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Prima’s TSX Venture debut

April 19th, 2013

Prima Fluorspar advances a critical mineral in a safe jurisdiction

by Greg Klein

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Is this any time to join the TSX Venture? According to Prima Fluorspar Corp TSXV:PF president/CEO Robert Bick, his company’s April 19 trading debut comes at exactly the right time. He maintains Prima has a necessary commodity for a niche market, a big, high-grade, near-surface historic resource, a strong team with past success and the likelihood of future interest from some very big players.

For all that, fluorspar’s hardly well-known. Yet it’s all around us. The lower-priced metallurgical grade finds its way into iron, steel, aluminum and cement. As for the pricier acid grade, modern refrigeration wouldn’t exist without it. Most new medicines rely on its derivatives. An EU-designated critical mineral, fluorspar plays a crucial role in producing a wide range of products we’d rather not live without. As emerging countries improve their living standards, those societies will find fluorspar products increasingly important.

Purple fluorspar right at surface offers encouraging signs for Prima’s Liard project in B.C.

Purple fluorspar right at surface offers encouraging signs
for Prima’s Liard project in B.C.

That probably explains China’s export restrictions. It’s both the fluorspar world’s largest producer and largest consumer, in the latter role mostly as a manufacturer of goods for export. Last year the country produced 61% of global supply, according to the U.S. Geological Survey, a slight decrease from the previous year. Mexico produced another 17.5% in 2012, with third-place Mongolia offering a mere 6%, demonstrating the enormous imbalance in world production.

Prices, meanwhile, have climbed 225% between 2005 and 2012.

Despite China’s overwhelming share of production, the country’s expected to become a net importer within five years. As Simon Moores of the authoritative journal Industrial Minerals has explained, country risk was a major factor in fluorspar’s designation as a critical mineral.

Located in a friendly jurisdiction, Prima’s Liard fluorspar project looks all the more appealing. The northern British Columbia property holds 22,500 hectares along the Alaska Highway in a region that is, by B.C. standards, not particularly rugged. And there’s certainly fluorspar in them there hills.

Chemical companies absolutely need what we do and there have been companies in Europe in the past, for example Bayer, who actually did their own fluorspar mining. But chemical companies have no idea what exploration is all about.—Robert Bick, president/CEO
of Prima Fluorspar

Some 3.2 million tonnes grading 32% calcium fluoride (CaF2, also known as fluorite), according to an historic, non-43-101 resource. That’s a big, high-grade—albeit non-compliant—asset that the Prima team plan to prove up and expand. “With fluorspar projects, it’s very difficult to get such high-grade deposits,” says geologist Neil McCallum of Dahrouge Geological Consulting. “And most of the high-grade deposits out there are vein-type deposits where you might only have widths of one or two metres. So we’ve got pretty wide mineralization. What we tested was exposed on surface.”

The 61 historic holes found 20 showings, seven of them major, along a 30-kilometre strike potential. Prima’s preliminary work last fall tested two showings to find channel samples of 23.76% CaF2 over 19.55 metres and 23.49% over 74.55 metres. By spring or early summer McCallum plans to be back with a field crew doing geophysics and setting up a base camp prior to this year’s drill campaign of up to 100 holes and 10,000 metres.

“We’ll mostly do confirmation holes until we get the geophysical results. Then we’ll focus on building resources. What we’re aiming for is something that could be mined cheaply. Having something at surface that’s open-pittable will be important,” McCallum explains.

“With rare earths and a lot of the specialty metals, a project sinks or floats on the right metallurgy,” he adds. “But with most fluorspar deposits, it’s a fairly simple process.” Historic metallurgical tests brought results over 97% CaF2, the threshold for the more expensive, more highly demanded acid grade fluorspar, known as acidspar. More recent improvements in metallurgical science suggest even better results to come, McCallum points out.

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Overcoming country risk

January 31st, 2013

Canada Fluorspar and Prima Fluorspar develop critical mineral projects at home

by Greg Klein

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(Update: On April 19, 2013, Prima Fluorspar Corp TSXV:PF began trading on the TSX Venture. Read more here.)

When country risk threatens a vital commodity’s supply, it’s time to find new sources. And it’s because of country risk that fluorspar gained its designation as a critical mineral. Recent news from Canadian juniors, however, offers some reassurance for this widely used but less-widely known commodity.

Canada Fluorspar and Prima Fluorspar develop critical mineral projects at home

The rock looks almost too pretty to be practical,
yet fluorspar products are nearly ubiquitous in their uses.

So what is this stuff? Also known as fluorite and measured in calcium fluoride (CaF2), fluorspar comes in two grades. Metspar, or metallurgical grade, is used to make steel, aluminum, ceramics and glass, among other necessities. The higher grade and more highly valued acidspar, or acid grade, is largely used in hydrofluoric acid, which is used in hydrofluorocarbons (HFCs) and their successors, hydrofluoro-olefins (HFOs), used in coolants for fridges, freezers and air conditioners. Fluorspar finds its way into several other uses from pharmaceuticals to pesticides and toothpaste to Teflon.

Fluorspar customers can be formidable in size, including such giants as Alcoa, BASF, Honeywell, DuPont, Dow, 3M and Rio Tinto Alcan.

With China producing up to 58% of world fluorspar supply, a familiar story unfolds. The country has restricted exports to protect its own stocks, which the Chinese use to produce value-added products that the rest of the world needs. Mexico, Mongolia and South Africa comprise the planet’s other major sources.

Not surprisingly, country risk was “a huge factor” in the European Union designation of fluorspar as a critical mineral, says Simon Moores. A writer for the authoritative London-based journal Industrial Minerals, Moores spoke to ResourceClips in Vancouver while attending the Mineral Exploration Roundup Conference 2013.

Country risk actually works out to be “positive for the Canadian-based junior companies,” he says. “One of their selling points is having a stable, friendly country to build a new mine.” That doesn’t necessarily mean other supplies will replace China, he emphasizes. But the market needs diversity of supply as a long-term approach.

Hoping to provide some of that supply is Canada Fluorspar TSXV:CFI. On January 30 the company released an updated pre-feasibility study for its St. Lawrence fluorspar project in southern Newfoundland, a 50/50 joint venture with Arkema, a worldwide producer of chemicals headquartered in France.

Based on a fluorspar price of $500 a tonne and using a discount rate of 5%, the pre-feas projects a pre-tax net present value of $124 million and a 16.4% pre-tax internal rate of return. Should fluorspar average $550 a tonne, the numbers would change to a pre-tax NPV of $182 million and a 21.1% pre-tax IRR.

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Fluorspar for investors

October 23rd, 2012

A capacity crowd gets an essential perspective on this critical mineral

by Greg Klein

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A capacity crowd gets an essential perspective on this critical mineral

Over 200 people attended the Vancouver 2012 Fluorspar Pre-Conference Workshop aimed at investors.

(Update: On April 19, 2013, Prima Fluorspar Corp TSXV:PF began trading on the TSX Venture. Read more here.)

Since 2001 Industrial Minerals’ annual Fluorspar Conference has been touring the globe, bringing together producers and consumers of this widely used but apparently obscure commodity. What might distinguish this year’s Vancouver event, however, was the October 22 pre-conference workshop, which attracted over 200 potential investors. As the keynote speakers explained, fluorspar now tops the list of critical minerals and it’s irreplaceable in most of its uses. Shortages threaten unless new deposits are found and developed—and that, the audience heard, is exactly what some Canadian juniors are doing already.

Given the commodity’s low public profile, a quick Fluorspar 101 was presented by Simon Moores, a writer and Manager of Industrial Minerals Data for the authoritative journal Industrial Minerals. Miners report fluorspar (also known as fluorite) in percentages of calcium fluoride or CaF2. It can be processed into either of two grades. Metspar, or metallurgical grade, is widely used in steel making as well as ceramics and glass. About 60% of fluorspar production is acidspar, or acid grade, which starts at 97% CaF2 and is the most widely used, highly desired and expensive product, largely due to its use in hydrofluoric (HF) acid, one of the world’s most widespread industrial chemicals. “It’s the underlying and only feedstock raw material that feeds all these much, much higher-value products that some of the biggest industrial chemicals companies make,” says Moores. The list of applications goes on, but some of the most common include the coolants essential to refrigerators, freezers and air conditioners.

For most of its applications, fluorspar has no substitute. While North American chemical giants rank among the world’s consumers, neither Canada nor the U.S. currently mines fluorspar.

Simon Moores of Industrial Metals presented a Fluorspar 101 seminar to an October 22 Vancouver audience.

Simon Moores of Industrial Minerals presented a Fluorspar 101 seminar to an October 22 Vancouver audience.

Last year’s global production came to 6.3 million tonnes, with a drop projected for this year, Moores says. But as in other critical commodities, China looms large. “It produces 58%,” he says. “This has risen from 51% in 2006.” Although China’s not the biggest consumer of the high-value products, it’s the biggest end-user in the fluorspar production chain. “They’re decreasing fluorspar exports, they’ve also got resource taxes in place, so fluorspar is on their radar. Although it’s earlier days than graphite, ‘control’ is the underlying word for China’s approach.”

By factoring in the country risk of fluorspar producers, Moores points out, the EU assigns the mineral higher risk than graphite, lithium, cobalt, vanadium, molybdenum, tantalum, copper, zinc and titanium.

Although fluorspar prices have dropped a bit since January, “over 12 years it’s been price increase over price increase over price increase,” Moores says. “There was a 225% increase for acidspar between 2005 and 2012.”

Jon Hykawy, Head of Global Research, Clean Technologies and Materials Analyst at Byron Capital Markets offered some future projections. “We see very significant growth by 2017,” he says. “A large portion of that growth is in metallurgical applications, but more so in chemical applications. We see a very, very healthy growth in demand for acidspar, more than the Chinese can supply or other existing projects can supply through expansion.”

Hykawy sees 4% to 4.6% annual growth for basic uses such as catalysts, water fluoridation, glasses and ceramics, fluorine gas and steel manufacture. But the growth in fluorochemicals, he states, will be far more impressive.

“Chlorofluorocarbons [CFCs] were shown to be significant contributors to ozone depletion,” he explains. “It wasn’t the fluorine that was the problem, it was the chlorine.” CFCs were eventually replaced by hydrofluorocarbons [HFCs], a cause of global warming. “The current and best choice, and the chemical of the future, are HFOs, hydrofluoro-olefins—not a particularly more complex chemical, just different,” Hykawy explains. “CFCs are about 15% fluorine by weight, HFCs came in about 60% and HFOs about 67% fluorine by weight. So as you have a global economy that’s growing and increasingly using refrigerants, you also have an increasing proportion of fluorspar.”

As for fluoropolymers, “the one most of us knows is DuPont’s Teflon. It’s ubiquitous because it’s highly chemically and thermally stable. You can put it in frying pans, heat the bejeezus out of them and it doesn’t break down,” he says.

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