SALT (Starved Acid Leach Technology)
Overview
The SALT process is applied to recovery of nickel and cobalt and other metals from laterite ores or residues from other processes. The two major economic targets are (1) saprolite ores that are below current cut-off grade for the conventional smelting process and (2) residues from the Caron process treatment of limonite/saprolite ores. The process is currently being tested via a bench and pilot plant program by Votorantim Group in Brazil. The Votorantim Group has purchased a 50% option for the rights to use the process in Brazil. The United States Patent Office has granted the Company a United States patent for SALT. Furthermore, patent applications have been filed in several countries for nickel laterite processing using SALT. Separate applications have been lodged with the national patent offices in Brazil, Cuba, the Philippines, Australia, Europe (including the French overseas territory of New Caledonia), Indonesia, Colombia and the Organization of African States. Search is exploring other global opportunities to use the SALT process.
Votorantim Group 50% Acquisition Interest For Nickel Laterite Extraction In Brazil
On August 9, 2011, Search Minerals announced that it had signed an agreement with Votorantim Metais Níquel S.A. and Votorantim Novos Negócios S.A., operating subsidiaries of Votorantim Participações S.A. ("Votorantim"), a privately owned Brazilian conglomerate headquartered in the city of São Paulo, Brazil, pursuant to which Votorantim will undertake testwork on the Company's Starved Acid Leaching Technology ("SALT") process. The testwork will be carried out at a pilot plant to be designed and assembled by Votorantim at Brazil's Centro de Tecnologia Mineral ("CETEM").
Under the terms of the agreement, Search has granted Votorantim the option, exercisable for up to three years, to acquire a 50% interest in the SALT patent if and when the patent is issued by Brazil's National Institute of Intellectual Property ("INPI"). Search filed a patent application in respect of the SALT process with INPI in early 2011. On exercise of the option, Votorantim would be entitled to an undivided 50% interest in the patent, which will entitle Votorantim to use and exploit the patent within Brazil in accordance with the terms of the agreement.
In order to maintain the option in good standing during the option period, Votorantim must fund the testwork to be carried out at the CETEM pilot plant and prepare a final report assessing the results of the testwork. Votorantim will also pay Search an advanced royalty of US$500,000 per year in the event that Votorantim constructs a process plant utilizing the SALT process at its Niquelândia or Cípo mine sites or its other mineral projects in Brazil. The advanced royalty payments are deductible against an annual 0.75% net smelter return payable to Search in the event Votorantim achieves commercial production using the SALT process at such projects.
If Votorantim exercises the option and acquires a 50% interest in the SALT patent, Votorantim will be entitled to a one year exclusivity period during which neither party may further license the use of the SALT process to third parties within Brazil. Subsequent to such exclusivity period, both Votorantim and Search will be entitled to further license the SALT process within Brazil, in which event, income generated from such licensing shall be shared on a 50/50 basis in accordance with their respective interests. If either party options or acquires a project within Brazil in respect of which the SALT process will be used, the other party will be entitled to elect to participate and fund its share of such project. In the event the other party elects not to participate, such party will be entitled to a 0.25% net smelter royalty on any production from such project utilizing the SALT process.
Votorantim's rights in respect of the SALT process are exclusively within Brazil and will not impair Search's rights to exploit the technology for its sole benefit in other jurisdictions.
Under the terms of the agreement, Search has granted Votorantim the option, exercisable for up to three years, to acquire a 50% interest in the SALT patent if and when the patent is issued by Brazil's National Institute of Intellectual Property ("INPI"). Search filed a patent application in respect of the SALT process with INPI in early 2011. On exercise of the option, Votorantim would be entitled to an undivided 50% interest in the patent, which will entitle Votorantim to use and exploit the patent within Brazil in accordance with the terms of the agreement.
In order to maintain the option in good standing during the option period, Votorantim must fund the testwork to be carried out at the CETEM pilot plant and prepare a final report assessing the results of the testwork. Votorantim will also pay Search an advanced royalty of US$500,000 per year in the event that Votorantim constructs a process plant utilizing the SALT process at its Niquelândia or Cípo mine sites or its other mineral projects in Brazil. The advanced royalty payments are deductible against an annual 0.75% net smelter return payable to Search in the event Votorantim achieves commercial production using the SALT process at such projects.
If Votorantim exercises the option and acquires a 50% interest in the SALT patent, Votorantim will be entitled to a one year exclusivity period during which neither party may further license the use of the SALT process to third parties within Brazil. Subsequent to such exclusivity period, both Votorantim and Search will be entitled to further license the SALT process within Brazil, in which event, income generated from such licensing shall be shared on a 50/50 basis in accordance with their respective interests. If either party options or acquires a project within Brazil in respect of which the SALT process will be used, the other party will be entitled to elect to participate and fund its share of such project. In the event the other party elects not to participate, such party will be entitled to a 0.25% net smelter royalty on any production from such project utilizing the SALT process.
Votorantim's rights in respect of the SALT process are exclusively within Brazil and will not impair Search's rights to exploit the technology for its sole benefit in other jurisdictions.
PT ANTAM (Persero) Tbk Sign Heads of Agreement for Salt Technology Processing Plant
Search and PT ANTAM (Persero) Tbk("ANTAM") (ASX:ATM; IDX:ANTM) have signed a Heads of Agreement ("HOA") to cooperate in developing a Starved Acid Leach Technology ("SALT") plant to apply the Company's SALT technology in processing low grade saprolite nickel ore from ANTAM's mining permits in one or more of Halmahera, Pomalaa or other mining projects located within Indonesia. Subject to satisfactory results of the parties respective due diligence and evaluation, Search will design, construct and operate the plant in Indonesia and ANTAM will commit to a long term ore supply capable of supporting a 30 year mine plan for each Indonesian project that ANTAM and the Company mutually agree on for the implementation of SALT, once proven. Subject to studies, the initial supply is anticipated to be approximately 2 million dry tonnes of ore per year. Nickel produced from the plant would be available to ANTAM at market pricing under an off take agreement. If ANTAM's refineries can feasibly extract any produced cobalt from the plant then the parties would transact for such cobalt based on market pricing and alternatively Search would be unencumbered in how it disposes of any such cobalt product in accordance with prevailing laws and regulations
The scope of cooperation in the HOA includes the following:
(1) Feed to the plant will consist of saprolite from ANTAM's Indonesian project(s) with nickel cut-off grades ranging from:
(2) upper cut-off: immediately below the cut off used for defining ore for ANTAM's own production of ferronickel; to
(3) lower cut-off: to be determined based on the technical and economic factors and mutual agreement by ANTAM and Search.
(4) Search will be responsible for all activities and bear all costs and expenses related to laboratory test work, pilot plant test work, pre-feasibility, feasibility and optimization studies with respect to the SALT process. ANTAM will be welcome to participate in the technology development activities (lab tests, discussions, etc).
(5) Search will also be responsible for the design of the plant and management of the development, construction and operation of the SALT plant. Search may, at its costs and with ANTAM's consent, employ ANTAM personnel at the SALT plant.
(6) ANTAM will be responsible for all activities and costs required to produce a JORC resource capable of supporting a 30 year mine plan.
(7) Where available and practical, ANTAM will provide Search, at Search's cost (based on arms-length market pricing, less any discount negotiated between ANTAM and Search), with access to and use of existing infrastructure including port site, roads, water, tailings disposal and space for plant and ancillary facilities.
The SALT plant will be owned and operated by Search. ANTAM will, however, have the right and option to acquire up to a 30% (or a mutually agreed higher) interest in the plant, which option will be valid and subject to exercise for a period of 6 months after delivery by Search of the definitive and bankable feasibility study for the project. The exercise price of the option will be equal to the product obtained by multiplying the percentage interest ANTAM elects to acquire by the aggregate estimated cost of construction and commissioning of the plant as set forth in the feasibility study. If ANTAM elects not to exercise the option, Search will be free to continue with the plant on its own, independent of ANTAM.
The scope of cooperation in the HOA includes the following:
(1) Feed to the plant will consist of saprolite from ANTAM's Indonesian project(s) with nickel cut-off grades ranging from:
(2) upper cut-off: immediately below the cut off used for defining ore for ANTAM's own production of ferronickel; to
(3) lower cut-off: to be determined based on the technical and economic factors and mutual agreement by ANTAM and Search.
(4) Search will be responsible for all activities and bear all costs and expenses related to laboratory test work, pilot plant test work, pre-feasibility, feasibility and optimization studies with respect to the SALT process. ANTAM will be welcome to participate in the technology development activities (lab tests, discussions, etc).
(5) Search will also be responsible for the design of the plant and management of the development, construction and operation of the SALT plant. Search may, at its costs and with ANTAM's consent, employ ANTAM personnel at the SALT plant.
(6) ANTAM will be responsible for all activities and costs required to produce a JORC resource capable of supporting a 30 year mine plan.
(7) Where available and practical, ANTAM will provide Search, at Search's cost (based on arms-length market pricing, less any discount negotiated between ANTAM and Search), with access to and use of existing infrastructure including port site, roads, water, tailings disposal and space for plant and ancillary facilities.
The SALT plant will be owned and operated by Search. ANTAM will, however, have the right and option to acquire up to a 30% (or a mutually agreed higher) interest in the plant, which option will be valid and subject to exercise for a period of 6 months after delivery by Search of the definitive and bankable feasibility study for the project. The exercise price of the option will be equal to the product obtained by multiplying the percentage interest ANTAM elects to acquire by the aggregate estimated cost of construction and commissioning of the plant as set forth in the feasibility study. If ANTAM elects not to exercise the option, Search will be free to continue with the plant on its own, independent of ANTAM.