"From our perspective, the toughest nut to crack was pilot phase, because pigment buyers have many demands such as particle size and calcium levels all within tight parameters," said Brian Flower, chairman of White Mountain.
The apparent recovery of the global TiO2 market, as evidenced by price increases announced for January by most major producers, bodes well for the Cerro Blanco project. While most TiO2 demand growth in the world is coming from Asia, much of the new global investment in production is being centered in China. However China holds no titanium reserves, so it will likely look to Chile for feedstock, according to Flower.
Over the next nine to 12 months, the company will complete in-fill drilling to confirm 100 million metric tons of measured and reserved ore sufficient for 20 years of production. The cost for this task will be approximately $2.2 million, Flower estimated.
Then, once product purchase agreements are in place, the company should be able to finance the estimated $165 million installation of a full production plant. The facility would handle five to six million tons of ore per year to produce 130,000 metric tons of high-grade rutile feedstock. According to the company's 10Q filing with the U.S. Securities & Exchange Commission dated November 9, 2009, the cost of the facility could be as high as $190 million.
The company holds approximately 165 million tons of estimated reserves and more than 33 registered mining exploitation concessions, covering 8,225 hectares located approximately 39 kilometers west of the City of Vallenar in the Atacama, or Region III. The rutile ore also contains high levels of feldspar, which may be co-produced into sodium feldspar. Up to 600,000 metric tons of feldspar may be produced depending on demand. The company has also considered three other production sites in Chile.
A pilot plant test work program was completed by AMEC-Cade, in Santiago, as White Mountain's principal engineering consultant. The consultant reported that electric power consumption was the highest single cost item, comprising approximately 31% of the total estimated unit operating costs. Process water for the industrial plant may be sourced from a desalination plant constructed at the port of Huasco. Other technical consultants to the project included Arcadis Geotecnica, Cytec Chile Limitada, by NCL Ingenieria y Construccion, SGS Lakefield and Centro de Investigacion Minera y Metalurgica Tecnologia y Servicios.
White Mountain is a publicly traded U.S. company, of which approximately 60% of the stock is held by U.S. citizens, according to Flower. In late December, the stock-WMTM.OB-was trading at more than $1.00 per share, near its all-time high of $1.06.