their radar screen. They are frustrated because they have a big pool of capital for Serbia and not enough good projects to put it into and so they're very interested and keen in helping to finance this," he said.
Debt will account for around 70% of the project's capex, with the remainder from equity. Erin has done its own calculations around capex that it has not yet made public, but the equity component would be not far north of US$10 million - "not a big cheque to write for some of the big players in the industry today to secure the next 20 years supply of their borites".