Woodstock Project, New Brunswick

Through the acquisition of Buchans Minerals Corporation Minco has acquired a 100% interest in the Woodstock manganese deposit.

Based on historical exploration work, the Woodstock deposits are potentially one of the largest undeveloped manganese carbonate resources in North America. Woodstock, although still at an early stage, is believed to have the potential to be developed into a significant producer of Electrolytic Manganese Metal (EMM), which is used primarily in the production of stainless steel.

Worldwide demand for EMM has expanded significantly since 2000, particularly in China, and is expected to continue to grow. Over 95% of world supply of EMM currently comes from China.

The Woodstock project comprises 5,800 hectare near Woodstock, New Brunswick, Canada.

Based on historical exploration work, the Woodstock deposits are potentially one of the largest undeveloped manganese carbonate resources in North America. Woodstock, although still at an early stage, is believed to have the potential to be developed into a significant producer of Electrolytic Manganese Metal (EMM), which is used primarily in the production of stainless steel.

Worldwide demand for EMM has expanded significantly since 2000, particularly in China, and is expected to continue to grow. Over 95% of world supply of EMM currently comes from China.

Buchans Minerals Corporation holds a 100% interest in the mineral rights for the 5,800 hectare Woodstock Manganese property in New Brunswick, Canada.

The project has excellent infrastructure, including railway lines (16 km west) as well as the TransCanada Highway and major electrical transmission lines located less that 5 kilometres to the east. The Plymouth deposit is located less than 10 kilometres east of the US border and Highway Route 95 (an extension of US Interstate 95) passes less than a kilometre south of the deposit.

Historical literature indicates that the Woodstock property hosts three deposits of sediment-hosted-manganese-iron mineralization, first discovered in 1957 by Strategic Manganese Corporation. These historic deposits include the Plymouth and two Hartford deposits (North & South), located 5 kilometres west of the town of Woodstock.

In 1957, Strategic Manganese Corporation reported that the Plymouth deposit extends from surface to a minimum depth of 500 feet (152 metres) and hosts a historic, uncategorized resource estimate of 51.2 million short tons (46.5 million tonnes) averaging 10.9% Mn (manganese) and 13.3% Fe (iron). The Hartford North and South deposits are located less than 2 kilometres on strike to the north of the Plymouth deposit. Historic uncategorized resource estimates for the Hartford deposits by Strategic Manganese Corporation in 1957, were reported to include 50 million short tons (45 million tonnes) grading 8% Mn and 12% Fe at the North Hartford deposit and an additional resource of 50 million short tons grading 8% Mn and 12% Fe at the South Hartford deposit.

The historical reports indicate that the Plymouth resource estimate was compiled from data acquired from a total of 17,388 feet (5,300 metres) of drilling; the North Hartford resource estimate was compiled from data acquired from a total of 13 drill holes totaling 5,381 feet (1,640 metres) of drilling as well as gravimetric geophysical data, and the South Hartford resource estimate was compiled from data acquired from a total of 9 drill holes (footage undisclosed) as well as gravimetric geophysical data.

Quoted historical resource estimates are based on data obtained and prepared by previous operators. Buchans Minerals has not located the original assay sheets or details of the estimation methodology completed, nor has Buchans Minerals undertaken the work necessary to verify or classify the mineral resource estimate. Minco is not treating the historical mineral resource estimates as current resources verified by a qualified or competent person and the estimates should not be relied upon. Verification and classification of the Woodstock resources will require considerable further evaluation, the scope of which will be assessed during the Minco's Option Period.

Electrolytic Manganese Metal

Electrolytic Manganese Metal (EMM) is used primarily in the production of stainless steel. The EMM market has significantly expanded since 2000 when stainless steel production began to make use of EMM as a replacement for nickel, particularly in China. Since 2002 development of chrome-manganese stainless steel production has been swift, dramatically increasing demand for manganese and accelerating development of the EMM industry, particularly in China.

Worldwide demand for EMM rose from 250,000 tonnes in 2002 to over 1,532,000 tonnes in 2011, a 513% increase in nine years, with China supplying 97% of demand, primarily from manganese carbonate ores. EMM world demand is forecast to rise from over 1,532,000 tonnes in 2011 to almost 2,839,000 tonnes in 2021(an average increase of nearly 131,000 tpa) with the price predicted to increase from $1.53/lb to $2.30/lb over the same period.

It is believed that over 90% of Chinese EMM is produced from manganese carbonate ores. Processing of carbonate manganese ores has the advantage of eliminating the requirement for addition of a reducing agent to solubilise manganese in the leach, as is the case with manganese oxide ores. Mineralogical examination of 2011 drill core from the Woodstock deposit has shown that the manganese contained in Woodstock is primarily present as manganese carbonate.

The manganese content of manganese carbonate reserves in China is estimated at roughly 30 million tonnes Mn. The historic resource estimates for Woodstock are equivalent to a total manganese metal content of 12.3 million tonnes Mn and are potentially one of the largest undeveloped manganese carbonate resources in North America. Woodstock is believed to have the potential to be developed into a significant producer of Electrolytic Manganese Metal (EMM).

Hydrometallurgical Testing

In 2011 Buchans retained Thibault & Associates Inc., Chemical Engineering Consultants, of Fredericton, N.B. to complete a bench scale test program for development of a hydrometallurgical flow sheet for recovery of manganese on a representative composite sample of the Plymouth deposit. The recently completed test program was aimed at continuing to identify and optimize a leach process to extract the manganese from the deposit, as well as new tests designed to purify the resulting leach solution to produce an electrolyte suitable for the production of EMM.

The composite sample, taken from Buchans' 2011 drill program, had an average weighted grade of 11.07% manganese and 15.25% iron. The bench scale test program successfully demonstrated that, at optimum leach conditions, leach recoveries averaging 96.6% (range of 94% to 98%) could be achieved using a single stage sulphuric acid leach. In addition, the leach solution purification portion of the test program resulted in the production of a high purity manganese sulphate electrolyte, which is expected to produce high grade electrolytic manganese metal (EMM).

The leach process developed by Thibault & Associates for Woodstock is similar to that used on Chinese manganese carbonate ores, but with higher anticipated manganese recoveries.

An additional solution purification circuit employing solvent extraction to further purify the leach solution, with a view to producing EMM of exceptional purity, has also been successfully tested. Further bench scale testing of this process is required to optimize operating parameters and establish operating costs before this process can be considered for incorporation in the main hydrometallurgical process. Thibault & Associates recommended that the sulphuric acid leach, solution purification unit operations and electrolytic process be pilot tested to confirm these findings.

Manganese Project Evaluation

Buchans Minerals Corporation believes, and Minco agrees, that the opportunity exists to develop manganese carbonate deposits to produce EMM outside of China to meet the future demand from China and the rest of the world and that the Woodstock deposits have the scale and process characteristics to play a major role in this opportunity. Buchans wishes to advance the Woodstock project as rapidly as possible and, given the potential scale of the project, is seeking a partner to advance the project.

Minco has been granted the exclusive right, for a period of six months, to conduct a full evaluation and due diligence on the Woodstock property with a view to potentially entering into a joint-venture agreement with Buchans to develop the Woodstock manganese project. Minco has agreed to pay Buchans CDN$1 million for the exclusive six month option, and these funds will be used during the option period primarily for the advancement of the Woodstock project.

Based on the bench scale test program results a dynamic economic model which simulates the process flow sheet and quantifies conceptual operating and capital costs has been developed and will be evaluated by Minco during the Option Period. A treatment rate of 3,000 tonnes per day producing about 100,000 tonnes per year EMM over thirty years will be evaluated. A treatment rate of 6,000 tpd producing about 200,000 tpa EMM over 20 years may also be considered.

For further information please click here for re-direction to Buchans Minerals Corporation (a Minco subsidiary) website