West High Yield magnesium: The friendliest element on earth?

By Myles McCormick
Published: Friday, 18 March 2016

TSX-V-listed WHY is developing the Record Ridge magnesium project in British Columbia. As well as plans for calcined and fused magnesia production at the site, the company sees opportunities for magnesium in batteries and lightweight metal alloys, which could gain traction as part of a wider shift to a greener global economy.

Canadian exploration company, West High Yield Resources Ltd (WHY), is a magnesium developer with its sights set on markets beyond the metal’s traditional uses in aluminium alloys, die-casting and titanium or its non-metallurgical magnesia applications.

"There are many new uses for magnesium, including magnesium batteries as a lithium alternate, liquid batteries coupled with solar energy storage techniques, automotive applications including car bodies, engines and parts, electronic devices and in the aviation industry," the company pointed out in its corporate presentation, designed to tempt investors to back its Record Ridge project in British Columbia.

In March this year, the company engaged in a Canadian dollar (C$) 5m ($3.75m*) fundraising drive as it enters the final stages of permitting at Record Ridge.

C$3m of this will be allocated to an environmental study and mine development plan, required by the environmental assessment certification and mine permit application processes.

The remaining C$2m is intended for use in the extraction and processing of two 10,000 tonne bulk samples of magnesium and gold, approved by the British Columbia Ministry of Energy and Mines last year, which the company expects to complete in mid-2016.

The magnesium sample will be processed using a new technology to produce 2,500 tonnes magnesium ingots, which would fetch around $4,000/tonne at current US prices, according to Frank Marasco, WHY’s CEO.

A preliminary economic assessment for Record Ridge, the results of which WHY released in June 2013, presumes a conventional open pit mine, a novel hydrometallurgical processing plant, a calcined magnesia intermediate product plant and a fused magnesia production plant.

Getting all the necessary approvals to take Record Ridge into production has been a lengthy process.

"We are finally seeing light at the end of the tunnel," Marasco told IM, noting that it has so far been through a 10-12 year permitting process to secure the licences it needs.

Marasco expects to be fully permitted within 18-20 months from receipt of the C$3m permit funding, which will include one year to write the required report, a six month government review and a two-month period of leeway to rectify any discrepancies.

Once this stage has been completed, construction is slated to begin on a four-plant electro-fused magnesia (EFM) processing facility, which will consist of an ingot plant, an oxide plant, a cement plant and a battery plant and would cost an estimated C$200m.

CoProfile1 
On the record: WHY drilling at its magnesium project in 2011.
West High Yield Resources 

Target markets

According to Marasco, the magnesium oxide (MgO) product produced at WHY’s plant could replace oriented strand board (OSB) and plywood in wallboard, while the magnesia-based cement it intends to make would be of a superior quality to bauxite-consuming Portland cement.

He added that magnesium-ion (Mg-ion) batteries had the potential to hold up to 12-times the energy of their lithium-ion (Li-ion) counterparts, which currently lead the market. Mg-ion batteries are not yet a commercial reality, but WHY’s remaining project development period leaves time for the technology to move forward.

The 2013 PEA gave Record Ridge a pre-tax net present value (NPV) of $1.339bn, at a 5% discount rate and an internal rate of return (IRR) of 21% over a 42-year mine life.

The property has a measured and indicated resource of 43m tonnes at 24.61% Mg, plus an inferred resource of 1.07m tonnes at 24.37% Mg. Record Ridge would also produce a silica by-product, which would provide WHY, which is listed on the Toronto Venture Exchange, with an additional stream of revenue.

WHY has already received a letter of intent for the purchase of up to 100,000 tpa magnesium ingot once Record Ridge enters production. Marasco said that the material is being bought for use in magnesium alloy-based manufacturing of rail hopper cars, which could cut down car weight by 10-30% from current levels, increasing net payload.

"We’re having a green revolution," he said. "Everyone’s going green and magnesia is the friendliest element on earth."

*Conversion made March 2016