Positive feasibility study for wollastonite project

A positive feasibility study has been completed on Orleans Resources’ (ME) wollastonite property in St. Onge Twp., Que.

Kilborn Tecsult of Montreal carried out the study, which incorporated the results of pilot plant testing and intensive market studies. The deposit, situated in the Lac St. Jean area, has potentially open-pit reserves of 25.6 million tonnes grading 37% wollastonite. Although reserves are sufficient for 100 years of production, the report covers a period of 20 years, with a market penetration averaging 6% of world wollastonite consumption. At present, major producers have a market share ranging from 8% to 20%.

Wollastonite is a white crystalline mineral used as a reinforcing agent in plastics, building products, friction material and ceramics. It is also used as a flux material in continuous steel casting and as an additive in paint. Capital expenditures, including working capital and startup costs, are estimated at $29.9 million. The after-tax rate of return will exceed 27%, with a payback period of four years.

In Toronto, Orleans Chairman Jean Guy Masse recently told investors and analysts that his company is considering three financing options: equity financing, a joint venture, and a takeover. Whatever the choice, Masse says, “we’re looking to maximize shareholder value.

Environmental permitting is to be completed by December. Masse says it will take about 15 months to bring the deposit into full production. Orleans expects to employ 100 people during the construction period and 75 once the deposit enters commercial production. On a yearly basis, the operation is expected to yield 50,000 tonnes of material grading 99.3% wollastonite.