The Magic Pudding Returns

There are a few natural laws. Conservation of energy. Conservation of matter. What goes up must come down. Pretty normal stuff.

Some lesser known laws of nature include droll drudgery such as;

1. That which you dig out of a hole cannot be fit back in it. Physically. Hence why you have waste dumps.
2. It costs more to do something tomorrow than today. As likely caused by inflation as it is procrastination.
3. The sum of the parts is less than the whole. This applies most notably to living things you care about, like children and pets
4. Nothing is 100% efficient.
5. You cannot make money off all the parts of the whole.
6. Almost any rock on earth has more value in alumina (expressed as 99.99% HPA) or silica (as 99.99% HPS) than any other component.
7. Metallurgical scams still exist

The Sums Of Parts

The value of a human body is worth about $1 for the constituent elements, $3.50 of leather, and up to $550,000 if you hock all your organs. Much like a rock. This bounty is unequal, since only a blind person would want my eyes, and as time goes on the value of geologist liver diminishes at a greater rate than other livers. But you get the gist; chopping something up into its parts, summing up what it's worth, then concentrating on the most expensive bits, is specious logic even if you want to engage in organ harvesting (alleged behaviour in certain North Asian prisons aside).

This is true of a rock. 1 tonne of your average Yilgarn tonalite contains 150kg of Al2O3, which is worth a lot more than 1 tonne of gravel, even if you buy said gravel by the 20kg bag at Bunnings.

When we come to metallurgy, however, this thinking is often hit with the Uno Reverse card, and we end up with one of what I believe to be the great metallurgical scams of the modern age. OK, maybe not a scam or a fraud, in the strictest sense, but a fallacy nevertheless.

I call this the Magic Pudding Fallacy.

The Magic Pudding, according to Lindsay (1918), is a magical terrine comprised of an animated pudding bowl within which is a steak and kidney pudding which never runs out. You can carve off what you want and it magically replenishes. We won't deal with the bulk of Lindsay's treatise as it pertains to pudding thieves and the law, for in that route lies brambles and trickery.

Always room for a bit of pud

There's a few summaries of what constitutes a mining scam (eg; Warren, 2018, interview transcript). Maybe greasing up your PEA assumptions is a scam or just being overly optimistic. Maybe conveniently ignoring penalty elements is a scam, or it's just poor due diligence. Maybe neglecting to mention the national park on top, things like that. It's dodgy, yes, but it isn't a scam (swapping something for nothing). But there are a few classic ones which are hard baked scams.

One of these classic scams is adulteration, or salting core. Bre-X, for example. Definitely fraud. We learn about that, about De Guzman, helicopters, etc. We have systems in place to prevent that now.

Another metallurgical scam is the "mysterious assay technique which finds gold in rocks that ain't usually full of gold" scam. Think Haoma Mining and all its troubles. BBX Minerals, for all its troubles, had the look of this for a long time. The latter rather than the former appears a more genuine, if very odd, thing. Either way, the adjacency of this sort of assay difficulty to classic metallurgical scams is painful enough and causes a lot of caution. Rightly so. If only you can extract the metal from the rock, who can check your results?

But the latest....fallacy is the Magic Pudding. Here, as mentioned previously, you get a rock, and divide it into its component parts, calculate them at their most valuable possible combinations, and then chuck them in a vat of acid to supposedly get them out.

Again, your average granite is 15% alumina. On paper, that could be worth a lot. Other rocks have even more. I'll just pick the rock anorthosite for no apparent reason It contains, from an average of 25 GSWA samples of anorthosite; 24.4% Al2O3, 18.4% CaO, 4.1% Fe2O3, 0.49% K2O, 2.84% MgO, 3.28% Na2O, 51% SiO2, 0.36% TiO2, 0.15% V2O5.

Just by random happenstance, Surefire Resources Limited (SRN) recently published a 38Mt @ 23.3% Al2O3 resource in anorthosite, apparently. Not far off average GSWA composition.

24.4% Al2O3 when priced at HPA's price of US$24/kg is roughly US$5,850 of HPA per tonne of rock, on paper, if only you can get it out. That's a clear enticement to try.

Here SRN's anorthosite is sandwiched between a lower V-rich titanomagnetite layer and an upper Ti-V rich titanomagnetite cumulate layer. These collectively comprise the Victory Bore vanadium deposit, which is the main game, and the anorthosite is the cream in the Oreo, so forms interburden.

The magic in this Oreo of VTM is that Surefire says the anorthosite forms a resource of alumina, which as one knows because one studies the JORC Code (2012) closely, must include Reasonable Prospects of Eventual Economic Extraction (RPEEE), and in this case it is predicated upon 2N alumina test work (99.8%) via Lava Blue (a metallurgical workshop that has technology in this space). Whether or not 99.8% is actually High Purity Alumina is up for debate, being two N's away from it, and whether or not the anorthosite can be converted from interburden to ore is to be determined. But the beer coaster has been flung down, the figures were scrawled upon its back, and the dollar signs roll across the eyes.

This illustrates a common theme in the metallurgical space of late, of reading a list of elements off, and turning to the assay x nominal price and creating "opportunities" out of, frankly, rocks that don't often come to mind.

Note that I have considered anorthosites as feedstock for HPA in the past (you can tell since I can supply the peak Al2O3 from the GSWA database at the drop of a hat), but tenure ownership was a major embuggerance, and the fact it's a silicate (anorthite), and full of calcium and sodium, is the second major embuggerance. SRN's, it seems, probably also suffers from interstitial titanomagnetite/ilmenite; not a major issue, but an issue nevertheless.

More of the Same

I am picking HPA as an example of Magic Puddings because alumina is a very common element, and in high purity, worth a lot of moulah. As an aside, I'm discussing alumina because I work in the HPA space, so I know a thing or two about this issue.

SRN's opportunity is very straightforward thinking: taking plagioclase which has been almost perfectly purified by magmatic processes and extracting the 23+% Al2O3 from it, seems obvious enough.

But there are other puddings out there with alumina (HPA) contributing to the pud which aren't so obvious. This is because aluminium is a bit overly eager to enter an acidic solution, and it's ubiquitous in most rocks that aren't monominerallic (or limestone, etc).

Lets take say, King River Resources (ASX:KRR) which had the Speewah VTM deposit, now held by TiVan Ltd (ASX:TVN). A cool 4Gt of rock with 0.30% V2O5, some 14.7% Fe, 3.3% TiO2, all in magnetite bearing gabbro. KRR was investigating extracting vanadium, via magnetite concentration and roasting, from Speewah. The VTM roast side of things I won't discuss, but suffice to say, when conventional metallurgy doesn't succeed, you turn to hydrometallurgy.

Hydrometallurgy creates a solution for your problem, but that solution isn't always easy to deal with. Badum-tish.

In the case of acid leaching of titanomagnetite ores, one problem is getting aluminium away from vanadium (and iron). They are all in the 3+ ion club. This is true for the salt roast method too, funnily enough, which is why you need to make a monominerallic concentrate of magnetite with as little feldspar (aluminium) as possible, to avoid slagging, clinkering and robbing of the Na into Na-feldspathoids in the roast, or in the PLS, Al contaminating the V2O5 products. Anyway, a lesson in vanadium metallurgy.

However, to deal with the aluminium (running something like 12% in Speewah), you have to precipitate the alumina. Which creates, as if by magic, a relatively pure aluminium precursor. Depending on the acid you use, it's an alum salt or aluminium hexachlorohydrate (ACH). 99.8% is close enough to 99.99%, you'd think, so your metallurgist leans over and mumbles

"12% times $24/kg is better than your vanadium at 0.44% x $15/kg". Bazinga.

The dollar signs in your eyes light up, and away you go. KRR, during it's sulphuric bath phase, also claimed it could precipitate Fe, Al, V, and maybe even something else, I can't recall. All products to be made from the various components of the ore.

But could they though? Seems almost magical that you can extract everything and make money off of everything.

Nickel and Dimes

However, let's leave KRR's acid bath process alone, before it gets too grim. This Magic Pudding behaviour in creating alumina juniors has a strong streak with other hydrometallurgical processes turning honest hard-working (or barely functioning) nickel laterite processes into HPA processes, via essentially the same process.

In the Ni-Co laterite space, you start with some ferricrete scunge with ~1% Ni, 300ppm Co, and chuck it in a vat of acid. In the case of PUA (now Peak Minerals) in days of yore, plus at least three other listed entities looking into hydromet on Ni-laterites, these laterites have somewhere between 3-11% Al2O3, in clays. You chuck the ore in a vat of acid, and dissolve a bunch of metals into the PLS.

Aluminium needs to be stripped out of the PLS before you precipitate your Ni hydroxides or MSP or whatever you prefer. In the HPAL space, this occurs at high-T and high-P as jarosite and Al-sulfate precipitates. In the low temperature leaches, Al is stripped out via neutralisation with MgO/CaO, which leave Ni in solution. When you precipitate the Al-sulphates, you end up with a relatively pure aluminium sulphate salt, probably around 99.8%.

So your metallurgist leans over and mumbles

"9% Al2O3 times $24/kg is better than your nickel at 1% x $18/kg". Bazinga.

What in tarnation?

QEM Limited, a vanadium-in-alginite developer from the Julia Creek area in Queensland, is also charged with indulging in Magic Pudding talk, for a while at least. They are leaving these 'by-product' talks aside for the moment.

Here, 0.31% V2O5, in oily algae shale, is subjected to, depending on the choice du jour, acid or alkaline leaching.

In the acid route, obviously, you start off with north of 20-25% Al2O3, and it comes out with the V2O5. As in the salt roast process, aluminium is an embuggerance to vanadium, so you precipitate that out of the circuit as a sulphate, and it probably drops out at 99.8%+.

So your metallurgist leans over and mumbles

"20% Al2O3 times $24/kg is better than your vanadium at 0.44% x $15/kg".

Plus there was some mumbling about REE's. For now, they remain focused on the V2O5 and oils.

REE-haw!

So anyways, since we're here talking about clays and acids and REE's, aluminium in the PLS is a problem for what? REE's! What do we do about it? Precipitate it out as aluminium sulphate or ACH!

Given most REE clay deposits are looking at HCl or H2SO4/ammonium sulphate elution of "ionic" bound REE's, there will inevitably be some aluminium nuked out of the clays during the leaching process. My knowledge of this says generally 15-54% alumina recovery (more if you concentrate on leaching alumina) from hydrous kaolin.

So your metallurgist leans over and mumbles

"38% Al2O3 heads, at 15% recovery, is 6% nett alumina recovery at $24/kg, which is better than your REE's at 0.15% x $22/kg basket price on them REE-thingamawhatsits".

ITech minerals (ITM), has mentioned HPA in the same sentence as REE's from their kaolin. I belive there's also been the talk of sucking the REE's out, then press filtering the kaolin, and selling the kaolin.

This, too counts as Magic Pudding, because I for one, haven't seen anything to date to suggest their acid washed kaolin meets spec for anything. It might, of course. But it's far easier to talk about the potential in the pudding bowl than prove it before opening your mouths.

Red Mud Redemption

Resource Development Group (RDG), the garnet miners from Gerro, are plunging a million plus change, into a UK based venture into treating red mud tailings from Bayer process treatment of bauxites. The Bayer process is NaOH leaching of bauxite, where alumina is recovered as boehmite/bayerite, leaving a toxic alkaline, sodium-aluminate soaked bright red hematite sludge that is one of the world's most noxious tailings.

Details are very light, but Peloton claims they can make almost anything out of red mud. Iron, alumina, maybe even REE's, using their patented proprietary process. This is Magic Pudding talk.

Details can be seen in the pilot plant progress photos to date, showing solvent extraction is key to the viability of the process.

The thing is, about $120M per annum is spent on trying to recover red mud. Various people and venture capitalists have been trying all manner of processes and schemes to recover anything of value from red mud, or improve it into something useful in some way, or to reduce the toxicity and alkalinity of red mud to render it benign. To date, none have proved successful.

Here we mention that there's a lot of fun, low-strings-attached government grant funding available in the 'circular economy' that is being pushed to recover value from all manner of tailings. Free government money gets capitalists salivating harder than a dole bludger punching darts outside a TAB.

Scamdium (Sc)

I won't even go there, but scamdium is what scamdium does, and that is take some critical minerals project (a crappy Ni laterite, a REE project, red mud) and turn it into a massive notional money spinner.

In here we can lump indium, germanium and gallium. Generally a great indicator of Magic Pudding thinking, or in the very least, unrealised value-in-ground.

And, finally, lithium clays

Apparently 150ppm is now verging into "ore" territory according too certain people working on saline lakes in southern Africa.

Really? Can you really, truly, say this? Does anyone believe it?

And, inevitably, what else will you claim you can make when your payability is so...negligible? What other elements, like gallium, scamdium, rubidium.

Yes, rubidium resources are now a thing. Can't see where the market is, what Rb is worth, but don't let that stop anyone.

The Souffle

The problem with this sort of stuff, all these Magic Puddings, is economics. Remember the (alleged) laws of nature I mentioned at the start? A lot of these schemes are predicated upon contravention of these (alleged) laws of nature in order to work.

For example, the basic premise is that if you have a lot of an element or metal in a rock, it's valuable, and the missing ingredient is human ingenuity and frankly, alchemy, to extract it and generate strong economic returns. The thing that I have found is that it is not easy going from a simple idea to a high value product (in my case, HPA). The technical possibility may exist, but making it real takes longer and costs more than expected. C'est metallurgie, I suppose.

The next hurdle is that nothing is free. Notional value in a rock is just that. It costs energy and reagents to convert something from one chemical form into another; this all has cost. Understanding that cost early on is crucial. A lot of the examples mentioned herein are somewhere early along that journey of discovering the costs.

Thirdly, a lot of these schemes involve adding complexity to the proposed treatment schema. It's easy to put a new box on a Powerpoint slide pointing to a HPA or HPS or HPMSM co-product, but each chemical manipulation costs money and requires pipes, vats, pumps and filters. Or, in the case of the Peloton red mud scheme, a bunch of organic solvents and tailor-made ligands. This is all capital cost, technical complexity and risk.

Of course, all of this is to be studied and worked out. The further along the process towards a DFS a company is, the more these issues should have been resolved.

Scam or No Scam?

Circling back to the issue of whether or not any of this is a scam or just fallacious thinking, it is hard to decide. However, leaving it up to the individual investor to decide is perhaps a bit risky. Very, very few people are familiar enough with geology, or metallurgy, or chemistry, or all three to be a real 'triple threat' capable of sorting out wonky from shonky. This is where the regulators' role lies.

Nevertheless, a lot of these sorts of metallurgical investigations are at least uncannily parallel to scam formats that we should begin to query the motives of a company that announces a new project to convert some random rock into something spicy.

We must also realise that companies themselves could be victims of Magic Pudding scams perpetrated by people who are the metallurgical equivalent of lifestyle directors - consultancies who promise patented solutions to all your ills, who charge you for running your red mud through their black box, who extract fees and get jobs just fucking about and not dealing with the real issues, not honest enough to realise physics and (alleged) laws of nature are against the whole scheme. People who subsist on grant funding.

For example, we warn septuagenarian and octogenarian relatives to avoid falling for 'too good to be true' investment scams. Functionally, there is little difference between an oil arbitrage scam promising 15% p.a. returns risk free, from a scheme to convert 38% MgO serpentinite into electrolytic magnesium (hypothetically; don't try this at home). The returns look so appetising on paper that people may invest in these schemes due to FOMO.

Hydrometallurgical Results

We should, I believe, expect a little bit more rigour and disclosure around the metallurgy, especially from listed entities, for a start. Metallurgical disclosure under the JORC Code is underdone. Bre-X after all, was not a metallurgical scam or a metallurgical fallacy, but was salting core. The professional reporting schemes have focused in on chains of custody, assay rigor, ore body modelling risk. Asking whether investors (and companies) can be scammed by metallurgists and mad scientists isn't on the menu.

Critical minerals projects involve risky metallurgy. Rocks often contain low amounts of the target critical metal. Vanadium, 0.3% to 1%, it seems. Nickel sulphide 0.2%-0.44% it seems (uncomfortably close to olivine saturation I note). REE's in the 0.1-0.25% (including hard rock carbonatites nowadays).

Critical minerals project often also contain multiple potential commodities; vanadiferous titamomagnetite contains three metals in one mineral. REE's in carbonatites often associate with phosphorus minerals (Arafura at Nolans Bore and REE at Cummins Range), niobium (WA1), titanium (DRE, ILU, others), zirconium, hafnium. These are grab bags of value, and individually the deposits are risky, so the impulse is to de-risk by chasing multiple products, which may re-risk the whole mining concept into high cost, capitally intensive and complicated flow sheets.

Clearly there is a need to monitor the Magic Pudding thinkers and query the basic premise they espouse. Like ITM's contention a saleable kaolin product can be made after REE's are leached out. Or whether 10% HCl is economically viable to leach clays, for a start. It's a fair question. Maybe there's a fair answer.

Investors also need to appreciate the risks more. Investors liability to themselves for taking a risk on speccy stocks is however not infinite, and they should not be explicitly misled by claims.

Here, perhaps, the JORC code's focus on RPEEE (Reasonable Prospects) needs to be applied more vigorously than it occasionally is. For example, is 99.8% Al2O3 really high purity? No one aside from Surefire says so in anything I have read. That's smelter grade, and smelter grade goes for US$110-170/t depending. A bit of attention to these things could save a lot of conjecture, and focus the mind on getting to at least 3 nines before you talk about high purity.

Et tu Brutus!

Yes, well. Clearly if you play in mud you get muddy (get it? salt lake mud?).

My scheme was harebrained at the start: make LED's from salt lake mud.

But you know what, we did it.

One thing we did was, right or wrong, not pay a metallurgical consultancy to consult and do a literature study. It would have told us what we proposed was impossible, for a start. Importantly, owning the whole process myself, forced me to think a bit more carefully about what I was doing, how realistic my crazy scheme was, and search long and hard for solutions.

However, behind the scenes here is a bit of simplicity that stops this mud muddle being a Magic Pudding.

Firstly, the exploration was easy. I walked onto the lake, said "Yep, this is the shit" and pegged it.

Secondly, it's only about the alumina. You won't see any talk of REE's, lithum clays, blah blah. I know this will bite me in the bum someday, but I said it.

Finally, we persisted with it because we saw clear economic potential and researched that. There's ways to spend $25K on metallurgical modelling, and there's ways to spend $250K.

We're on the treadmill, doing all the hard yakka now the HPA concept was proved. Details, as always, proprietary.

Will we be successful?

That, as always, is the question.