Solid Resources' Spain-Based Projects Picking Up Steam, Signs Co-Op Agreement With Glencore
By Alex Létourneau of Kitco News
Monday October 21, 2013 12:30 AM
(Kitco News) -After a quiet spell with mining on the Iberian Peninsula, Spain has been seeing a reemergence of activity, highlighted by a major company throwing their hat in the ring.
Solid Resources Ltd. (TSXV: SRW), a Canadian junior mining company, announced a co-op agreement for joint due diligence with metals and mining giant Glencore Xstrata plc (LSE: GLEN) for Solid’s Cehegin iron-ore project, located in the Province of Murcia, in southeastern Spain.
The potential joint venture would give Glencore a 20% interest in the Cehegin project, with Solid retaining an 80% interest. Rick Gliege, Solid’s chief financial and chief operating officer, said Glencore showed “aggressive” interest in the project.
“I have to say that they were the most aggressive,” Gliege told Kitco News. “The infrastructure greatly attracted them, the location is right in their backyard and they want to increase their (iron ore) footprint by about 20% per year.”
The Cehegin project has history, as the project was operated in the 1970s into the late 1980s by Altos Hornos de Vizcaya, before the commodity crash in 1989 forced its shutdown.
“There’s a tremendous volume of historical data for us that we’ve obtained - 38,000 meters of drilling and production records,” Gliege said. “The production records will show that the ore can produce 65% to 68% Fe, with a very low impurity. So this is a premium product, no question.”
This was another factor that interested Glencore, as Gliege said that Europe has a higher standard of iron ore.
Solid is also looking to increase their land concessions to 6,600 hectares.
Gliege also said the abundance of infrastructure available at, and around, the project got Glencore’s interest.
“It’s connected by rail and a toll-free highway to the property, there’s only about a six kilometer rail spur that would have to be put together or it (iron ore) would have to be trucked to the rail station,” Gliege said. “There’s hydro on the property, there’s even an existing production plant on the property - its turnkey.”
Cehegin is also located 100 kilometers inland from the port of Cartagena on the Mediterranean Sea, a large port that can handle vessels up to 400,000 metric tons, volume that Gliege said exceeds the Solid’s needs.
At the opposite corner of Spain, Solid has another project, the Alberta-1 tin-tantalum-lithium property in Galicia, northwestern Spain.
“We have finalized our fourth, and last, drill program to the satisfaction of the Spanish mining authorities’ directives and have been verbally advised that we will get a mining permit,” Gliege said. “We’re just completing our environmental impact study and will be submitting an application for an exploitation permit within one month, which we anticipate being granted about a 1,500 tons per day operation.”
Gliege is bullish on the prospects of tin and tantalum, as he noted that both are short in supply and high demand.
“We’re going to target mainly the tin-tantalum because it’s easy to separate,” Gliege said. “We’ve completed our metallurgy - the recovery on the tantalum is 85% and on the tin is 88%, and that’s a simple gravity separation.
“The capex on this is going to be about $25 million,” he added. “There is existing hydro on-site and the paved roads going right to the port of Vigo.”
Alberta-1 is about 40 kilometers away from the port of Vigo on the west of Spain.
Gliege also noted that the further south the company heads, the grades of the tantalum increase by 50% and the grades of the tin increase by 20%.
To contact me regarding a story or feedback, please follow my Twitter account @alex_letourneau
By Alex Létourneau of Kitco News aletourneau@kitco.com
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