Canadian Mining brings APL on board to run zeolite mining and distribution

By Myles McCormick
Published: Monday, 21 December 2015

Deal secures expertise and production capacity; company aims to bring Sun Group site online and predicts zeolite growth in animal and plant feeds, filtration.

TSX-V-listed Canadian Mining Inc. entered into a mining operations agreement and purchase option with Absorbent Products Ltd (APL) in November.

Under the deal, APL will mine, transport, process and package Canadian Mining’s zeolite, from its Bromley Creek mine, near Princeton, British Columbia (BC), Canada, before shipping it to customers.

Canadian Mining noted that APL – a privately-owned miner and manufacturer based in Kamloops, BC – has full mining and processing capacity.

"These people have been in business for 28 years," Ray Paquette, Canadian Mining’s CEO, told IM, referring to the company’s new partner.

The reason for bringing APL on board was two-fold, he explained; it has significant experience and know-how in the industrial minerals business and well-established processing capabilities – "these guys were nominated for four awards for excellence recently; they took three [and] they’ve a processing facility worth over $10m".

Such expertise is key in the zeolite business, Paquette said. "It’s not like shipping gravel from an open pit. It involves more than going in and drilling and blasting and shipping rock."

While APL organises production, Canadian Mining will be provided with a stable cashflow as it focuses on testing, certifying and qualifying its zeolite for expanding "green" markets.

Under the agreement, APL gains the exclusive right to acquire a 50% interest in both Bromley Creek and Canadian Mining’s Sun Group zeolite project in return for a payment of Canadian dollar (C$) 1.45m ($1.07m*). It will have the option to pay in cash or via an earn-in of C$9/tonne mined and removed ore.

Mineral zeal

Canadian mining has held the lease to the Bromley Creek site since 1994 and will retain tenure until at least 2030. It has a 50,000 tpa mining permit to exploit the deposit, which has a 350,000 tonne proven NI 43-101 resource within the lease area.

Paquette told IM that Bromley Creek "has enough to do what we need to do for the next four years", in which period it will continue work towards starting operations at the less advanced Sun Group project, 30km away. 

The Sun Group prospect, which the company has held since 2006, is substantially larger than its neighbouring site, with a yet-to-be confirmed resource of 46.6m tonnes.

Paquette said that such developments are starting to attract external funding. "[Investors] are beginning to understand," he said. "They are starting to move away from gold [and similar metallic commodities] to greener technology."

The USGS estimates that between 2.7m and 3.2m tonnes natural zeolites were produced in 2014, similar levels to 2013. Of this, the majority – between 1.8m and 2.2m tonnes – originated in China.

South Korea had the second largest output, at 230,000 tonnes, while the US took third place with 64,100 tonnes.

Growing opportunities

While a lack of construction activities as a result of continued economic uncertainty, mean global production is unlikely to increase rapidly in the short term, Paquette is optimistic about zeolite’s prospects.

"We get calls every day from people starting to be aware of zeolite and what zeolite does," he said. 

The company will focus on four main markets with the zeolite it produces: animal feed, compost, waste water treatment and zeoponics (a zeolite-based synthetic substrate used in plant nutrition).

"The size of the animal feed market alone is massive," Paquette said. "When you use it in feed supplement you increase (…) weight gain, giving you a healthier animal and less disease. And you have less methane."

Based on a permitted addition of a zeolite substitute consisting of 2-4% to feeds, he predicts millions of tonnes could be sold into this market in Canada alone on an annual basis. 

The popular move towards composting organics, meanwhile, he describes as "one of the biggest going concerns there is".

Zeolite can be used to capture and reduce odour emissions from composted material. "But it also adds benefit to the compost," said Paquette. "It takes in good and bad nutrients, returns the good ones and holds back heavy toxins."

Paquette is not the only one enthused about the zeolite market. John Lawrence, CEO of Montana, US-based US Antimony Corp., recently told IM that his company was "rapidly increasing production of zeolite to take advantage of the growing market".

He pointed to mine and oilfield remediation and synthetic turf as zeolite end markets primed for "substantial growth" over the coming years.

US Antimony produces zeolite at its Bear River property outside Preston, Idaho, where it had an output of 11,079 tonnes in 2014. Over half of its sales at present are into the animal feed sector, with water filtration, soil amendment, air filtration and snow and ice traction, in decreasing order of importance, accounting for the remainder.

A to zeolite

Zeolites are hydrated aluminosilicates of the alkaline and alkaline-earth metals.  According to the US Geological Survey (USGS), about 40 natural zeolites have been identified over the past 200 years, the most common being analcime, chabazite, clinoptilolite, erionite, ferrierite, heulandite, laumontite, mordenite, and phillipsite.   

A further 150 zeolites have been synthesised, of which zeolites A, X, Y, and ZMS-5 are the most common. 

The unique adsorption, ion-exchange, molecular sieve, and catalytic properties of both natural and synthetic zeolite have led to their commercial use. 

Natural zeolites are used in pet litter, animal feed, horticulture (as soil conditioners) and wastewater treatment. Synthetic zeolites, meanwhile, are used as catalysts, detergents and molecular sieves.

*Conversion made December 2016