refurbishment & startup of the kearney graphite mine & startup of the kearney graphite mine...
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Refurbishment & Startup of the
Kearney Graphite Mine Presented at: Industrial Minerals 2011 Conference
October 2011
Toronto, Ontario, Canada
History of Kearney Graphite Mine 3
COMPANY OVERVIEW
Timeline
Graphite First Reported in Area
Prospecting & Mapping
Reserves Proved Up
Mill & Open Pit Construction
Operations by Cal Graphite
Cal Graphite Becomes Applied Carbon Technology
International Graphite Buys Mine
iCarbon Takes Over
iCarbon Becomes Ontario Graphite
Ontario Graphite Leading Reactivation Process
1979
1979 - 1981
1985-1986
1988
1989-1994
1993
1999
2006
2008
2011
Property Location
Mine Location:
The Mine is located in a politically stable, first-
rate country, and in close proximity to major US
graphite markets, representing dependable and
timely delivery for US customers and close
proximity to ports for shipment to European
customers
The property is located 300 km north of Toronto, Canada
and is accessible through the Town of Kearney via
Highway 11 and east on Highway 518.
From Toronto, there are approximately 270 km of four-lane
highway, 30 km of paved municipal road, 10 km of all-
weather logging and mine site road.
The surrounding area has significant mining industry
support, with mining and process equipment vendors, as
well as readily available skilled and unskilled labour.
Transportation costs are kept relatively low, and product
can be delivered directly to end-use customers.
5
COMPANY OVERVIEW
Mineral Inventory
Recent NI43-101 Technical Report indicates a mineral inventory on the
Kearney Mine property of 43.5 million tonnes of Measured and Indicated
Resources at average grade of 2.34% Cg, plus 12.3 million tonnes of Inferred
Resources at average grade of 2.42% Cg, based on a cut-off ore grade of
1.5% Cg
• At current mining plan throughput rate, the Property has more than 31 years of production
• The tonnes and grades of mineral inventories above do not include mine dilution or
mining recovery
6
COMPANY OVERVIEW
Mineral Zone Metric Tonnes Carbon Grade (%)
Measured & Indicated Resources
McGuire Zone:
Measured Resources 10,613,339 2.50
Indicated Resources 16,061,706 2.46
Total Measured & Indicated Resources 26,225,045 2.48
Sheehan Zone:
Measured Resources 7,662,505 2.14
Indicated Resources 9,618,875 2.11
Total Measured & Indicated Resources 17,241,379 2.12
Total Property Measured & Indicated Resources 43,466,425 2.34
Inferred Resources
McGuire Zone 9,740,410 2.52
Sheehan Zone 3,176,044 2.14
Total Property Inferred Resources 12,250,454 2.42
Kearney Graphite Mine Site 7
COMPANY OVERVIEW
Graphite Lake
McGuire Lake
Open Pit (now water-filled)
Waste Rock Pile
Minnow Lake
Mill Area
Mine Access Road
Tailings Area in narrow valley below mill
Tailings Pond
Tailings Dam
Cut-Off Trench
The McGuire West Open Pit 9
COMPANY OVERVIEW
The Open Pit is now water-filled
and displays water quality
equivalent to that of nearby lakes
Kearney Mine Agencies and Permits 14
ENVIRONMENTAL AND PERMITTING
Ontario Ministry
of Northern
Development,
Mines and
Forestry
(MNDMF)
Ontario Ministry
of Environment
(MOE)
Ontario Ministry
of Natural
Resources
(MNR)
Ontario Ministry
of Labour (MOL)
Environment
Canada
Town of
Kearney
Closure Plan
and Financial
Assurance
First Nations
and Public
Consultation
Mining tenure –
leases
Certificates of
Approval for
emissions and
discharges of
water, dust,
exhaust and
noise
Permit to take
water for
dewatering pit
and operational
make-up from
Graphite Lake
Plant septic
system
Tailings dam
structure
approval –
north starter
dam and raise
the existing
south tailing
dam
Species at risk
assessment
(SARA)
Water crossings
and roads
Timber cutting
on Crown land
Health and
Safety
standards and pre-development
review
Environmental
Impact
Assessment
(if project meets
impact triggers)
Building permits
What is Being Proposed After Closure?
Drain tailings pond and polishing pond, lime treat water
as it is discharged
Divert storm water from hillsides above tailings
Place evapotranspiration cover over now fully dry
tailings area and vegetate with local woody vegetation
Build an engineered wetland system below tailings
dam to treat percolating excess water
Open pit becomes a lake
15
ENVIRONMENTAL AND PERMITTING
Engineered Wetland System
Treat excess meteoric water after Closure
• Infiltration into dry, tree-vegetated tailings
Four basins operating passively
• Sedimentation Pond
• Successive alkalinity producing system
• Anaerobic biochemical reactor
• Aerobic wetland
All well-proven technology
16
ENVIRONMENTAL AND PERMITTING
Previous Production
Mining and mineral processing operations were undertaken on the property
from May 1990 through May 1994
The planned mine production and raw ore throughput rate of 3,000 tonnes (3,300 tons)
per day, or one million tonnes per year, was never attained due to a number of design and
operational bottlenecks in processing facilities.
These bottlenecks are known and well understood by the Company, and the start-up
capital and pre-production plan for the processing plant specifically target these
bottlenecks for correction and elimination in order to improve future plant efficiencies.
At the time that it was closed in May 1994, the Mine had achieved an annual run-rate of
10,000 tonnes per year at a weighted average of 94.6% Cg.
Based on test work and historical production records from 1994 operations, the Company
anticipates a Cg recovery in the concentrate of 85% during the first two years and 90%
thereafter, with a 94-97% Cg content in all fractions of the graphite mineral concentrate
product.
18
RE-COMMISSION AND PRODUCTION
Mineral Process Primary Equipment 20
RE-COMMISSION AND PRODUCTION
Area Previous Operations Refurbished Mill Circuit
Crusher 16' x 5' apron feeder Under evaluation
Crusher Allis Chalmer's 60"/48" jaw crusher Same - refurbished
SAG Mill 2 - vibrating syntron feeders 2 - Telsmith 36” x 15' apron
feeders
SAG Mill 18' x 9' Koppers SAG mill (removed) New 18' x 9' Bateman SAG mill
SAG Mill 5' x 16' Tyler Ty-level wet screen (removed) New Derrick screens
Flotation 2 - 144 cu ft rougher column cells Same – refurbished
Flotation 1 - 144 cu ft cleaner column & 1 36 cu ft cleaner
column Same – refurbished
Flotation 8' x 12' regrind ball mill Same – refurbished
Flotation 2 - 4' x 12' Derrick wet screens 3 - 4' x 12' Derrick wet screens
Dewatering Thickener tank - width 26' height 14' Same - refurbished rakes
Dewatering Vacuum pump filter (removed) New filter - to be selected
Dewatering Wyssmount dryer 24'H x 17'Dia (removed) New dryer - to be selected
Product
Sizing True-Balance sifter screens (removed)
New sifter screens - to be
selected
Packaging Paper and bulk baggers (removed) Bulk bagger - to be selected
Core Team Members: Management and Advisors 21
RE-COMMISSION AND PRODUCTION
Bobby Cooper Board Chairman Mining industry executive with
40+ years of diversified multi‐site experience with open pit and underground mines involving base metals, precious metals, coal, diamonds and uranium, worldwide
President & CEO Kennecott Corporation
Rio Tinto Global Mining Executive
Various senior positions with ARCO Minerals, Kennecott Corp., Arch Minerals and Kerr McGee Coal Corporation
Tom Myatt President and CFO 30+ years of senior level
experience in the mining industry with involvement in five start-up and re‐commissioning projects
CFOI Ancash Mining Ltd, base/precious metals (Peru)
President & GM of Rio Tinto Service Inc.
CFO and GM positions in Rio Tinto business units and operations
Jerry Janik
General Manager
20+ years industrial experience
including 7 years as GM of
industrial mineral operations
Area Operational Manager,
Carmeuse Industrial Sands
Plant Manager, UNUMIN
Canada’s Nepheline Syenite
Operations
Plant Superintendent and
Supervisory positions plus Quality
Control Supervisor for industrial
minerals plants
Duel degree in Geology and
Mineral Engineering
Ellerton Castor
Director of Strategy and
Corporate Development
15+ years in investment banking
and M&A advisor to variety of
companies in the U.S., Canada,
Europe and S.A.
Founder and Managing Director
Panterra Partners, LLC
Managing Director, Latin America
M&A and Merchant Banking Banc
of America Securities
Senior Associate Corporate
Finance & M&A Morgan Stanley
Stantec Consulting Environmental and Permitting Bill Steibel – Senior VP Jim Higgins – Closure Plan specialist Mina McCluskey – Water quality specialist and client rep. Piero Amodeo – Regulatory specialist; ex-MOE (18 years) Becma Engineering Engineering, Procurement, Construction Management Bob Mather – Principal; worked with OGL predecessor in 1990’s Hank Jenkins – Previously Chief Metallurgist at Kearney; very active in Canada Jr. mining co.’s
Miller Thompson Canadian Legal Counsel Dan Rothberg – Partner; mining industry specialist Sandra Gogal – Leading expert on First Nations consultation John Tidball – Certified specialist on environmental law
Edelman Canada Public Relations Jeanette Jones – Senior VP, Corporate Practice Leader Sarah McEvoy – Account Director
Kevin Murdock Sales and Marketing Strategy
Private equity investor having sourced, closed and managed various platform deals
McKinsey & Company: Global Business Building and Growth Practice, and Midwest Healthcare Practice
Professor of Strategic Management at Stanford Graduate School of Business
EPCM Process Review 22
RE-COMMISSION AND PRODUCTION
2011 2012
Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
Process Evaluation
Plant Inspection/Evaluation
Plant Process – Mechanical
Plant Process – Civil/Structural
Electrical and Control System
Construction Phase:
Civil
Structural
Mechanical
Electrical/Controls
Significant Competitive Advantages
Pre-production Period: The Mine will be re-commissioned at a low cost
within one year.
Operating History: The Kearney Mine operated successfully in the past, and has always been maintained;
thus the Mine and the majority of its processing facilities have been preserved in good condition.
Large Deposit in First World Location: The Property hosts large amounts of known Measured and
Indicated Mineral Resources conducive to inexpensive open pit mining in an easily accessible location in a
stable, first-world nation. This will help ensure stable and reliable long term delivery of product of consistent
quality to all customers.
Marketing History: Having been at one time a fully operations facility, the Mine enjoys the credibility of
having produced a product that is known and highly regarded in the marketplace.
Attentive and Focused Management: Current ownership and management are keenly aware of what is
needed to efficiently upgrade and re-commission the existing facilities to help ensure early and optimal
future processing operations.
Unencumbered Asset: The Property has no delinquent tax liabilities, environmental, health or pension
issues, and no ongoing litigation, social disputes or other liabilities that could delay start-up.
Uncomplicated Start-up and Operational Plan: The Mine will not require any specialized or prototype
equipment or processes for operations.
Easy Access to Skilled Labour: The Property is in a non-remote location, close to equipment suppliers,
construction services and skilled, experienced construction and operations personnel.
23
RE-COMMISSION AND PRODUCTION
Significant Competitive Advantages
During Production: Full production rates can be reached within one year.
High Quality and Full Service Capability: Based on past operations, sales records and laboratory
testing, the Kearney Mine will produce large flake, high quality, low impurity, commercially attractive
graphite product. In addition, the Company will be one of only two producers of natural flake graphite in
North America.
Direct Marketing to End-Users: Because of product quality, the Company will have the ability and
intends to sell directly to end-user customers rather than through blenders or brokers, thus allowing
better response to customers’ needs, stronger customer relations and higher margins.
Limited Direct Competition: There is no current natural graphite production in the U.S. and none in
foreseeable future. Currently, there is minimal production from two existing producers in Canada, both
nearing depletion of reserves. Two recently announced graphite projects in Canada are both still in pre-
feasibility stage and have not yet fully proven out their resource.
Competitive Operating Cost: Production costs will be very competitive with alternative producers’
delivered cost and the Mine will be better able to withstand price fluctuations in marketplace.
24
RE-COMMISSION AND PRODUCTION
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