Argex Mining's (CVE:RGX)(OTCBB:ARGEF) recent collaboration deal with PPG Industries (NYSE:PPG) was the subject of a
recent analyst note from securities and investment banking group Jefferies.
April, Argex entered into a technical collaboration agreement with PPG
to develop and optimize PPG's technology for titanium dioxide (TiO2).
goal is to develop a titanium dioxide product that can meet
conventional standards for interior and exterior paint and coatings
applications, to be produced by Argex.
"Recent discussions with Argex Mining shed light on the recent collaboration agreement for TiO2 with PPG," Jefferies analyst Laurence Alexander said in a note.
still in the pilot phase, Argex believes regional availability of waste
ilmenite tailings will enable a cash cost of around $1,000 per tonne,
with a capital cost of $60 million for its planned 50,000 tonnes per
"Such figures imply a payback of less than 1 year. We expect clarity on sources of funding around year-end."
is a junior Canadian resource company that is developing the advanced
stage La Blache titaniferous magnetite project, and also owns the Lac
Brûlé high grade ilmenite and the Mouchalagane iron ore projects, which
are all located on Quebec’s North Shore.
Argex recently achieved a
"milestone breakthrough" for the iron recovery circuit at its pilot
plant in Mississauga, Ontario, where its patented CTL process is running
The company hopes to scale-up its proprietary,
hydrometallurgical CTL process that allows it to produce high purity,
"pigment-grade" titanium dioxide (TiO2) directly from run-of-mine
material at its 100 per cent-owned deposit.
The process is running continuously at the mini-plant in Mississauga, Ontario.
ilmenite, from mining operations in Canada, should "noticeably lower
cash costs, capital costs, and start-up time" for PPG, the analyst said.
its solvent-based extraction technology, Argex's TiO2 cash costs could
be around $1,000 per tonne. This compares to current TiO2 prices of
around $4,500 per tonne in Europe.
"Such a grade of ilmenite
would also allow Argex's planned facility to produce as much as 50,000
tonnes per year of TiO2 for the same $60 million investment (the higher
grade reduces processing bottlenecks)."
Argex's estimated cash cost would save PPG $175 million assuming it
sources 50,000 tonnes per year of TiO2 at cost from Argex," the
Jefferies analyst said.
The Jefferies analyst sees pilot plant
production scaling rapidly but remains small at 3 kg per day. This
should increase to at least 10 kg per day by mid-June, which could help
Argex qualify its TiO2 for a variety of PPG's architectural coatings.
expects to finish its feasibility study for its full-scale facility by
year-end, at which point the company will assess funding options for the
expected $60 million capital cost, Jefferies' Alexander said.