Tiomin proposes amalgamation with affiliate of Falconbridge

In a bid to raise financing for its heavy mineral sand deposit in Quebec, Tiomin Resources has proposed an amalgamation with publicly traded New Pascalis Mines (ME).

New Pascalis, 43% owned by Falconbridge, has been for sale for some time. The company holds royalty interests in two gold properties in northwestern Quebec, but is otherwise inactive.

Tiomin, a private firm, holds exploration rights to a large heavy mineral sand deposit on the north shore of the St. Lawrence River at Natashquan, Que. Covering approximately 208 sq. km, the sand contains magnetite (iron), ilmenite (titanium), zircon and garnet. Tiomin plans to conduct a full-scale feasibility study, estimated to cost $3.5-5 million, to determine the deposit’s economic viability.

Tiomin President Oliver Lennox King, a former mining analyst, says the property has undergone extensive testing over the past 30 years, but only for its iron potential. In 1977, an independent consultant determined that an iron ore operation would be economical.

Since acquiring the property in 1989, Tiomin has expanded the size of the claim group from 54 sq. km to 208 sq. km. The company hopes to exploit one day the heavy minerals, which represent 6-10% of the sand deposit, using a combination of magnetic, gravity and electrostatic separation. “The more we see of it, the more we realize how similar it is to other mineral sands projects in Australia and South Africa,” King says. Tiomin has arranged a private placement of $2.5 million for general working purposes and expects to raise the project financing once it becomes a public entity.

Titanium, the main component of ilmenite, is used as a pigment in paints, fillers and plastics. Zircon’s highly reflective properties make it a significant ingredient of furnace bricks. Garnet is beginning to develop a new market as a non-hazardous replacement for silica in sand-blasting operations.

Ilmenite sells for about $60 per ton in concentrate form. Zircon can command prices of $200-250 per ton while high-quality garnets fetch up to $200 per ton.

King says one of the main goals of the feasibility study will be to determine whether there is a market for the Natashquan heavy minerals. “Unlike gold or copper, the marketing is very important with these products.” Under the terms of the proposed amalgamation, New Pascalis shareholders would receive one new share of the amalgamated corporation for each three New Pascalis shares currently held. The amalgamated corporation will be called Tiomin Resources.

The merger is subject to regulatory and shareholder approval. Meetings to vote on the amalgamation will be held Sept. 15.