First Bauxite’s ‘Huge Vision’

VANCOUVER — There’s a new junior exploring for bauxite, the redcoloured rock that provides the world with aluminum. And the company is no shrinking violet — with support from a major, First Bauxite (FBX-V) has big plans for its large land package in Guyana.

“I came here to build one of the most prominent bauxite companies in the world,” says Ioannis Tsitos, president of First Bauxite. “I have a huge vision. We want to do it all: mining, processing, marketing, selling.”

Tsitos came to First Bauxite, which was then known as Academy Ventures, in early 2008 after 18 years at BHP Billiton (BHP-N, BLT-L). Soon after, First Bauxite acquired Bonasika, the holding company for Guyana Industrial Minerals (Ginmin). Ginmin, a private company, was incorporated in 2000 to explore and develop Guyana’s mineral resources and holds three large mineral titles: the Bonasika mining licence, the Waratilla-Cartwright prospecting licence, and the Essequibo- Demerara concession.

The Bonasika licence, which is around 4 sq. km in size, sits 75 km southwest of Georgetown and 30 km from the navigable Demerara River. The licence covers three adjacent deposits with fully permitted mining rights and an approved environmental impact assessment. An Alcan subsidiary outlined a 5- million-tonne historical resource for the three deposits grading 45% Al₂O₃ or better.

A recent National Instrument (NI) 43-101-compliant report on the properties only classified part of the deposit at Bonasika 1 as an inferred resource, specifically 340,000 tonnes grading 61.4% Al₂O₃. The report also acknowledged historical resources totalling 1.2 million tonnes grading between 57% and 60% Al₂O₃ across Bonasika 1, 2, and 5.

Over the past half year, First Bauxite has focused almost entirely on upgrading and expanding the Bonasika resources. At Bonasika 1, the company drilled 63 short sonic holes totalling 1,100 metres. The results outlined a 210-metre-long bauxite zone that is on average 8 metres thick and almost horizontal. The weighted average chemistry at Bonasika 1 came in at 55.6% Al₂O₃, 11.4% SiO₂, 1.9% TiO₂, and 1.9% Fe₂O₃. Overburden is generally less than 8 metres deep.

Within the Bonasika 1 zone, a high-grade, 4.8-metre-thick core carries 58.9% Al₂O₃, 6.5% SiO₂, 2.3% TiO₂, and 1.6% Fe₂O₃. Overburden covering the high-grade zone is slightly deeper, averaging 11.2 metres. First Bauxite intends to calculate a new resource at Bonasika 1, and then conduct further drilling to the north and south.

Initially, the company expected to release a new Bonasika resource estimate before the end of the year, but that has been postponed by drilling success at Bonasika 5. After completing its Bonasika 1 drill program, First Bauxite moved the drill to Bonasika 5, planning to punch a few holes into the ground. By the time the workers shut the drill down for Christmas holidays, there were 39 holes in the zone. The Bonasika 5 horizon is deeper than expected, with close to 30 metres of overburden, but the zone has been traced for 360 metres in length and is on average 10 metres thick. Tsitos said the resource calculation will now include results from Bonasika 5, assays for which have not yet been released.

As for the other two properties First Bauxite acquired through Ginmin, they are both considerably larger. The Waratilla-Cartwright licence is 10 times the size of Bonasika and lies less than 10 km south. Ginmin calculated a resource, which is not compliant with NI 43-101 regulations, of 28 million tonnes of metallurgical-grade bauxite, which means it grades better than 50% Al₂O₃. Within that resource, Ginmin identified a higher-grade zone comprising about 8 million tonnes that grades better than 55% Al₂O₃. The NI 43-101 report recognized some 15.9 million tonnes of historical resource grading better than 55% Al₂O₃.

At Waratilla-Cartwright, First Bauxite is following an 18-month, $2.2-million plan to take the deposit through feasibility studies. The plan envisions mining Waratilla-Cartwright as additional metallurgical-grade feed for an established alumina refinery in the region.

And the Essequibo-Demerara concession is much larger again — it covers 8,093 sq. km of prospective land along Guyana’s coastal bauxite belt. The concession, granted in late 2007, has a three-year life and Ginmin has to relinquish 25% of the area each year. The land does not contain any drill-tested bauxite zones, but numerous showings have returned promising grab samples.

Essequibo-Demerara is far too large for a junior to tackle alone, let alone a junior already focused on getting Bonasika drill-proven and ready to mine. So First Bauxite went looking for a joint-venture partner and found Rio Tinto (RTP-N, RIO-L). Before the deal to acquire Ginmin was even closed, First Bauxite granted Rio the option to earn a 51% interest in the Essequibo- Demerara property by spending US$8 million on exploration within four years. The major has the right to earn another 24% by financing another US$50 million worth of exploration and development.

“They’re looking for something big,” Tsitos says. “I mean, they want to find something like 250 million tonnes. But any exploration they do can only help us.”

Bauxite is usually found in tabular, near-horizontal deposits at or near surface. Most — 90% — of the world’s bauxite production is processed into aluminum, though there are non-metallurgical applications for the mineral, such as abrasives, cements and chemicals.

As such, bauxite is classified according to its end use. End use is determined by its percentage of aluminum oxide and by its grade of deleterious minerals, which for aluminum production are iron oxide (Fe₂O₃) and silica dioxide (SiO₂).

Metallurgical-grade bauxite requires high alumina content — at least 52% Al₂O₃ — and reactive silica content of less than 5%. Refractory grade bauxite carries the most rigid requirements — it must have high alumina content (better than 55% Al₂O₃), low iron oxide levels, and low silica content. Bauxite used to make aluminous chemicals must carry good alumina grades but can also have up to 9% SiO₂and 3% Fe₂O₃. Bauxite intended for use in abrasives must be 50% Al₂O₃; cement-grade bauxite need only contain 45% Al₂O₃.

To make aluminum, metallurgical bauxite is mixed with sodium hydroxide and heated under pressure. Through this process, called the Bayer process, aluminum dissolves as aluminate. The solution is filtered to separate ferruginous residue (red mud), then pure gibbsite precipitates on seeded cooling. To produce aluminum oxide, gibbsite is heated and reduced through an electrolytic process.

At presstime, First Bauxite’s share price was 87¢. The company has a 52-week trading range of 38.5¢-$1.12 and 40 million shares outstanding, 45 million fully diluted.