An interesting approach to Direct Ship Ore (DSO) by High Gold Mining Inc in Canada is the concept of basically mining and simple crushing the ore to allow it to be transportable then loading it onto a barge / ship (in AW1 case) for offsite processing on the mainland or near a copper smelter. Hence avoiding the need for a processing facility on Somerset Island - less capital, lower environmental impact, easier permitting, simpler build, less labour, low risk and reduced time to production.
In Australia, we would call this 'toll treating' of the ore at an external processing facility or transporting the ore to a nearby or centralised processing facility capable of treating multiple satellite pits. The benefit of this is you pay a per tonne processing charge for upgrading the copper ore using an established mineral processing facility - it could be an Ore Sorter plant or a more robust flotation plant which could treat all ores derived from the Island over the longer term. This offsite processing plant could be near a major town or city (preferably near a copper smelter) hence making the supply of labour and mineral processing equipment easier for the company. A future partnership with a downstream mineral processing organisation could allow a long-term bulk commodity supply agreement to occur. Or AW1 could setup their own Ore Sorting facility to treat the ore on the mainland and sell to external metal traders.
The economic driving factor for Storm's ore would be the copper head grade being high enough to justify shipping and processing the unprocessed ore at an alternative location. Considering the ore is made up of copper minerals (feed for a copper blast furnace) and the gangue is dolomite (which can be used as a road base material, an aggregate in concrete and asphalt, a railroad ballast, fill-material, and in the production of bricks, blocks, etc) then in theory all the material will be consumed and payable as a final product if a remote Ore Sorting plant was utilised, eg. ensuring coarse particles are produced with no chemicals. Zero waste.
Disadvantages of processing the ore away from Somerset Island include,
Higher shipment costs for transporting everything (larger materials handling system),
Lower value product, raw material!!! This is not a high value material like gold ores,
Being at the mercy of a toll treater (their recovery rates & throughput),
Limited destinations capable of treating the ore (most likely via flotation to maximise metal recovery) & then smelting. Could be restricting sales to Chinese ports only.
This is a potential option which could move the project into production faster by avoiding the mineral processing infrastructure on the island!!!!!
What are your thoughts.
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Direct Shipment of Ore by barge, High Gold Mining Inc - presentation.
Given the 7.9 g/t Au head grade and small resource of 3.9 Mt it is worthwhile transporting the ore 386 km's to an established milling & processing plant.
An example of DSO product transport via a barge for Limestone
Reference: High Gold Mining Inc video. Refer to the timestamps on the above snip-its associated with DSO.
AW1 Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
