| Dear Valued Shareholders:
This has been a “memorable” year for most of the world with many people anxiously awaiting the end of 2020 with the hope and aspirations that 2021 will be significantly better. With what appears to be a light at the end of the COVID 19 tunnel, many are viewing the upcoming year to be one with great promise and potential. The management of Mineworx shares this optimistic viewpoint and feels that 2021 offers the opportunity for great strides forward for the company and our shareholders. Diesel Catalytic Converter Project We are very focused on moving the catalytic converter project forward and we are on track. We anticipate the pilot plant’s initial process testing will be completed by the end of Q1 2021. As mentioned in the webinar, held in November 2020, the mobilization of the pilot plant to Tennessee will be undertaken in early Q2 2021 for production cycle testing which when completed will lead into a scaled up commercial production plant. Please click here for the presentation.
We have been building our project team as we continue to move forward with this initiative. Over the last year we have bolstered our fabrication team by adding personnel with chemical and process expertise. This enhanced team along with various 3rd party consultants, such as noted engineering firm Sacre-Davey have been successfully working together to ensure we meet our development objectives. Utilizing the company’s finalized engineering design work our team is currently sourcing, procuring, establishing quality control standards and commencing fabrication. We have been taking a multi-disciplinary approach to advance this project. This encompasses the chemistry, the process engineering & design phase, the fabrication, and project management stage, to ensure the scaled up plant meets our stringent standards. We are very close to being on schedule and will frequently update our shareholders on the pilot plant’s progress.
COVID 19 has had an effect, but not significant, on the early timelines for the catalytic project as travel restrictions to the United States have complicated the development work we had planned to do in Tennessee with our partner Davis Recycling. We have been working together via alternative solutions such as ZOOM, but the inability to work together on-site causes delays completing some of the planned activities. Both sides remain committed to the successful launch of the project in 2021 and look forward to a time when we can again meet in person.
For those not familiar with the catalytic converter marketplace a brief overview would be in order.
These parts are connected to exhaust outlets in diesel engines and utilizes Platinum Group Metals (PGM’s) to convert hydrocarbons, nitrogen oxides and carbon monoxide released into the atmosphere into less harmful carbon dioxide and water vapor. They simply act as catalysts in this process.
We view diesel catalytic converters as the “low hanging” fruit in the recycling industry, as they contain Diesel Oxidation Catalysts (DOC) and Diesel Particulate Filters (DPF), which are honeycomb shaped devices that contain PGM’s. They are difficult to process by traditional smelters as they cause processing issues and can damage furnaces. As such, smelters are beginning to impose restrictive penalties and fees on diesel filters, and many are no longer willing to accept them at all. Up to now recyclers have been able to combine a smaller percentage of these filters with their gas filter shipments, but the inability to do this going forward will create an even greater opportunity for us as we position Mineworx’s technology to be a unique solution for this problem.
A diesel catalytic wave is coming as DPF sales began in 2006 with the average recycle age being about 10+ years. Approximately 27 million catalytic converters are available as scrap annually which represents 80% of the world’s supply of palladium and 50% of the world’s supply of platinum. With less than 30% of these metals presently being recovered the potential market opportunity is enormous.
In addition, the ability to successfully recover these metals through recycling and reducing the need to mine these metals in the future will have a significant positive environmental impact on various fronts. Reducing future mining needs for these metals along with the ability to recover these metals economically and in an environmentally friendly way are the objectives we are striving to achieve. E-Waste Recycling I would like to address our 20% interest in the Surrey E-Waste recycling facility. We are anxiously awaiting an operational update on production, process efficiencies and current cash flow analysis from the managing partner, Enviroleach. The Mineworx fabrication work within the facility was completed in Q1 of 2020. The plant is a fully certified R2/RIOS facility with a capacity of processing 3,600 tonnes of Printed Circuit Board Assemblies (PCBA) per annum.
Disruptions to supply chains and logistics due to COVID 19 have resulted in the delay of commencing commercial operations at the facility; however there has been progress as recently announced supply agreement for Printed Circuit Board Assemblies (PCBAs) indicating the plant has the feedstock required to begin commercial production. We anticipate updated production news to be forthcoming early in the new year. Plant economics published on Enviroleach’s website show positive returns once production begins and will be significantly increased when the addition of tin and copper recoveries are included.
The commercial operation of this facility in 2021 is one of the positive developments the company expects to be able to announce shortly. Spain Iron Ore Exploration Projects We have been waiting for two years to obtain final approvals from the Mining Authority in Spain to begin a drill/work program on our 100% owned Cehegin iron ore property.
Here is some background on why we believe this property has tremendous value. The property was previously owned and mined by the largest mining and steel manufacturing company in Spain, Altos Hornos de Vizcaya, until the late 1980’s when they left the property due to economic conditions at that time. They worked on 4 of the 62 concessions and did 38,000m of drilling and processed 4 million tonnes of 65% high grade iron ore with extremely low impurities. A product highly sought after by steel mills.
We purchased the property in 2014 and were able to gather a tremendous amount of the historic drill and production data from their years of drilling and processing. This took us over a year to accumulate this information as it was archived throughout Spain in various government agencies. Glencore became interested in the property in 2015 and between their team of geologists and ours we planned the present work program in order to make the historical data NI 43-101 compliant as well as initiate further drilling to extend the concessions resource.
In addition, comprehensive economic analysis was done on all aspects of the surrounding infrastructure including road, rail, port, utilities, etc. as well as on mining operations and processing costs allowing us to build an economic model of the project which was completed in 2016. Our expectation is to hopefully validate a minimum 42 million tonne resource, but our economic modeling will be based on a conservative 15 million tonnes with a 11 year mine life.
We were able to successfully negotiate out of our JV Agreement with Glencore on the project so that it is 100% owned by Mineworx but have kept the Offtake Agreement intact. The terms are very favorable, with no minimum annual volume requirements for us, Glencore must accept all we produce for the life of the mine and at highly favorable pricing based on the current market spot pricing for iron ore.
Since that time we have conducted an aeromagnetic survey and have been granted the right to expand the size of the concession where mineralized zones appear to have extended beyond the original concessions. We have added extra drilling to the original work program, which began a cycle of new environmental reporting submissions due to some of the extensions being close to environmentally sensitive areas. This process has taken a tremendous amount of time and effort, and finally in early October we received final approval and acceptance on all of our submitted environmental studies.
Later in the month, the Mining Department classified the project as a Strategic Resource and since that time things have been moving at a more rapid pace. We have verbal confirmation on the work program approval and are just waiting for all documents to be signed and delivered. We are very excited with the potential of this project, especially considering the current iron ore pricing is around USD $150 per tonne. It has steadily been increasing since it hit a low at the end of 2015 of just under USD $40 per tonne. A formal strategic review is presently being undertaken to best determine the strategy that will maximize shareholder value in this project. We expect to have more information on this mid Q2 which will be communicated to the marketplace.
The status of the Wollastonite Project in Spain hasn’t changed in two years. We have the rights to the property, but have been unable to finalize a suitable agreement that would be advantageous to our longer-term interests. We are in no rush to proceed further with negotiations until it is in our best interests to do so. There is ongoing dialogue and we will keep our shareholders apprised of any further progress. Conclusion We have three projects that are extremely encouraging and 2021 should see a number of key milestones being delivered adding significant value to our shareholders. I am very enthusiastic about our future direction and view it with a great degree of optimism. As we begin 2021 and continue moving forward on our projects, we will obviously apprise the marketplace of our activities and achievements. On behalf of the entire Mineworx team, I would like to wish you and your families a joyous Christmas and Holiday season with a very optimistic outlook for 2021. |